- Nov. 25, 2010 -
trade” strategists believe that Ireland’s government is unlikely to survive into next year after it finalized a deal with the EU and the IMF which effectively nationalizes its stricken banks.
Ireland will receive funding to the tune of €85 billion to recapitalize its banks and fund its public finances but, in return, it must impose a raft of additional austerity measures over and above those it had previously implemented including a cut in the minimum wage from €8.65 per hour to €7.65 and an increase in VAT.
trade” analyst said, “It will be those least able to bear the effects that will suffer most from these draconian cuts in spending and tax increases. Many of our Irish clients have protected their savings by switching out of the euro and into other currencies and hard assets but we cannot protect them from wage cuts and tax hikes”.
Ireland’s banking system bears little correlation to the size of the nation’s economy but “Continental-
trade” suggests that it was the government’s pledge to guarantee 100% of all deposits within the system in the immediate aftermath of the shock of Lehman Brothers’ collapse together with a relentless surge in home repossession that pushed the system to the brink.