“We all know they are going to be poor for a very long time…”

Without putting too much spin on it, here’s an interesting conversation on the FT site a few days ago when Lenihan (apologia in today’s FT) announced he was asking for money (to save what is left of the Irish banking system) from the Eurozone…  (and for good measure, and some scary numbers, just listen to Brian Lucey on Vincent Browne’s programme on Tuesday night for just how far Ireland has bent over to service bank debt)…

  • percy

    the panel appeared to agree that a default was a respectable option, due to the impossible levels of re-payment..
    the guy that said we ( ireland ) are playing chess one move at a time, and the rest are playing five moves ahead was excellent.
    The Gov’t are not telling the people the scale of the debt.

  • Davros

    Debt that can’t be paid won’t be paid. The bond market knows this. Until Ireland defaults it will pay sky high rates because everyone knows they will default. Once they default and renegotiate, the rates will fall because Ireland has paradoxically become less of a credit risk. Irish bonds will actually be relatively attractive given the low rates available on everything else. That said they have to push through with the nasty cuts as if they default but don’t reform no one will lend them anything. But yes, default is a certainty.

  • Alias

    I wish folks would grasp that the entity called an “Irish banking system” ceased to exist when we joined the eurosystem. Ireland doesn’t have a currency so it doesn’t even need a central bank – hence the central bank is now part of the ECB.

    Ireland doesn’t have a banking system. They are eurosystem banks. Any other eurosystem bank can provide the same service on the same terms as these eurosystem banks.

    The only factor that could loosely justify these eurosystem banks being referred to as ‘Irish’ is their shareholders or their primary market zone within the eurosystem.

    However, the shareholders all got burned so it wasn’t abou saving them, and other eurosystem banks can provide the same service so it isn’t about maintaining service levels either.

    It’s all about saving the eurosystem. However, when the eurosystem collapses, new banks can open in response to market demand for their services.