Business writers are already pouring cold water on Europe's $100-billion-plus bailout of Ireland. On Sunday, the European Union and the International Monetary Fund agreed to inject funds into the island nation to stabilize its economy and prop up its banks. The EU hopes to prevent a repeat of Greek's debt crisis, which weakened the euro. Will the bailout work? Here's what skeptics are saying:
- The Austerity Plan Is Terrible, writes Joe Weisenthal at Business Insider:
Austerity is a lousy way to get to deficit reductions. Remember, austerity is what Ireland has been trying for years. Suddenly it will work now, and get the deficit to 3% of GDP? Please. [Also] it's still fundamentally based on this idea of preventing panic by promising support as necessary. And yet already Portuguese CDS are wider. This idea gets nobody excited.
- The European Central Bank and the IMF Are Inept, writes Dean Baker at The Guardian:
When a firefighter or medical team make a rescue, the person is usually better-off as a result. This is less clear when the rescuer is the European Central Bank (ECB) or the IMF...
The failure of the ECB or IMF to take steps to rein in the bubble before the crisis has not made these international financial institutions shy about using a heavy hand in imposing conditions now. The plan is to impose stiff austerity, requiring much of Ireland's workforce to suffer unemployment for years to come as a result of the failure of their bankers and the ECB.
While it is often claimed that these institutions are not political, only the braindead could still believe this. The decision to make Ireland's workers, along with workers in Spain, Portugal, Latvia and elsewhere, pay for the recklessness of their country's bankers is entirely a political one. There is no economic imperative that says that workers must pay; this is a political decision being imposed by the ECB and IMF.
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