European Council: Portugal overshadows Irish bank meltdown
25 March 2011
According to the Irish Independent the scale of Ireland's economic collapse and EU/IMF bailout rescue can be measured by figures currently circulating at the 24/25 March European Council in Brussels.
“Portugal, population 10.7 million, is likely to need a rescue package of €70bn at most, while Ireland, population of 4.5 million, needed €85bn.
“The difference between the amount Portugal may yet need and what Ireland is due to pour into its battered economy can be explained by a range of technical factors. But chief among those is one simple fact: Ireland has a catastrophic and expensive banking crisis, whereas Portugal, broadly speaking, does not.
“Portugal has significant problems -- high debt levels, anaemic growth and an immediate liquidity challenge -- but all of these remain solvable. Even Europe's much-maligned rescue fund, the European Financial Stability Facility (EFSF), can accommodate a rescue of Portugal (although not Spain).”
For the Dublin daily, the problems for Ireland’s new Taoiseach, caught up in a “high stakes poker game” are manifold. Not least that Ireland’s toxic banks may need a further recapitalisation of €35bn. Accused by their taxpayers “of propping up other wasteful and feckless EU members states”, German Chancellor Merkel and French president Nicolas Sarkozy have little room for manoeuvre. And with Portugal’s woes uppermost in everyone’s minds -
“…the complexities of finally solving Ireland's economic and banking woes appear to be beyond even the best minds in the EU Commission, the IMF and the ECB.”