Ireland swallows bitter pill, asks EU for loan

Stupidity and corruption on an unbelievable scale, and it won't stop with Ireland either.

You can say this over and over but it never sinks in. The repayment of a loan is a private contractual matter between lender and borrower. If the amount of the loan exceeds the underlying collateral, well that is bad banking and either the borrower or lender must take or share the loss. It makes no difference to anybody else.

If a country says "oh we must cover the losses and protect our banks" then that country has just chosen its own economic collapse. The system can not work in in that situation. And if a country allows the banks to gain so much power and to make themselves so complex that the banks know in advance that the country must make that choice, they are toast.

Like I said, Ireland is just the latest, there are many more dominos to fall.

Milton Freidman basically predicted all of this, how the idea of a single currency for the EU would prove to be a financial disaster. Pity the Irish, screwed again.

You've all heard of the countries known as BRIC Brazil Russia India China now how about Those countries known as PIGS = Portugal Ireland Greece Spain.

the irish? asking to borrow money? never...

Social cohesion in Europe is soon going to be tested. Ain't gonna be pretty.

Good. Hopefully this loan will do the trick.

This is ridiculous, and the politicians deserve to be sacked. They've been promising ever since they bailed out the banks that it wouldn't come to this, but here we are.

Honestly they should have just sliced up the banks and sold them (and their debts), it would have worked and the banks would have got the message, "mess around and we'll cut you to ribbons". Instead the message is, "Business as usual, no matter what you do we'll save your neck."

Get rid of the Euro

Pity the Irish, screwed again

Sorry, but the Irish people & government were more than happy to accept the billions of Euro that came their way from the shared subsidy pots. Ireland garnered huge sums from the Common Agricultural Policy (CAP) & the European Development Fund (EDF) to name but two.

The problem is, is that that they haven't used that money wisely at all, speculated in the grandest way possible, and the Government, voted in by the Irish citizens, decided to guarantee the two main banks' debt, instead of doing what Frungy said in a previous post. That guarantee is set to cost around 35m Euros, just for one bank - Anglo Irish. Now they have to go cap in hand to the countries that gave them this money in the first place and say "Oh, yeah, we didn't actually invest money wisely or look after it properly and now we need some more of your money to cover the shortfall."

Whichever way you look at it, Irish people are going to be facing huge cuts in order to refinance their debt. It isn't going to be a particularly pleasant time there in the forseeable future.

But, nah. No feeling sorry for the Irish on this particular matter

Ireland is not being bailed out here, all they have done is exchange one lender for another. A bailout of Ireland would have been a write-down of debts. This is a bailout of the European banks who poured money into the country to get in on a speculative boom.

That doesn't mean the borrowers are blameless, but it also doesn't mean they aren't being screwed. Tim and rockbuster are both right. There is a right way to deal with bank failures and a wrong way. Ireland chose the wrong way.

A simple rule to remember is that money that can't be paid back won't be paid back. All they have done is kick the can down the road, and that is going to end up costing even more.

It is the inevitable outcome of the Euro scheme. Many respected economists predicted this, but the Eurocrat politicians did not want to listen.

Coming from Ireland myself,its heartbreaking to see what has happened to the entire country over the past few years culminating in this embarrassing loaning of money to get us by.The money will undoubtedly go to prop up the banks who are haemorrhaging cash as bad debts mount and depositors move their money elsewhere.The phrase "privatisation of profits and socialization of losses" sums up the situation at present as the ordinary person gets hits hardest in draconian budgets aimed at saving money to keep irish banks just about afloat.

@rockbuster no-one in their right mind would touch an irish bank with their debts.the irish government could not afford to let them go to the wall either as defaulting would result in evn worse situations in terms of future lending.Other major European banks are exposed for huge amounts in Ireland,especially british banks like RBS which owns Ulster Bank and Danske Bank which owns National Irish.

If my Irish amigos have to swallow this bitter pill I also hope the have plenty of nice Irish beer to help it go down smoothly. 3 Cheers for our Irish men and woman who really know how to make good beer and nice fancy foot work in their dancing too.

When is the U.S. going to swallow the bitter pill and sk the EU for a handout? Heck, the U.S. is WAY more debt-crippled than Ireland...

asahi man:

The US are in a better position than Euro countries, because at least they control their own money.

All that happens when they continue with "monetizing" like there is no tomorrow is that the Dollar will lose ever more value. That is a relatively healthy situation. The Euro situation is infinitely more messed up.

I feel sorry for the Irish. But I think this could be bad karma coming home to roost for making peace with the British and giving the world River Dancing.