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by anonymousDan
4559 days ago
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Barroso is far from a neutral observer in all this. Personally I think it is extremely disengeneous of him to say Europe wasn't a problem for Ireland (and indeed there were major efforts to row back on the above comments subsequently). While there's no doubt lax regulation of the banking sector was the major cause of Ireland's problems initially, it is now widely accepted that the Irish Government was told in no uncertain terms by the ECB that it must bail out the banks on its own and that private bondholders were not to be touched, so as to prevent further contagion in the wider European banking sector. Thus an Icelandic style solution to Ireland's problems was ruled out, on pain of withdrawal of all short term funding. Whatever the effects of burning private bondholders for Ireland's future reputation in the markets, it would have been a much more just solution (as well as being popular politically in Ireland). To completely ignore the hit Ireland was forced to take is thus a bit rich IMHO. |
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It has received tens of billions in direct financial aid (and I don't mean the loans that were part of the current bailout). Its European neighbors have tolerated Irish tax policies that have put Ireland squarely at the center of the most fanciful tax evasion schemes used by both European and US corporations.
But it hasn't just been shell companies and tax evasion that has made Ireland rich. There's also genuine success that wouldn't have been possible if Ireland hadn't become a gateway into the EU for US corporations like Google.
So before choosing a path that was possible for tiny Iceland, Ireland did have to ask itself whether a move that could have destabilized the global financial system and threatened the existence of the EU was consistent with the solidarity it owes to those who have supported it in the past.
Ireland made the right choice at the time, but I also think that as things stabalize, it would be a good idea to renegotiate some of the bailout terms. After all, some of the foreign counter parties that were effectively bailed out by the Irish government benefitted greatly from the Irish housing boom while it lasted.