The PIIGS of Europe( part II) - The Downfall of Big Brother

by Esme Ellis

The Irish conceded on Sunday and reached out for a bailout for debt that signaled the end of resistance on the part of Northern Ireland. Due to a failure of Irish banks rather than state saving programs, the Irish have had to resort to bailout. 85 billion euros have been thrown at the Irish coffers from four different directions: 22.5 Bil euros from the European Financial Stability Fund, 22.5 from the UK, Sweden, and Denmark, another 22.5 from the International Monetary Fund and the last 22.5 billion euro was siphoned from the National Pension Reserve Fund and other programmes. There is a proposed 5.8% interest rate, a great deal larger than the Greek interest rate, despite the 30 billion dollar decrease that the Irish relief package represents to the Greek one.

The Europeans are looking around nervously at weak nations with impending debt crises, particularly the PIIGS, (Portugal,Italy, Ireland, Greece and Spain). With two of the five knocked out of the running, Europeans are bracing themselves for a hit from either Spain or Portugal.
There's dialogue about the precarious position of the Euro in state relations, and all eyes have turned to France and Germany for a response. Any sign of significant doubt or unwillingness to continue on the current currency from either could spell the end of the European conglomerate.

French foreign minister Christine Lagarde assured yesterday on French radio station RTL that a comparison between French debt and Irish debt "was not economically a suitable comparison", and that France was in no danger of defaulting itself." We are the best of those at risk in Europe,". Yes Lagarde, very comforting indeed-if you're going to be in trouble, you might as well be standing on the heads of those who are sinking below you.

"We'll save the Euro," pledged French budget minister Francois Baroin also on Monday.
He went even father in his proclamations than Laguarde. " This moment records the absolute determination of Europe- of France and Germany- to save the Eurozone," he said. It was a reassuring gesture- over reaching perhaps, and slightly over assuming, but for the most part, true.

The Germans, for their part, are broadcasting warnings on the likelihood of Portuguese defaults , and are, as usual, prescribing remedies mostly along the lines of creating banks that take responsibility for their own losses, and work, through careful planning and perhaps clairvoyance, to avoid defaults. There's an exasperation in the German state for the large role European taxpayers have played in the bailouts- but should we remind them that is was Merkel herself who made the decision in round one of " The Euro Goes Bust" to use tax payer money for the Greek bailout?

France and Germany are pillars of the Eurozone, and they, along with the UK, will shoulder many of the financial costs of being so closely dependent on negligent neighbors, as one so often is in the Eurozone. The long term concern is that these two states will tire of their role as economic crutch in the larger European Community, and that they will start to weigh the benefits of community against the benefits of insolvency, which are, it must be admitted, rather few.