If Ireland defaulted on its debt, could it collapse the British, French & German financial systems?

[jimmymalone]

Ireland may not be able to afford to pump more money into the banks. The budget deficit widened to 11.7 percent of gross domestic product last year, almost four times the European Union limit, and the government spent the past year trying to convince investors the state is in control of its finances.

The premium investors charge to hold Irish 10-year debt over the German equivalent was at 139 basis points today compared with 284 basis points in March 2009, a 16-year high.

Ireland’s debt agency said it doesn’t envisage additional borrowing this year related to the bank recapitalization. It is sticking to its 2010 bond issuance forecast of about 20 billion euros, head of funding Oliver Whelan said in an interview.

“The bank losses, awful as they are, represent a one-off hit. It’s water under the bridge,” said Ciaran O’Hagan, a Paris-based fixed-income strategist at Societe Generale SA. [What is the logic behind this statement? Has the real estate market started increasing in value? Are the banks credits now increasing in quality? Will the stringent austerity plans of the government create an inflationary environment in lieu of a deflationary one for the bank's customer's assets???] “What’s of more concern for investors in government bonds is the budget deficit. Slashing the chronic overspending and raising taxation by the Irish state is vital.” [This is a circular argument. If the government raises taxes significantly in a weak economic environment, it will put pressure on the bank's lending consituents and the economy in general, presaging a possible furthering of bank losses

!]

This is an article from Boombustblog back in March 2010. It predicted the huge knock-on affects that the Irish banking crisis would have on the rest of Europe, particularly Eastern and Central Europe. If you have time it is an interesting article to read through. Some of the conclusions are quite shocking!! The Chinese, Iranians and the Russians would give their eye teeth to be in the position that Ireland is in today. I'm not sure what the Gov't are worrying about. This problem is not the problem of Ireland, it's the problem of Britain, France and Germany.



http://boombustblog.com/reggie-middl...ereign-europe/

[TotalMayhem]

it's the problem of Britain, France and Germany.

And that, my friend, is the reason for the upcoming 60-billion-loan, money to be fed back to their banks through 'our' banks and to be paid back with interest by US.

[janepaisley]

And that, my friend, is the reason for the upcoming 60-billion-loan, money to be fed back to their banks through 'our' banks and to be paid back with interest by US.

as far as i know britain is 4.8 TRILLION in debt http://www.telegraph.co.uk/finance/e...8trillion.html

i think mostly due to fighting in world wars and its top heavy public service

and now the carpets been pulled out from beneath ireland feet to put it in debt will it continues the downward spiral of its neighbour?

[jimmymalone]

And that, my friend, is the reason for the upcoming 60-billion-loan, money to be fed back to their banks through 'our' banks and to be paid back with interest by US.

Take a look at how much we owe British banks as a percentage of Irish GDP. No wonder David Cameron is so keen to lend us more money!! If Ireland defaults, Britain is doomed. It's us that has the nuclear button switch, not Cameron. It's just a pity we have a 'cowerd' as Taoiseach

[DCon]

We should give them our Ghost Estates instead of their cash

[TotalMayhem]

Take a look at how much we owe British banks as a percentage of Irish GDP. No wonder David Cameron is so keen to lend us more money!

The Icelanders deciding not to reimburse British and Dutch 'investors' only caused a a mild storm in a glass of water. Make no mistake, we will not be allowed to take similar actions.

[jimmymalone]

The Icelanders deciding not to reimburse British and Dutch 'investors' only caused a a mild storm in a glass of water. Make no mistake, we will not be allowed to take similar actions.

What could they do? Invade? That might affect the visit of QE2

[TotalMayhem]

What could they do? Invade?

The Royal Navy pulled some nasty stunts against Iceland over cod and mackerel, you'll never know what they're doing when they're facing the loss of billions of pounds.

[C. Flower]

What could they do? Invade? That might affect the visit of QE2

The British froze all Icelandic assets. They used anti-terror legislation and threw Iceland into a devastating crisis.

When Lenihan and Cowen made the Citi call, trying in their bizarre way to talk to bondholders about a possible haircut, one trader made a comment about the attitude varying depending on whether a state has a standing army.

[jimmymalone]

The British froze all Icelandic assets. They used anti-terror legislation and threw Iceland into a devastating crisis.

When Lenihan and Cowen made the Citi call, trying in their bizarre way to talk to bondholders about a possible haircut, one trader made a comment about the attitude varying depending on whether a state has a standing army.

If FF wanted to survive as a political party, I can't think of a better way they could go about it. What would they have to lose. It would be the 'Wag the Dog' scenario. It would completely distract everyone's attention from everything that has been going on these last few years. Ireland would probably become a pariah state, but FF would survive. I'm pretty sure they must be considering it.

[Sam Lord]

I once read a book by Thomas Cahill called How The Irish Saved Civilization: The Untold Story of Ireland's Heroic Role from the Fall of Rome to the Rise of Medieval Europe.

You may actually do it again ... by bringing down the whole capitalist system.

[Apjp]

Take a look at how much we owe British banks as a percentage of Irish GDP. No wonder David Cameron is so keen to lend us more money!! If Ireland defaults, Britain is doomed. It's us that has the nuclear button switch, not Cameron. It's just a pity we have a 'cowerd' as Taoiseach

Ireland is, by away and far, Britain's largest trader. However, France is our largest trader. Britain has a vested interest in us not collapsing, and Ireland needs to maintain high levels of trade with France. But I think first we will collapse, then Ireland and portugal will be thrown out of the euro, or a revolution will happen here. )) Britain will collapse, sterling will be back in 1992. France will not collapse, nor will germany. Germany will leave the euro, france will keep it. My own house of cards.

[Apjp]

The Icelanders deciding not to reimburse British and Dutch 'investors' only caused a a mild storm in a glass of water. Make no mistake, we will not be allowed to take similar actions.

revolution comes, and two, maybe three main parties out, different game.

[Apjp]

If FF wanted to survive as a political party, I can't think of a better way they could go about it. What would they have to lose. It would be the 'Wag the Dog' scenario. It would completely distract everyone's attention from everything that has been going on these last few years. Ireland would probably become a pariah state, but FF would survive. I'm pretty sure they must be considering it.

well every great british leader needs a war..and who knows what cameron is thinking..but I reckon civil war is a certainty if things keep on as they are.

JULIUS CAESAR; 'IT'S A FRIGHTFUL DREAM, LIFE ISN'T IT?' MAYBE WE SHOULD WAKE UP.

[Kid Ryder]

revolution comes, and two, maybe three main parties out, different game.

Different players and different stakes then Apjp; we'll be momentarily freer than we ever have been in our lifetimes, but with the massive drawback of having to face a uniformly-hostile 'international community' which thinks that we owe them the shop and the ground under our feet too to boot! And you can bet yo' ass it won't be the county sheriff they'll send round to seize the moveable assets. Still, that's no excuse to shrink from getting rid of the current system here - bring it on!

I do think it is increasingly clear that the old way of doing things in Ireland is very nearly finished. The new way's character will depend critically on how active and organised ordinary citizens are going to be in the coming few years. In spite of the gloomy prognostications of so many including myself, I am just a wee bit hopeful.