NEW YORK BOSTON |#Popular: Irish Celebrity Gossip Irish Pubs Irish Festivals Irish Roots Irish Entertainment Offbeat Irish

Home Page > Blogs > News blogs > Periscope > Fear and loathing of Germans, French in Ireland -- European bosses seen as bullies in financial mess

Periscope by Niall O'Dowd

Fear and loathing of Germans, French in Ireland -- European bosses seen as bullies in financial mess

Posted on Sunday, April 03, 2011 at 03:23 PM

Larger Text

E-mail

26 Comments

RSS

Archives

Dublin: Ireland is a country in the middle of a major stress test and heading for a possible breakdown.

The term stress test is used very widely here this week, because it refers to what the banks underwent as a result of their spending splurge in good times.

Bad loans cascaded from all quarters and the end result was a banking system that now has to start from scratch, essentially nationalized this week by the government.

The finance minister, Michael Noonan, described the days the bank went broke as the worst since the Irish civil war in 1921 and he is right.

The final number ends up at close to $100 billion that needs to be repaid by the banks after the previous government foolishly assumed all that banking debt on behalf of the Irish taxpayer.

What is beyond irritating however, are the actions of the big European countries that helped land Ireland in this mess.

The $100 billion that Ireland now must repay in order to get its banking system back was in large part loaned by European banks, especially in Germany and France.

Desperate to loan out cash and unable to do in their own countries, they lent billions at ridiculously cheap rates to Irish banks, around .15 per cent. The Irish banks then relent at 2 to 3 per cent to the big property developers.

All was going swimmingly until the housing bubble burst and the developers could now longer repay their loans.

The reasons the Germans, in particular, loaned billions to Ireland was because their own banking systems did not allow such reckless gambling on property as Ireland did.

Ireland became the dumping ground for easy cash, flim flam men and reckless bankers shoveling cash out the door to ludicrous development projects such as the ghost estates that now dot the Irish landscape.

Call the Irish stupid and they certainly were, but Germany, France and Britain to a lesser extent certainly helped feed the alcoholic much more drink with top up loans whenever the opportunity arose.

Now they Germans and French in particular have adopted a hectoring tone and told Ireland to behave and pay back all the bad loans.

All very well, but you are saddling a country with $100 million in debt which everyone knows it simply cannot repay.

The German and French who lent much of it to Irish banks will not hear of any alternative however, but to squeeze one of Europe’s smallest economies to the point where it squeals for mercy.

It s a little like when the bully has raided your piggy bank and taken everything but now insists on smashing it up as well.

The new government came in threatening to hold bondholders such as the German banks equally responsible for the mess.

This week they backed down in a hurry with the bondholders, those who gambled on the Irish property market, emerging untouched and the penniless Irish taxpayer left holding the bag.

There is justifiable anger here in Ireland over that and it appears that the Europeans have kept the hammer on Ireland in order to protect their own banks which hold many of the same dubious loans that Irish banks did before the crash.

If Ireland were too tell them to take a hike it is quite likely the whole European financial system would be dramatically under mined with bank forced to consider what loans are on their books.

The Germans and French would do well to pay close attention to Ireland’s needs at this point and stop their bullying tactics.

The Celtic Tiger may be gone, but it is cornered, not dead. A cornered tiger is a dangerous animal indeed.

E-mail

26 Comments

See all comments

sirpeter | Apr 14, 2011, 08:49 PM EDT

Don't worry about making mistakes..If your post sounds correct.Most have a fear to use Google to correct it,because it exposes their own made up crap.

Report abuse

sirpeter | Apr 14, 2011, 08:43 PM EDT

kinvara7..IC needs you badly so pour your wisdom upon us..It might smother some of the crap here.

Report abuse

sirpeter | Apr 13, 2011, 09:11 AM EDT

kinvara7..Good post..Reality with true fact's from what I can tell. I didn't know Irish companies employ around 82,000 people in the US. You only ever hear what Ireland gets from the EU. You never hear about what we actually give to the EU.

