Osborne's other key justification for the loan is that our economy is closely connected to that of Ireland so we can't let them go under. That assumes that this loan is really what they need. But economists from across the ideological spectrum have lashed out at the European plan for Ireland, of which this loan is a part, arguing it will do nothing more than delay a necessary reckoning with the eurozone's problems. The Irish are hardly welcoming the assistance with open arms. Here are just a few comments from leading economists:
"The Irish “rescue package” finalised over the weekend is a disaster. You can say one thing for the European Commission, the ECB, and the German government – they never miss an opportunity to make things worse.
It pains me to say this. I’m probably the most pro-euro economist on my side of the Atlantic.
[...]
The Irish “programme” solves exactly nothing – it simply kicks the can down the road."
"In the short term the EU will kick the can down the road via a temporary Irish bail-out, just as it did with Greece. It is likely to do the same with Portugal. But it has finally dawned on the EU that a rolling process that places private bank losses on to public balance sheets could leave its governments insolvent too."
"The eurozone cannot work with such disparate economies. Putting aside the current financial crisis, it is hard to see how Ireland, for example, can recover economically. As one of our major trading partners this is bad news for us. At some point, the EU will have to come to terms with the exit of some of their members – the sooner the better. Of course there are implications for the banks – but better to deal with their problems directly rather than struggle with propping up the unsustainable."
- Ruth Lea
It is understandable that Continental political elites are in denial. It is impossible to overstate how committed they are to the euro project. But we shouldn't be putting billions of pounds of British taxpayers' money at stake just so they can temporarily avoid confronting the fundamental problems of the eurozone. That isn't going to help Ireland and is a misuse of our money.
It is incredible how little scrutiny there has been of these plans. We need to tell politicians that we don't want to fund this bailout. Please sign the TPA petition.
Today the details have been announced of the British Government's loan to Ireland, the Press Association have reported them. It will be £3.25 billion over eight payments and used to shore up their banks and sovereign debt. The spin is that it isn't such a bad deal because they will repay the loan and interest at a rate of 5.9 per cent. It might work out that way, and to a certain extent it has on the banking bailout, but that isn't the point. Investing is about balancing risk and reward and if this was really such a good deal private investors would be lining up to lend the Irish Government money. They aren't because the risks are too high.Osborne's other key justification for the loan is that our economy is closely connected to that of Ireland so we can't let them go under. That assumes that this loan is really what they need. But economists from across the ideological spectrum have lashed out at the European plan for Ireland, of which this loan is a part, arguing it will do nothing more than delay a necessary reckoning with the eurozone's problems. The Irish are hardly welcoming the assistance with open arms. Here are just a few comments from leading economists:
"The Irish “rescue package” finalised over the weekend is a disaster. You can say one thing for the European Commission, the ECB, and the German government – they never miss an opportunity to make things worse.
It pains me to say this. I’m probably the most pro-euro economist on my side of the Atlantic.
[...]
The Irish “programme” solves exactly nothing – it simply kicks the can down the road."
"In the short term the EU will kick the can down the road via a temporary Irish bail-out, just as it did with Greece. It is likely to do the same with Portugal. But it has finally dawned on the EU that a rolling process that places private bank losses on to public balance sheets could leave its governments insolvent too."
- Ruth Lea
It is understandable that Continental political elites are in denial. It is impossible to overstate how committed they are to the euro project. But we shouldn't be putting billions of pounds of British taxpayers' money at stake just so they can temporarily avoid confronting the fundamental problems of the eurozone. That isn't going to help Ireland and is a misuse of our money.
It is incredible how little scrutiny there has been of these plans. We need to tell politicians that we don't want to fund this bailout. Please sign the TPA petition.