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This dysfunctionality was exacerbated by the fact that banks, as surpluses recyclers, were predisposed to "safe" financialisation or property investments rather than "risky" productive investments, or long term infrastructural investments which might have rendered the irish economy more competitive.

Bingo!

This is why relying on "the market" to determine the direction of investment is wrongheaded. Which means that the EU rule that the public sector must fund itself in the money markets is barking mad. But it's written into the EU treaties (the infamous article 123).

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Tue May 31st, 2011 at 01:34:20 AM EST
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