Quote of the Day…

Dan O’Brien in the Irish Times on the reality the Germans and French have been reluctant to accept:

….people in those countries whose banks lent to peripheral governments are going to pay one way or the other. Default would involve core countries having to recapitalise.

  • Alias

    The Dutch have sanely demanded collateral from Greece as a condition of providing new loans and have been predictably derided as ‘bad Europeans’ by the lunatics running the EU for putting the interests of their own taxpayers before the interests of Greeks. In contrast, the servile Irish government did not demand any collateral as a condition of the loans that it is party to as a shareholder in the ECB, and Irish taxpayers will now be stung by europhilia once again.

  • Drumlins Rock

    Will the UK demand collateral from Ireland for the debts they owe British banks, quite alot of NI rests in Irish government hands, two of our big 4 banks, the electric grid, the NAMA assets and other assets of Irish banks.

    Will Germany essentially own Greece after this all?

  • Mick Fealty

    If Greece slips the Euro leash Germany will likely have to cut its losses and work out what it did or didn’t do that led to the collapse of its largest export markets.

  • Alias

    “Will the UK demand collateral from Ireland for the debts they owe British banks…”

    You can demand it but you won’t get it since the ECB got in ahead of you. Unlike the ECB, the UK does not have executive control of the Irish Central Bank under the terms of any treaty.

    If your government deemed it wise to lend money to a bankrupt state sans collateral then that is a matter you will have to address to them. And given that deposits have fallen by 40% in Irish banks in the last 18 months, I’d say you had better hurry up and prepare your question.

    So why did the UK government foolishly lend billions to a bankrupt state? Well, that was to enable the state to hold the taxpayers liable for the reckless lending by UK banks to equally reckless Irish banks. UK banks fuelled the property bubble in Ireland to the tune of 120 billion, hoping to make huge profits out of it. As they lost their money, the quisling Irish state served the interests of the British state by retrospectively issuing a guarantee for all that money after the UK banks had lost it.

    If the UK government didn’t lend the money then those UK banks would have to accept their losses. In all probability, that would then be transferred to UK taxpayers as they are losses by UK banks. However, Irish taxpayers now shoulder those losses rather than British taxpayers, so that’s the advantage of a quisling Irish government to the UK.