This bail-out blackmail must be stopped

Saturday, November 20, 2010
By Paul Martin

Taxpayers cannot be expected to pay for all the banks’ bad debts.

By Jeremy Warner
19 Nov 2010

In a slip of the tongue two years ago, Gordon Brown claimed to have “saved the world” by galvanising his fellow leaders into a collective bail-out of the banking system. As is now ever more apparent, all he did was administer a little bit of roadside pain relief. The underlying injuries still fester.

What’s happening in Ireland right now is not, at root, a sovereign debt crisis, but another banking crisis. The reason it has spilled over into a problem of national solvency is that it has overwhelmed the country’s capacity to afford further bail-outs.

By the same token, the reason European policymakers are trying to force a rescue package on a reluctant Brian Cowen, the Irish prime minister, is not because Ireland has run out of money: in fact, its debt is fully funded until the middle of next year. It is because they fear Ireland’s banking crisis will become their own, as bad loans to Irish banks trigger a wave of insolvencies across Europe.

The Rest…HERE

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