The Irish government’s decision to nationalise the country’s
third largest Bank Anglo Irish is yet another sign of the fragility of the
Irish economy. As explained over the past period the bubble is seriously affecting
the real economy and this is the outcome.
The nationalisation move comes after the government had originally proposed a
€1.5 billion bail out plan. The situation at Anglo Irish however has clearly
got much worse. Things haven’t exactly been helped by the revelation from the
Finance Minister as to how the management had been running the bank.
“Mr Lenihan said the “unacceptable practices” of former chairman Sean
FitzPatrick – who had hidden loans of at least €87 million in loans from Anglo
from its shareholders and auditors – had “serious reputational damage to the
bank” and that “market sentiment towards the bank become negative.” Irish Times
Not surprisingly Irish banking shares have plummeted as a result, and given the
relatively small size of some of the banks, it’s likely that this isn’t the
last word on the subject. Other banks may follow as they all face the same
general situation. Once the shares start tumbling, as in Britain and the USA,
it’s a matter of the devil take the hindmost.
At the same time increased borrowing and the very sharp rise in the Live Register
(dole) means that government finances are going to take a pasting. As yet, it’s
not clear whether the perceived benefits of being in the Euro zone will be as
apparent once the recession takes hold. The ECB cut interest rates by 0.5%
yesterday, but there’s far less likelihood of the Euro zone governments sharing
the pain than there was of them sharing the benefits of the boom.
• You can’t control what you don’t own. We need worker’s control and management
of the banks.
• No wage cuts!
• No redundancies!
• Make the bosses play for the crisis!