A perspective in NLR:
Ireland is heading towards a sovereign default, as independent analysts at home and abroad have already noted.The only way out of the current mess, for both the Irish and the European economies, is to impose a loss on the bondholders who engaged in speculative commercial activity yet expect unlimited compensation for their gambling losses from public funds. If the losses incurred by private banks were excluded from the national debt, Ireland would have a reasonable chance of stabilizing its finances over the next few years. Until this step is taken, the prospects of recovery are negligible. Had they been fortunate enough to possess a modicum of courage and insight, the current power-holders in Dublin would have beaten a path to Lisbon, Athens and Madrid, urging their fellow PIGS to form a bloc within the EU that could challenge the ruinous appeasement of bondholders. Instead, they have spent the last year assuring their citizens that ‘Ireland is not Greece’—until the point was reached when the Greek prime minister felt obliged to state that ‘Greece is not Ireland’. It is getting very late in the day for such alliances to be formed. But in their absence, the list of those hanging separately will surely extend far beyond the periphery of the Eurozone.