The Irish Government seeks to use a little reverse leverage on Frau Merkel and her Euro-Gaulieters;
“The Irish government has suddenly complicated the picture by requesting debt relief from as a reward for upholding the integrity of the EU financial system after the Lehman crisis, though there is no explicit linkage between the two issues. “We carried an undue burden for protecting the European banking system from contagion,” said finance minister Michael Noonan. “We are looking at ways to reduce the debt. We would like to see our European colleagues address this in a positive manner. Wherever there is a reckless borrower, there is also a reckless lender,” he said, alluding to German, French, British and Dutch banks. Mr Noonan hinted that Dublin is asking for some of interested relief on a €31bn EU promissory noted linked to the Anglo Irish fiasco, among other matters.”
You have to some sympathy with Noonan! Ireland allowed itself to take a bullet to postpone the “contagion” that rages through the Eurozone but expecting thanks for this is another matter.
Mr Noonan said the country will stay the course with unbending austerity, even though nominal gross national product (GNP) has already contracted by 22pc. Public wages have fallen 12pc on average under Ireland’s “internal devaluation” policy to regain competitiveness within EMU. There are likely to be further wage cuts in the December budget. “We have to face reality. There is no painless way, no soft option: we’re going to cut spending drastically, but with social cohesion. We don’t want the situation we see in Greece with people on streets and the foundations of state under threat. We’re not going that route.”
Not so sure that is the case – as Ireland imposes necessary austerity, as its property bubble collapses leaving half the country in negative equity, as unemployment sits dangerously high, and as a large immigrant community still remains within the small country, I wonder will the people take it all lying down? Maybe they will, but then again…