Report abuse

ancavker | Apr 11, 2011, 04:27 PM EDT

sirpeter: I am.

Report abuse

kinvara7 | Apr 11, 2011, 07:40 AM EDT

We have chosen the course we have - putting €70 Billion into the banks (which ammounts to about €15,500 for every man, woman and child) in order to ensure we still have a banking system to service our economy. Ireland had a €45 billion trade surplus last year, and it is expected to be around the same for 2011. There are only two countries in the EU that have a trade surplus with China: Germany and Ireland. We are the worlds largest net exporter of pharmaceutical products, and the second largest exporter of IT and Tech services after India. Ireland attracts many US companies, which employ roughly 100,000 people; this is well known, what is less well known is that Irish companies employ around 82,000 people in the US. There are many Irish co. that are world leaders. When you travel to the US you will have your eyes and fingerprints scanned by Immigration, and the tech they use comes from an Irish co. called Daon. The above are just examples to show that the economic advances that Ireland made in the last 20 years, are more than just bricks and mortar. At the end of the day it's just money, and we will get through this. I believe the British only repaid the money they borrowed from the US during WWII in 2006; of course the Americans gave them a better interest rate than the EU is giving Ireland (something that must change).

Report abuse

sirpeter | Apr 10, 2011, 04:02 PM EDT

ancavker..I think you are been a bit harsh there.When we stop fighting among ourselves. We are quite a force to be reckoned with. I wouldn't worry to much about the French and Germans. Are you Irish ancavker?

Report abuse

ancavker | Apr 06, 2011, 03:42 PM EDT

sir; No the Irish are only good fighting among themselves. And their other fine trait is begrudgery.

Report abuse

ancavker | Apr 06, 2011, 03:41 PM EDT

Hunts: How is rejoining the commonwealth going to help Ireland economically? It is just a social get together group, and has no power; it is simply a throw back to the empire days. This is the typical south of Ireland response now, and something the revisionists love to hear. Rejoin the commonwealth, Ireland never should have become independent. A sad commentary on Irish people. Once given the freedom and opportunity of independence, you wasted it.

Report abuse

huntsman | Apr 06, 2011, 01:51 PM EDT

The EU love in is over. It was always an elite activity. The ordinary people went along with it while the goods were on offer. There was no depth to it. Now the EU has turned nasty people want to have more freedom for the country. Ireland should rejoin the Commonwealth and also get closer to the USA. It is only Anglophobia which is stopping us rejoining a club which has our old traditional friends, Australia, Canada New Zealand.

Report abuse

EireinAmerica | Apr 06, 2011, 10:18 AM EDT

I am sick of all of you weak-willed, British loving, Seoinin bastards that have allowed the erosion of the Irish character. We are not all like that. Some of us are more like the fighting men from across the glen. Shame on the bastards (Brian Cowen) that sold Eire like a common whore!

Report abuse

sirpeter | Apr 05, 2011, 04:56 PM EDT

ancavker..No!! We won't come out fighting..I guess we are not "the fighting Irish" Any stereotypes about the Irish has never been right. Said that a good few times here too.

Report abuse

antoman | Apr 04, 2011, 04:50 PM EDT

@ancavker-Perhaps the perpetrators of the murder of the police officer in N.Ireland are seeking to tap into this silent simmering anger below the surface I mentioned?

Report abuse

antoman | Apr 04, 2011, 02:27 PM EDT

@ancavker-It was admittedly a jest but given the mood and hardship of the people in Ireland it may very well come to civil war.Just today on the news ESB Ireland announced it would be lowering the price of electricity in Ireland.Only those whose accounts are not in arrears will avail of the discount.This excludes the majority of its customers.Who by common sense should be the primary recipients of this discount.People here have had enough.Something has got to give.

Report abuse

ancavker | Apr 04, 2011, 01:47 PM EDT

sirpeter: The Irish are no tigers. They will sit back and take it. They will not be fighting any one.

Report abuse

ancavker | Apr 04, 2011, 01:46 PM EDT

antoman: Civil War??? Who would be the other side in this war?

Report abuse