Wednesday, 8 December 2010
Michael Burke on the British economy may escape an Irish fate
Writing on the Guardian website, PE blogger Michael Burke points out that "British political leaders, like their co-thinkers in Dublin, have no explanation as to how cuts led to a wider deficit. Yet there is one important difference between the two economies that may yet shelter the British economy from an Irish fate, or at least the dominant section of it. The Irish bailout, like Greece before it, is a form of international loan-sharking, where Europe's banks demand repayment in full of existing debt by means of loading Irish taxpayers with ever-greater debts. These banks are headed by British ones, which hold £140bn in bonds issued by Irish borrowers, the biggest national exposure to Irish debt. Almost unremarked here, but not in Ireland, is that the interest rate on these new EU loans will be approximately 7%, compared with just 3% on IMF loans". You can read the rest of his article here.