Ambrose Evans-Pritchard
Telegraph
Stripped to its essentials, the €85bn package imposed on Ireland by the Eurogroup and the European Central Bank is a bail-out for improvident British, German, Dutch, and Belgian bankers and creditors.
The Irish taxpayers carry the full burden, and deplete what remains of their reserve pension fund to cover a quarter of the cost.
This arrangement – I am not going to grace it with the term deal – was announced in Brussels before the elected Taoiseach of Ireland had been able to tell his own people what their fate would be.
The Taoiseach said afterwards that Brussels had squelched any idea of haircuts for senior bondholders: a lack of “political and institutional” support in his polite words: or “they hit the roof”, according to leaks.
One can see why the EU authorities reacted so vehemently. Such a move at this delicate juncture would have set off an even more dramatic chain reaction in the EMU debt markets than the one we are already seeing.
It is harder to justify why the Irish should pay the entire price for upholding the European banking system, and why they should accept ruinous terms.
I might add that if it is really true that a haircut on the senior debt of Anglo Irish, et al, would bring down the entire financial edifice of Europe, then how did any of these European banks pass their stress tests this summer, and how did the EU authorities ever let the matter reach this point? Brussels cannot have it both ways.
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