Here’s the Real Story Behind the Bailout of Ireland

CNBC ^ | Nov. 22, 2010 | John Carney

[fightinJAG]

Why did Eurozone officials push so hard for a bailout of Ireland?

On the face of it, it was a very strange dynamic. Irish government officials had been insisting that they were well-funded through at least the first quarter of next year. Without any current need to roll debt, Ireland could afford to be indifferent as its spreads blew out. The yields on Irish debt may have blown out, but it wasn’t costing Ireland anything.

The pressure for a bailout of Ireland did not come from Ireland itself—it came from Eurozone officials. If anything, Irish Finance Minister Brian Lehnihan’s announcement over the weekend that Ireland would seek a bailout was a concession to its European Union friends.

So why would the Eurocrats demand a bailout of Ireland when Ireland insisted it didn't need one?

[fightinJAG]

more . . .

[snip]

Which means that this is not so much a bailout of Ireland—it’s a bailout of Ireland’s counterparties. That is to say, it’s a bit like Europe’s version of AIG: a backdoor bailout of invisible financial players who failed to manage their exposure to a shaky borrower.

This is going to become an explosive political issue in Ireland—one that may threaten the Irish government’s ability to keep the austerity promises it is likely to make in exchange for the bailout. After all, if the real purpose of the bailout is not so much to rescue Ireland but to rescue the Eurozone financial institutions holding Irish debt, there may be good reason for the Irish people to reject the terms.

[RC2]

Another example of central banking.

[ExSES]

This is but one of numerous stories which chronicle the manipulation of "Mere Sovereign States" for the "Good of the New World Order"!

Pay attention! Recall how the taxpayers (us) were forced to bail out the major banks in Europe due to the "Counter-Party" risks involved in the AIG "Bail-out"!

[ClearCase_guy]

It's all rotten. It's all a bunch of financial bigshots who got themselves into trouble and who consider themselves "too big to fail". Therefore, taxpayers in various countries are called upon to pony up billions of dollars so that the bigshots are not exposed as incompetent.

This sort of risk management teaches bigshots that there is no downside to risky behavior. Swing for the fences!! Go big or go home!! Someone will always be there to give you additional chances! You can't really lose!

Or can you?

[Gay State Conservative]

One of the topics of discussion regarding this bailout is the fact that Ireland has the lowest corporate taxes in the EU and the word is that EU hacks are insisting that Ireland raise these tax rates.I'll wager that that was part of the hacks’ motivation...they just won't tolerate low taxation.

[garjog]