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The Taoiseach (Prime Minister) Brian Cowen, with the Minister for Finance Brian Lenihan photographed in January 2009

The Irish financial crisis of 2010 explained - SEE VIDEO

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The Taoiseach (Prime Minister) Brian Cowen, with the Minister for Finance Brian Lenihan photographed in January 2009

1. The main reason the crisis is important is that the future of the Euro currency may be at stake. Europe has already bailed out Greece. Ireland may be next and the real fear is that major countries like Spain and Italy could be next, Therefore  the European Union want to stop the rot now before the whole system falls apart.

2. Irish taxpayers have to find at least  $60 billion to pay off massive bank debts owed  that banks ran up, especially Anglo Irish Bank, in the property bubble  when they gave massive loans to developers, most of whom are now bankrupt..

3. The Irish government believes that by taxing deeply, service cutbacks and cutting the number of government workers they can become solvent again.

4. The  international money markets don’t seem to believe them and believe that Ireland’s debts may actually be far worse than the government is saying.

5.That is not entirely surprising as the government has continuously underestimated the cost of the bank bailouts and once said it was only about $5 billion.

6. Europe is getting increasingly worried about Ireland as the international markets clearly seem believe  the government cannot survive without a massive injection of cash. That is why the cost of borrowing money for Ireland reached a record high last week.

7. European leaders now appear to be pressing Ireland to take a major loan from them and the International Monetary Fund  but Ireland so far is resisting.

8. The Irish budget with savage cutbacks is due on December 7th. However, there is still a question whether it will be passed or not as the government is now extremely weak. If it fails to pass an election has to be called, further adding to the confusion.

9. The European Union financial leaders meet on Tuesday in Brussels and Ireland will be top of the list for discussion.

10. It appears that the odds are that Ireland will be forced to take the EU bailout even against their wishes.  That will likely lead to even more draconian measures and Ireland no longer being in charge of its own finances.

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