Irish banks will be accompanied with huge bailout which the Ireland will need to navigate its way out of a spiraling debt and banking crisis according to the Irish government minister on monday. Irish finance minister suggested significant financial struggle that they are going through as he stated that the Irish banks will not be able to access normal markets until they are reorganized. The rescue bailout package which will be issued to Ireland from EU(European Union) and IMF (International Monetary Fund) is worth up to 100 billion euros (US$ 137 billion) and it is expected to keep Ireland solvent for at least three more years.Experts believe that the main factor which lead to the near bankrupty of major Irish banks is because of Irish government's risky investements which they have made towards British and American properties. According to the statistics, the taxpayers in Ireland has paid over 50 billion euros over the past two years as Irish authorities nationalized three of the major banks and took major stakes of two additional banks since 2008. It is said that government's risky investment or "gamble" has lead to country's financial sector to beco
me almost bankrupt and these investments could not have been possible without governments action on nationalizing and taking stakes of the 5 major banks in Ireland. Therefore the Irish government, especially the prime minister, Brian Cowen is being blamed for financial struggle of Ireland.
me almost bankrupt and these investments could not have been possible without governments action on nationalizing and taking stakes of the 5 major banks in Ireland. Therefore the Irish government, especially the prime minister, Brian Cowen is being blamed for financial struggle of Ireland.EU-IMF bailout is intended to give Ireland somewhat long term stability as they sort out their problematic issues in order to prevent Ireland's bank, government and market from crashing and collapsing. Entire EU as well as the world will be focusing their perspectives towards Irish government and the decisions and policies they will be making in order to reorganize the country and get back on the track.
In my opinion, I find the financial struggle of Ireland very shocking and problematic. First of all, according to the HDI (Human Development Index) for 2010, Ireland has the 5th highest HDI in the world. Therefore it was stunning to see a country with 5th highest standard of living struggle financially due to its major banks being on the verge of bankrupty. Secondly, it was disappointing hear about the cause of the whole situation. I believe that Irish government should not have nationalized and take major stakes of the banks in Ireland. As the Irish government took control of the major banks, they were able to control their financial budgets easily without any serious questionings or conflicts. Thus the Irish government was able to invest billions of dollars towards risky investements such as the properties in foreign countries. There is no doubt in my mind that this risky investment was not worth leading five major banks in the nation to bankrupcy and spending over 50 billion euros from the citizens without definite assurance.
In order to minimize the impact of this incident and to secure financial stability for the country and its citizens, the Irish government should act immediately by accepting the bailout and financial supports from other countries. Moreover, the Irish government must come up with assuring and definite plans to reshape and reorganize country's financial mangement, economy, banks and so on. At times like this, where the world's economy is struggling, it is government's full responsibility to approperiately guide, organize, and help the citizens in every aspects including suitable financial and economical managements and supports.
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