I agree with Guido…
At least on the immediate question of Ireland.
They should default. 20% of tax revenues going on interest payments is not sustainable. Better to default early than drag it out.
This is our trump card and we must have the courage to play it. The deal is simple. If they don’t do the deal willingly, we need to default and see what happens. And do you know what will happen? They will find a mechanism to take the shares of Irish banks onto their balance sheet. And the crisis will be over, because they will not risk the euro and all that political capital to teach the Irish a lesson.
More on this question at Slugger O’Toole.
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Can I recommend the animated version? Complete with leprechauns, Father Ted and a convincing looking Celtic Tiger but still a pretty shrewd analysis at the end of the day
this worth a read Duncan:
http://www.irisheconomy.ie/index.php/2010/12/01/barry-eichengreen-on-the-irish-bailout/#more-8831