that'll do pig
International Monetary Fund Deputy Director Ajai Chopra said Ireland has a good chance of returning to markets if European leaders are able to stem contagion from the region’s debt crisis.
We were Baaa3 and now are Ba1. That is the school like system that rates Ireland’s perceived ability to pay back what it owes. Thankfully this little piggy can go to the market.
A debate on independent.co.uk:
Sean O’Grady: Best way out is for the eurozone nations to pay up
It was Sir Mervyn King, Governor of the Bank of England, who put it best. The sovereign debt crises affecting so many of the eurozone nations are not of liquidity but of solvency.
Think of a billionaire who happens to forget his wallet down the pub, cannot pay for his round and has to borrow £20 from a friend. He is solvent – he has plenty of money in the bank to pay his bills – but has a temporary liquidity crisis. Contrast that with the flash guy in the wine bar, buying everyone a pint but who goes home to stacks of unpayable bills. He is liquid, for now, but insolvent.
The Greeks, Irish, Portuguese and maybe the Italians and Spanish are like our flash friend. Their debts are unsustainable. The least bad way out of this is not for their mates in the eurozone to lend them more cash, but to honour their debts. A whip round, in other words. Taken as a whole the debts and deficits of the eurozone are not that bad, and compare relatively well with the US and Japan, for example. It would mean that the Germans, Austrians, Finns and Dutch – the boozers who always stand their rounds – would pay for someone else’s party.
It is unfair. It is a true test of European friendship. It should end like a good night out. Then again, it might just start a bar-room brawl…
Ed who sent this to me noted the comment:
Sean, I assume (correct me if I am wrong) that you are an Irishman? Funny that as your country will be a recipient of the Germans (and Dutch, Finnish, etc) largesse. I bet if the boot was on the other foot you would not be so happy and btw doesn’t your public sector have one of the highest pay rates in the world. I suggest you get your own house in order before you get the begging bowl out to the Germans.
As I have said to my colleagues before if you want to live like the Germans, then you need to work (and pay taxes including Corporation Tax) like them, no such thing as a free lunch
I like the whole boozing analogy. Irish people on holidays think everyone loves them but who really likes the Ole-Ole brigade on the balcony at 5am? I blame european banks who didnt understand us in the same way as I blame all night nite-clubs in spain who continue to serve Irish people who cannot control themselves and are attempting to overdose as a way to have a good time. As a friend of mine says “its all good acting the pig until the butcher comes”.
Speaking of pigs, Italy are next in line to shock the Euro. It should be no surprise, maybe only that they are on the chopping board before Spain. Italy are after all one of the PIIGS and without them it the acronym would be so much worse.