Ireland rescue mission: betting on the ded horse

I got out from the Dublin Airport. Next is a half of rain drops and fine like powder. After, there is the bus, just in time to take me to Limerick. The distance, 206 km, is traveled with the bus in 4 hours. Dublin it’s the capital of Ireland. It’s very trepidating, especialy when the winter sale season is starting. The supermarkets and the malls are stormed by the desperate customers to get their hands on anything that says Reductions. It’s a mix between irish, polish, asians with photo cameras and romanians.
The New Year’s Eve is closing, so, the city is very crowdie. Everybody is getting ready for 2011, to party and celebrate the ending of 2010, a restless year, especialy it’s second part. In Ireland, 2011 is the general election year. The current Gonverment signed a deal with the IMF for a rescue plan, a bailout to save the banks. The next Gonverment will have to deal with that.

In just two years, this Gonverment shifted with 180 degrees. Until December, it was widley belived that the banks are fully solvent and in the eventuality of a bailout, it suposed to be the cheapest one. The situation tooked a strange turnover in September.

What happened…

  • the original Irish-liability guarantee matured at the end of September
  • at the end of the guarantee, many corporate deposits with set were suposed to run up
  • the banks failed to obtain new bond markets, so they turned to the ECB and to the Irish Central Bank for emergency liquidity loans
  • but the loans grown to an unsustainable level, so the ECB ordered to the Gonverment to make a deal with the IMF for a bailout
  • the amount of loan rised at 90 billion euros to the domestic banking group and 30 billion euros in emergency liquidity loans from the Irish Central Bank

The only way for Ireland to get rid of this burden is to sell its banks to potent investors and the state to guarantee it’s loans from the banks.

Until Limerick are just 2 hours. It’s the irish classic view: farms, green grass, small houses but very clean, with yards separated by very discrete fences. The motorway isn’t busy, but the bus driver has his own agenda and he must stick to the plan: four hours until Limerick. Billions of dolars and euros were invested in Ireland’s infrastructure after 1990, yet it’s economy significantly has grown between 2000 – 2008, the means of transportation between the big cities are rather dissappointing. Short distances are covered in too long. So, Monday I will be at the Cliffs of Moher.


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