It's its, of course. Sigh.

I'm thinking more of the bond fund managers (like pension funds, insurance, etc...) who are ultimately in control when it comes to rolling the short/medium term paper of said Irish institutions.

If paper matures within the guarantee (2 years, what a joke, like you could put heroin in your veins for 2 years straight and give up overnight ... the Irish gov't is in this forever), any cautious bond manager will get his principal back guaranteed, and not subscribe in the new bond offerings at any rate. Then he puts the money in bunds and gold.

This pretty much guarantees that the gov will have to pay for the shortfall at the roll, since bank assets will be unsellable non-performing mortgages. Taxpayers would be in it for exactly the amount they defaulted on wih the mortgages in the first place, that is an amount they can't repay even if the tax collector put a gun in their mouth. The only two ways the country can get through this is:

• with cross-border assistance (like, ceding control of all national banks to stronger foreign ones, but these are now in short supply, or even more innovative: direct relief from taxpayers in the rest of the EU),
  
• by printing money on its own (thus, outside the EMU)

Making grand statements of unlimited commitments when the market has proven in the mood to test all kinds of bluffs, including those of the US treasury, pretty much guarantees that Bad Things &tm; will happen (also shows the gov't is none too smart, but that shouldn't be a surprise: they're one of the many who let a toxic bubble grow in its backyard for short term political gains - all sides of the political spectrum, in all bubble countries, seemed pretty happy with the bubble actually)

Pierre