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Wednesday, November 17, 2010

Ireland's Last Stand

Despite the fact that Ireland is publicly making a spirited stand against having to go "cap in hand" to the EU for a bailout, the mechanisms are already being set in place to provide that bailout.

The European Union and International Monetary Fund will start auditing the accounts of Irish banks tomorrow. The purpose of this "assessment" is to determine whether Ireland is capable of handling the crisis itself, or whether it will be forced to accept a bailout.

It is reasonable to assume that the conclusion (ie Ireland is not capable of handling the crisis) has already been determined.

The UK, normally disdainful of the Euro, has also offered to help Ireland; as it is well aware that any blowback from Irish banks will hit British banks very hard indeed.

It seems that the matter is now, more or less, out of the hands of the Irish government and that the bailout (estimated by some at being around Euro 80BN) will be imposed upon it within a matter of days.

Were the Irish government to still to refuse to kowtow, then all the EU has to do is leak a damaging assessment of the Irish economy and push it over the edge.

That message will have been given loud and clear (behind the scenes) to the Irish government.

Next will come Portugal and Spain.

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