David McWilliams (Irish economist) has an article in which he all but said Ireland needs to leave the Euro to be able survive the recession. Although I’m somewhat disheartened by the disbelief in the mere mention of leaving the Euro (in the articles comments) I’m glad we’re on the same page. Although we may not have to actually leave of our own free will, as of this moment there is a very high chance that we be flung from the Euro as the economic pariahs of the EU.

Events have moved fast since the announcing of the closing of Dell in Limerick and now Anglo Irish Bank (the third largest bank in the country) has been nationalised. It seemed when the government began having a look into the institution to give it a €1.5Billion bailout package it found something much worse, something that €1.5Billion couldn’t fix.

No big deal some may say, and in the whole scheme of things across the world this is now becoming the norm. But here is the issue, in taking on this bank, the state has now taken on it’s liabilities. All €30Billion of them. This is now thrown on top of a €40Billion national dept. Overnight (literally as the takeover order was given Thursday night) the national dept of the country has nearly doubled, and this is a dept which our country of 4 million does not have the resources to pay.

And on top of this there is at least another of the banks that are likely to follow Anglo Irish in the space of a few months. The debts being taken on are far greater than the entire state is capable of paying, the Irish government has followed Iceland into this grey abyss. Instead of letting the bank fail the government has caused the state to fail.

So what might happen, there are a few possibilities.

We get a bailed out by the ECB and other EU countries. We get kicked out of the Euro. We go to the IMF for help (either in or out of the Euro).

In the first case Europe may try to use us as an example of the stability and power of the Euro and bail us out. But it would effectively mean that the EU owns Ireland and would expect the country to tow the line in future EU issues. Effectively the country would lose it’s indepenedence.

The second case the EU decides to toss us out of the Euro, Ireland reverts to the Punt and begins massive currency devaluation, following exactly in Icelands footsteps.

And in the third case of IMF involvement we could expect the selling off of all government assets, raised taxes, and removing 30-50% of civil servants (without any redundancy pay). In short whichever of the above options is taken people across the country must realise we are all Icelandic now as in we are all truely fucked.