From David McWilliams – We’re broke but still buying rounds that we can’t afford:
By pretending that we can afford the bailout, Ireland is now behaving like the poor guy at the bar, digging deep for the last few cents to keep up with a round system that he can’t afford. We know that we can’t afford the IMF/EU deal, even if the interest rates were half the 5.7pc, and the reason we can’t afford it is that we are the poorest country in Europe. Yes the poorest. You read right — poorer than Albania, poorer than Serbia, poorer than Bulgaria.
If the definition of wealth is the difference between your liabilities and your assets then the definition of poverty is how much greater your liabilities are than your assets.
We are the most indebted nation in Europe and although it doesn’t seem like it now, we are among the poorest. Granted, our capacity to earn is higher than traditionally poor countries, but our balance sheet is wrecked. It is being kept afloat by more and more loans from foreigners…
It is time to tell the ECB they are not getting their money back because, after all, this is what a Central Bank does, it is the lender of last resort. It is time to walk away from the subordinated debt holders. It is time to force a debt for equity swap for the remaining bondholders and it is time, armed with an overwhelming referendum-based mandate, to stand up for the people.
We need to stop buying rounds we can’t afford.