Irish Transport Minister Leo Varadkar said in an interview with The Sunday Times that Ireland will need another emergency loan from the European Union and IMF. Varadkar is absolutely right as Tom Molloy points out in The Irish Independent. The penal EU and IMF bailout to pay interest on private bank debt that the government assumed without asking the people or parliament is crushing the Irish economy as it crushed the Greek economy.
“Leaving politics aside, it is difficult to quibble with Varadkar’s analysis. It is almost impossible to imagine a situation where the National Treasury Management Agency could return to the markets next year to borrow money on our behalf. The problem is that we must either borrow money from the markets or from Europe because the present bailout fund will run out in 2013 at the latest and we still show no great appetite for changing our lifestyle to live within our means,” writes Molloy.
“Optimists inside government note that we may not need to return to the markets next year even if we are committed to doing so. They believe the banks won’t require all of the €35bn that has been set aside to bulletproof their balance sheets under the bailout deal. This could leave the Government with as much as €11bn to shell out on the day-to-day expenses linked with running the country. Even accepting that the nasty surprises from the banks are a thing of the past, such a scenario only brings us sometime into 2013 before the cash runs dry.
Running out of money in late 2013 will force us to borrow from Europe and the International Monetary Fund once again but under very different political and financial circumstances. French President Nicolas Sarkozy and German Chancellor Angela Merkel will probably both have been kicked out of office, victims of the general dissatisfaction with politicians throughout Europe and their own voters’ worries about the bailout of Greece, Portugal and ourselves. Anybody who believes their socialist successors will be any more flexible than Sarkozy or Merkel lives in cloud-cuckoo land. A far harsher tone, like the one coming from Finland these days, is much more probable.”