Ireland is on the brink. While many of us associate the world financial crisis strictly with the United States, the dubious workings of many of the world’s banks have come to show that the reckless practices of Wall Street have been copied elsewhere with dire results. Dublin has had to take over some of its financial institutions and had to prop up others. Much of what has come to light follows the same shady practices of cooking the books to misreport income and falsely paint a rosy picture.
Like the United States, Ireland had a property bubble which started to end in 2007. Irish banks were over-exposed on the Irish property market and could not weather the storm of the global financial crisis. Trouble began in mid-2008 as government deficits increased, many businesses closed and unemployment rose. The country has officially been in and out of recession in the past few years however recovery does not seem to in the forecast for the people. Emigration has gone up in 2009 and 2010 which is reflected in fewer people signing up for unemployment benefits.
The EU and the IMF are discussing an agreement on a bailout package for Ireland which would total 85 billion euros over the next three years to fund the government deficit and recapitalize banks. Dublin is now poised to take over the Bank of Ireland, the last large Irish lender outside of government control as part of a larger plan.
In return for the bailout, Dublin will more than likely have to agree to terms and conditions it has long considered unpalatable. There will be tax increases; there will be spending cuts. Agreements with unions thought of as being untouchable will have to come back onto the table.
This acronym has been used for years by various people when referring to the economies of Portugal, Italy, Greece and Spain. Variations include PIIGS where the second I refers to Ireland and PIIGGS where the second G refers to Great Britain. Obviously others have know for a long time that sooner or later the piper would be coming calling and the headlines referring to Greece earlier this year and now Ireland seem to be bringing to our attention what others in economic circles have known for a long time.
There’s an old saying: pigs get fat; hogs get slaughtered. The global financial crisis has been a lesson for everyone up and down the economic ladder that the way business has been conducted during the last decade is not just flawed; it is criminal.
Everyone should see the documentary film Inside Job. Your blood will boil when you see the cavalier attitude of what turn out to be basically crooks in suits greedily fooling around with our money in the unquenchable thirst for higher profits even in the face of outright foolishness.
The conservative movement in the United States, the Teabaggers are pushing for less government, more free market. How quickly we forget. It is precisely this attitude, this relaxed governance, no regulations model which got us into this mess in the first place. People are naturally greedy and that greed while motivating, needs to be held in check or those same people will be tempted to take far greater risks than what is conceivably warranted by any circumstances. After all, you wouldn’t take your pension and bet it at the roulette wheel in Las Vegas.
Tensions in Europe Mount
The debt crisis started with Portugal, Greece and now Ireland. However, there are growing concerns that Spain represents a far bigger economy and a much bigger problem. The GDP of Ireland is $223 billion; Portugal is $234 billion and Greece is $331 billion while Spain just by itself is $1.5 trillion, twice the size of the other three countries put together. There may not be enough money in the pot to rescue Spain.
Click HERE to read more from William Belle
Wikipedia: PIGS (economics)
PIGS is a grouping acronym used by international bond analysts, academics, and by the international economic press that refer to the faltering economies of Portugal, Italy, Greece, and Spain, often in regards to matters relating to sovereign debt markets. Some news and economic organisations, like the BBC, have either limited or banned their use due to criticism regarding perceived offensive connotations.
Wikipedia: 2008–2010 Irish financial crisis