IHT: Ireland 'blank check' to banks raises questions (October 1, 2008)
That Irish blank check amounts, in a doomsday scenario, to a maximum estimated liability of €400 billion (US$560 billion) -- just to repay the debts and deposits of six banks. That's double the country's annual gross domestic product, nine time the national debt and €95,000 ($135,000) per citizen. But Ireland's government leaders themselves have stressed that they made the unprecedented promise only because they calculated, by doing it, shares would rebound, foreign capital would flow in, and they would never have to spend a cent of taxpayer's money bailing out a bank. Prime Minister Brian Cowen said he had "not handed over any money to any bank. I have provided the reputation of this state to the banks."
But Ireland's government leaders themselves have stressed that they made the unprecedented promise only because they calculated, by doing it, shares would rebound, foreign capital would flow in, and they would never have to spend a cent of taxpayer's money bailing out a bank.
Prime Minister Brian Cowen said he had "not handed over any money to any bank. I have provided the reputation of this state to the banks."
I think that Globalization just ended. And unless the ECB steps in to clean up the mess, I think that the single market just got torn into several dozen pieces. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
European officials squabbled over how to respond to the global credit crunch, with Germany opposing a coordinated approach and the Netherlands calling on states to set aside funds to help troubled banks. French President Nicolas Sarkozy distanced himself from comments by his finance minister Christine Lagarde over the need to set up a ``rescue fund.'' Luxembourg Prime Minister Jean- Claude Juncker told DeutschlandRadio today he didn't ``see the need'' for an effort to emulate the $700 billion rescue package that U.S. senators passed yesterday. ... Lagarde told the German newspaper Handelsblatt in an interview today that a ``rescue package'' was needed to help ``smaller'' European states ``threatened with a banking failure.'' Germany opposes the proposal ``based on its current assessment of risk,'' said Finance Ministry spokesman Stefan Olbermann.
French President Nicolas Sarkozy distanced himself from comments by his finance minister Christine Lagarde over the need to set up a ``rescue fund.'' Luxembourg Prime Minister Jean- Claude Juncker told DeutschlandRadio today he didn't ``see the need'' for an effort to emulate the $700 billion rescue package that U.S. senators passed yesterday.
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Lagarde told the German newspaper Handelsblatt in an interview today that a ``rescue package'' was needed to help ``smaller'' European states ``threatened with a banking failure.'' Germany opposes the proposal ``based on its current assessment of risk,'' said Finance Ministry spokesman Stefan Olbermann.
In addition, central bank intervention of a failing retail bank can be swift. They just didn't have stomach to do their job. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Zaptero has got into the act, and Santander looks to be playing a major role in pressuring Brown into doing the right thing.
That and the possibility that the City of London may re locate to Dublin if he doesn't act. Wouldn't that be ironic given the talk about keeping the City happy? And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
