Saturday, 13 November 2010
Irish bailout , why now?
Ireland does not need to access the markets for months, much of the economic news coming out of Ireland in recent months is quite positive; not great, but not too bad. There are serious underlying issues, that can't be avoided, a huge amount of criminality at AIB and the other banks, clearly going into the Irish Government, has caused their extreme situation (together, of course with membership of the totally unsuitable Euro).
So why now? There is market pressure to do something. As a private investor I am happy, other people, mainly European taxpayers are going to throw some money at the situation and that will help to stabilise jumpy markets. That is a terrible reason to open up the cheque book for 80 Billion Euros.
There must be something else driving this. Perhaps the European Central bankers have decided the back stop needs to be Ireland so that Spain, Portugal and Italy do not become bigger concerns; but this could and should have been addressed months ago.
The timing is odd here, it will be interesting to find out the truth one day.