Ireland has secured €85bn in emergency funding for the time being. This loan will enable it to keep playing a dangerous game for a while longer. While the bailout may appear to be a positive development to some, the strings that its creditors will no doubt increasingly attach to it will hamper Ireland’s independence moving forward.
The more pressing question that we may ask is whether accepting the money was the best action to deliver Ireland to a prosperous future. If Ireland’s ailment was indeed a lack of liquidity, a short-term loan may indeed be just what the doctor ordered. Unfortunately, today’s crisis is anything but one of liquidity. What plagues Ireland, and the rest of Europe’s periphery, is not a lack of liquidity but a more damaging lack of solvency. Short-term loans will provide little relief from this long-term problem.
What is needed instead of an analysis of the current problems is adeeper reflection of the true nature of the problem at hand. Philipp Bagus’ new book “The Tragedy of the Euro” provides just what the doctor ordered.