It’s the obvious question isn’t ? Here it is posed by Stephen Kinsella in The Irish Economy
Spain’s banks are getting a series of loans. Hooray. The rather vague Eurogroup statement on Spain is here. It’s being reported that Spain will require up to 100 billion euro for its banks, which will be added to its national debt. The money will come in tranches, first from the EFSF, and then later from the ESM. There aren’t specific austerity measures attached to this series of loans. People in Ireland are sure to lose their minds over the fact that there won’t be specific conditionality attached to these loans, and the IMF will be ‘observers’ rather than actually part of a Troika of funders. The talk generally is likely to be something like ‘why couldn’t we get such a deal’, and apparently Minister Noonan will be bringing this up with his colleagues at a later
And lo! The answer pops up on cue , from “Irish sources” quoted in Eurobusiness
Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return, European sources said on Saturday.
ADDS Sunday night from the BBC’s Robert Peston on the “Messy Spanish Rescue”
If Spain has succeeded, as it claims, in persuading Germany and the other eurozone governments to hand over the 100bn euros with no strings attached that relate to Spain’s spending and taxing – to its budget – then Ireland would have a powerful case for demanding a renegotiation of its bailout package.
Here is why: if it hadn’t been for the reckless lending by Ireland’s banks, Ireland would not need to have been rescued; in that sense, its plight is identical to Spain’s; yet the rescue it received undermined the budget-making autonomy, the fiscal sovereignty, of the Irish government, in the way that the Spanish rescue will not do.
But re-opening the Irish rescue package would be a hideous can of worms for eurozone members.