What Fine Gael’s Win Means for the Irish Banks and the IMF Bailout

“…the interest on our debt could reach €12bn [$16.6 billion US] by the end of next year. This would eat up roughly 85pc of income tax revenue. That is an impossible burden and clearly unsustainable. That is just a beginning.

We are required by the EU to take on the debts of the European banks and pay with the sale of national assets, like Greece selling beaches and Portugal selling its unique Port vineyards.

This is a polite form of robbery and runs in the teeth of everything Europe has stood for, in Irish eyes, since we joined the Common Market 40 years ago…”

The Daily Bail
Business Insider

Ireland’s Fine Gael party will take control of the government after winning in yesterday’s elections.

A few weeks ago, they were threatening to give haircuts to bank bondholders, but now most “serious” people in government and the media believe this will never actually happen.

However, the wildcard in all of this is the Irish people themselves — they’re expecting real change, not half measures.  And some of them are openly talking of a “revolution.”

It remains to be seen whether the moment of truth has finally arrived for Ireland’s bank bondholders.  As predicted, Ireland’s opposition party, Fine Gael (pronounced “feena gail”), did very well in yesterday’s elections and will likely form a coalition government with Ireland’s Labour party.  As we reported earlier, Fine Gael played to voters’ anger over the bailouts by engaging in a good deal of tough talk about unilaterally restructuring the debts of Ireland’s bailed out banks.

However, the tough talk will likely turn out to be nothing but talk…

…if the politicians won’t give the people the opportunity to vote down the bailouts — and there is zero indication that they will — there remains the distinct possibility that the Irish people will hold their own national “referendum” in the streets of Dublin.  We’ve already seen flashes here and there of bailout anger and a few, large protests over the bailouts, but all of these were before the election that was supposed to change everything.  When the people see that almost nothing has changed, and especially when it becomes clear — as Arnold points out — that Ireland’s very sovereignty and solvency are at stake, things will get very interesting indeed.

Just yesterday I was listening to NPR on the radio and they were interviewing a young unemployed woman in Dublin about the election and what people were most concerned about.  Bailouts and austerity were the main focus of the conversation.  But at the end of the interview the young woman was asked whether she would be glad if Fine Gael won and a new administration put in place.  She half-heartedly said that she would, but then said, with an understated frankness, and just a slight hesitation that suggested she really meant it,  “I’d rather call for a revolution, actually — if I could.”

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