Irish government pushed into a corner over deposit guarantees
While just yesterday the headlines were suggesting that the Irish government had been one of the bravest in Europe with a massive rescue package which saw all deposits in Irish banks guaranteed by the authorities, a different story is being told today. Was it more a case of being pushed than jumping?
News is emerging that the Irish government were concerned that as late as the weekend, the Irish financial community was on the verge of collapse. This is Ireland, one of the bright spots of Europe, the country which is attracting a number of UK companies for its tax regime, suffering from a potential breakdown of the banking community.
The difference between the UK and Irish authorities is fairly marked, whatever the real reason for yesterdays move, with the Irish government taking action rather than talking about it for days and weeks. The move could actually turn out to be the turning point in the European markets with many other governments now ready to follow suit.
While one swallow does not make a summer it will be the gradual hardening of confidence which will bring us all out of this mess. It won't happen overnight, and needs the help of the US, but over time the situation can be turned around.
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