Garrett is missing a major factor - the bank guarantee in september 2008. Alot of the commentary is stating that Ireland needs a bail out because of the banks financial situation not the sovereign crisis. The mistake was the blanket guarantee. Also the problem was too much public spending but where it was spent. It would have been better to put it into sustainable social and economic infrastructure such as schools, hospitals, education, training, public transport etc.
Thou shall not touch the senior bondholders lest they flee Thou shall not touch corporate tax rates lest the MNCs flee Thou shall not touch salaries of senior public officials lest they, well, grumble and flee (o happy days) Thou shall not raise tax revenues to EU average norms lest we become more normal Europeans Thou shall not tax property and wealth to any significant extent lest the 'wealth creators' (sic) flee Thou shall not invest the National pension reserve fund in jobs for our young people so that we can all pay for an ageing society later onBut Thou shall lower the minimum wage so that people have more incentive to work Thou shall lower the dole so that the unemployed find jobs that are there to be found Thou shall reduce public services because we can no longer afford them Thou shall lumber the next generation because we are where we are and there is no going forward Thou shall invest our cash in L'Oréal and Budweiser In the meantime, the crisis broadens across the globe showing the truly international nature of the crisis, the power of international capital, the weakness of international labour and the lack of policy coherence and joined-up thinking at inter-governmental level.
The Irish economic consensus, stretching all the way from Thatcherite to Reganite.Over at irisheconomy.ie I think that even the "realists" have begun to suspect that suffering on the cross of International Finance so that bond holders might be relieved from their sins may not be the wisest course of action, though they have taken their time in catching up with the left wing firebrands at the FT and Bloomberg.Still, lets hope that Brian can get through the budget so that he can save Europe from us.-- Shay Begorrah
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