Having been “protected” from the outcomes of their own economic decisions and given an EU bailout instead, Ireland seems to have become dependent on the largesse of others and incapable of working through their own problems toward their own prosperity.
Here’s what’s going on now, as described by Christoph Pauly of Spiegel Online International [emphasis added].
Ireland’s demands are very precise—and could be costly for the Germans. At stake are the €31 billion that the country received from the system of European central banks to save two crisis-ridden Irish financial institutions in 2010 [Note: this is the original bailout]. The country is expected to pay this money back in installments over the next 10 years.
Already last year, the Irish pushed long and hard until they were allowed to pay back the first installment with the help of a new loan. But that was not a long-term solution. Starting this year, the state will explicitly be liable for the debts of Ireland’s nationalized banks. This has prompted the Irish to look for a more creative solution this year. “We would like the payback period for the debts to be extended and the interest rates to be cut to a reasonable level,” European Affairs Minister Lucinda Creighton told SPIEGEL.
… For [ECB President Mario] Draghi, the simplest solution would be for the European Stability Mechanism (ESM), the euro zone’s €700 billion permanent backstop fund, to step into the breach and take over the debt.
Kenny would ideally like to use the ESM as a way of getting European taxpayers to shoulder the risks associated with all the debts of the Irish banking sector.
The “European taxpayer” should no more be in the business of indemnifying the Irish (or the Greeks, or anyone else) from the consequences of their own decisions today than they should have been put on the hook via the first bailout. However, having been addicted to OPM for their own problems, the Irish government is finding that addiction hard to break.
It’s important to note another factor. The Irish did not did not want that original bailout, and they did not voluntarily ask for it. They were dragged kicking and screaming into it, the money forcibly injected into the veins of their banks. The dependency of the bailout is no less powerful for that, however.