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Our banks were massively insolvent but because everyone in the elite "believed" the drop in the property market was a blip and thought there would be a "soft landing", they were able to claim they were merely illiquid, not insolvent.
The ECB provides up to 150 Billion (or thereabouts - what's a few Billion between friends) in "emergency" liquidity - allegedly secured on the Banks assets (you must be joking) in return for the Government committing to recapitalising the banks.
The Government cannot envisage a situation where the economy can continue to function without the banks functioning and paints a nightmare scenario of "the ATM's will stop working" to establish a TINA narrative.
The cost of recapitalising the banks goes up and up with each succeeding "stress test" as reality gradually intrudes and the ECB/IMF have to come in to "generously" bail out the Irish Government to bail out the Irish banks to bail out their German Bondholders - all at an exorbitant interest rate.
The Irish Government has little choice to accept the ECB generosity because the Global sovereign debt markets won't lend to the Irish Government any more - correctly judging that the cost of the Bank bail-out, plus the cost of a ballooning public sector deficit (largely caused by the collapse of the asset bubble caused by German banks excessive lending to Irish banks etc. ) is too much for the Irish economy to service.
Just to make sure TINA to the ECB "bail-out", Merkel and other EU heavies makes lots of comments about taxpayers not bailing out future bank losses which freaks out the markets during the IMF/ECB "bail-out" negotiations and makes it absolutely impossible for the Irish Government to borrow anywhere but from the ECB.
So, despite otherwise having been funded for most of this year, even the new Irish Government is well into the clutches of the ECB and makes only token changes to the ECB/IMF bailout deal on the grounds that:
Oh, and did I mention that not a single civil servant in the Irish Department of finance is an economist, and the only economist hired by the public service in recent years made his name slagging off Morgan Kelly?
For any Irish Government to have done otherwise, they would have needed an independent political vision and some serious economic expertise at their disposal, but we're all Europeans now and the markets and their ringmasters have to be obeyed.
Index of Frank's Diaries
largely caused by the collapse of the asset bubble caused by German banks excessive lending to Irish banks etc.
The German banks participated to the bubble but did not cause it - and the lack of intervention/policies by domestic authorities certainly did not help.
Sure, Germany is refusing to acknowledge their part in the crisis - but it does not mean that they were the only ones to blame.
no need to hypothesise criminality in order to explain what happened.
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