The Other McCain

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Irish Debt Woes

Posted on | July 19, 2010 | 4 Comments

Not a Greece-style crisis, but not good news, either:

Ireland’s efforts to pull out of a deep economic slump suffered a setback Monday when a major credit agency downgraded the country’s bond rating, citing a weak banking system and rising debt.
Moody’s Investors Service downgraded Ireland one notch, to Aa2 from Aa1, although it remains comfortably above junk level. Moody’s also changed the outlook on the ratings to stable from negative.

More at the Guardian.

Category: Economics

Comments

4 Responses to “Irish Debt Woes”

  1. Estragon
    July 19th, 2010 @ 7:25 pm

    Ireland was in fact the only one of the “PIIGS” countries to have taken any really significant steps towards repairing itself. Portugal, Spain, Italy, and Greece remain difficult problems and so far have offered or adopted only stop-gap measures which put off the day of reckoning. Greece does not appear able to make even the minor corrections in its broken system to qualify for all the EU/IMF billions available to it.

    The real problem is that the debt of these nations has become more and more concentrated in the core banks of Germany and France over the last several years. The dilemma for the governments of those big economies is: shall we bail out the party-hardy countries with our own taxpayers’ money, or do we let them fail and then bail out all the banks which collapse as a result?

    Even the French won’t take this lying down. And the Germans . . . Europe better be darned glad they are substantially demilitarized, else they might seek their usual solution.

    This situation almost guarantees the EU cannot survive in anything close to its present state, and also ensures the second “dip” of recession cannot be avoided now.

  2. Estragon
    July 19th, 2010 @ 3:25 pm

    Ireland was in fact the only one of the “PIIGS” countries to have taken any really significant steps towards repairing itself. Portugal, Spain, Italy, and Greece remain difficult problems and so far have offered or adopted only stop-gap measures which put off the day of reckoning. Greece does not appear able to make even the minor corrections in its broken system to qualify for all the EU/IMF billions available to it.

    The real problem is that the debt of these nations has become more and more concentrated in the core banks of Germany and France over the last several years. The dilemma for the governments of those big economies is: shall we bail out the party-hardy countries with our own taxpayers’ money, or do we let them fail and then bail out all the banks which collapse as a result?

    Even the French won’t take this lying down. And the Germans . . . Europe better be darned glad they are substantially demilitarized, else they might seek their usual solution.

    This situation almost guarantees the EU cannot survive in anything close to its present state, and also ensures the second “dip” of recession cannot be avoided now.

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    July 20th, 2010 @ 8:59 am

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