Ireland is sliding closer to bankruptcy. As Simon Duke writes in the Daily Mail, investors are worried that the Irish government which has the thinnest of all majorities will be able to make the budget cuts and slash £5.16 billion from its 2011 deficit.
Brian Devine, chief economist at NCB Stockbrokers in Dublin has told Duke that Ireland will only be saved by a Greek-style bailout from the European union. And even then, the economy will be badly damaged and unlikely to recover.
Writing in the Irish Times, University College economics professor Morgan Kelly says Ireland is already insolvent after the €70 billion bailout of its banks.
Kelly writes: "As a taxpayer, what does a bailout bill of €70 billion mean? It means that every cent of income tax that you pay for the next two to three years will go to repay Anglo's losses, every cent for the following two years will go on AIB, and every cent for the next year and a half on the others. In other words, the Irish State is insolvent: its liabilities far exceed any realistic means of repaying them. For a country or company, insolvency is the equivalent of death for a person, and is usually swiftly followed by the legal process of bankruptcy, the equivalent of a funeral."
One thing is clear. Even if there is European intervention, we can expect more young people to leave the country. The talent pool will be drained. Ireland, once one of the richest countries in Europe, is sinking. We can expect its economy to slip into third world status.
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