Monday, 22 November 2010

Bailing Out Ireland

Being the thoroughly decent chaps that we are, we have dug deep to lend Ireland £7 billion.
Chancellor George Osborne said that it was 'overwhelmingly in Britain's national interest to contribute to a major bailout'.
Now i am all for spreading around the wealth but hasn't George Osborne just been telling us we are broke and he had no choice but to cut 500,000 public service jobs, slash benefits and shut down public services through lack of money?
So where did he suddenly spring the £7 billion from to hand to Ireland?

a>The Government are giving Ireland what they saved by the deficit reduction programme.
b>Britain wasn't as stoney broke as the Government made out.
c>We are borrowing £7 billion from somewhere to give to Ireland.

If the answer is a, then we should all be turning up at Millbank armed with flaming torches because we have been decimated to bail out another countries banks.
If it's b then we should still turn up at Millbank because the Government has cut us to the bones for no reason.
If the answer turns out to be c then we now need to find £176 billion from somewhere rather than just £170 billion.
Whatever the reason, Ireland is up the swanee because it spent outside of its means and has borrowed too much money...and the solution is to lend them tens of billions more.

1 comment:

Cheezy said...

This isn't anything to do with charity or aid. It's a necessary evil to save a much worse evil - i.e. If Ireland goes bust then the money (I think it's £53 billion) owed to the Royal Bank of Scotland gets written off as a bad debt. And, as we know, over 80% of RBS is now owned by us.

So this isn't just a bailout of Irish banks. This is a bailout of UK banks who loaned too much money to the Irish in the days of 'irrational exuberance' before we stepped in and saved them (and ourselves).

Also, it's an interest bearing loan, not a gift, so after the Irish kick their current idiots out and elect some better people (and the world economy recovers) then we should get this money back in the long-run.