Irish Ask How Much Is Too Much as Bank Rescue Trumps Austerity
Bloomberg … Joe Brennan and Dara Doyle - Sep 2, 2010
It may just be a few billion euros too far for Ireland’s beleaguered taxpayers.
Anglo Irish Bank Corp. said Aug. 31 it needs about 25 billion euros ($32.1 billion) in state funding, equivalent to about two-thirds of this year’s tax revenue. Standard & Poor’s, which last week cut the country’s credit rating to AA-, said the state may have to inject as much as 35 billion euros.
“It’s like a bad dream where you’re chasing something you can’t catch up with,” said Micheal O’Cearbhail, a retired television producer shopping in O’Connell Street, Dublin’s main thoroughfare. “Eventually they’ll have to close it down.” …
Few places in the world encapsulate the global financial crisis more than Ireland as the country’s decade-long economic boom came to a halt with the collapse of the property market.
While Ireland provided the model for euro partners Spain and Greece in implementing tax increases and spending cuts, the bill for bailing out its banks is mounting. That’s left taxpayers, some enduring pay cuts of 13 percent, questioning the wisdom of the government and Dublin-based Anglo Irish’s management in keeping the lender alive.
“Ireland had been seen as leading the way for the rest of Europe in terms of austerity measures, but now the market isn’t too keen on this black box that’s been opened up by the banks,” said David Schnautz, a fixed-income strategist at Commerzbank AG in London. “Investors don’t doubt the willingness of the Irish to accept the pain, but they are beginning to ask if the scale of the banking problem is just too big to handle.” … More bloomberg.com/news/2010-09-01/ir … erity.html
