Can someone explain in simple english what the potential EU bailout means......(if it happens)
Is it a simple case that the EU will lend money to Ireland at a good interest rate ?
Or is it a case that the EU will directly lend money to the Irish banks to keep them solvent (with no impact on the national debt)
Does it have any impact on NAMA ? Will the funds be used to buy toxic assets off bank's balance sheets ?
Sorry about the dummy questions.
IMO they should take the bailout and then let Anglo go to the wall. Who gives a **** what the bondholders think once we have our money.
Brilliant,Here's my understanding Brian (I have assumed you are either Brian Cowen or Brian Lenihan!)
What other downsides (apart from a possibility of increasing the corp tax) might there be ?
Every Government in Europe cares about what the bondholders think (despite political posturing by German officials). EU come in and burn bank bondholders, it is goodbye to Portugal, Spain and probably Italy as well. Once that happens, it is goodbye to the Euro and probably goodbye to the EU.
This crisis can never be allowed happen again and bondholders/investors should never have this power again. However, the reason they do is that every Country in the EU at the moment depend on these guys to fund the running of their Countries. The bondholders didn't run up huge deficits that needed financing. Governments did.
Many, many people are asking this question. There has already been a massive run on Irish banks, but the haemorrage has been bandaged by 130Bn of ECB support. Ordinary punters don't seem to have panicked yet and as an ordinary punter I am assuming (maybe naively) that even if all deposits were withdrawn from Irish banks the ECB would fill the hole. The promise of our government is no longer worth anything. We are hugely dependent on the support of the ECB and it is hard to see why they would ever pull the rug.Should we shift savings out of Irish Banks to the likes of Rabo etc or would the run cause a worse issue for the country (I don't care about hurting the bank's as they don't care about us)?
They borrow it from governments - the other governments print it
Government or rather Central Banks add money to their accounts with the press of a button, and hey presto! more money! then they use that money to loan to an ordinary bank and so the money enters into circulation. Remember most money today exists as numbers in a computer.
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