noteconomist

Irish bailout to cost more than Greece

In International economics on November 23, 2010 at 12:21 pm

Drunken Irishmen can't get their financial house in order

And you thought the Euro was out of hot water back with the Greek bailout and promises from the PIIGS that austerity would be swift and effective? Turns out major investment banks are predicting the European Union and International Monetary Fund bailout package will eclipse the Greek bailout when measured as a percentage of GDP. From Bloomberg:

Ireland will seek emergency international aid totaling as much as 60 percent of the size of its economy, dwarfing the Greek bailout, to save its banks and bolster its finances.

Ireland will ask for about 95 billion euros ($130 billion) from the European Union and International Monetary Fund, Goldman Sachs Group Inc. estimates. UniCredit SA put the package at as much as 85 billion euros, while Deutsche Bank AG sees a 90 billion-euro plan. The 110 billion-euro aid for Greece in May was the equivalent of 47 percent of its gross domestic product.

So far we’ve seen some action in EURUSD, the past week the dollar has strengthened, even in the face of QE2, most likely as a response to the pending issues in Ireland. Notice that the bailout is sponsored by the European Union and the IMF, so those of us who aren’t in the EMU but are a member of the EU have to help foot the bill for this Eurozone issue. What’s the point of not being in the EMU when we still have to pay for their problems? Britons and Danes ought to be especially peeved at this.

NE

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