What's the difference between Ireland and the UK? Two years

What’s the difference between Ireland and the UK? Probably about two years! When Ireland’s property and credit bubble burst the Irish government poured tens of billions of Euros into the banking and building industries to stop them going completely bankrupt. They endured a deep recession which saw tax revenues decline dramatically. To pay for this bail out and recession they made massive cuts in public services, wages and jobs and put taxes up. Just what the coalition is planning for the UK.

The result is a further weakening economy and a more losses on the banks as new houses remain unsold and house prices continue to drop. When you have 300.000 unsold new houses and the total housing requirements for the Ireland is about one million you know you have one hell of a bubble!

Their deficit is widening as the economy remains in decline and they need more money to prop up their banks as they suffer more losses as the property market keeps on sliding. Except nobody will now lend to them and they have to turn to the European Union (EU) and International Monetary Fund (IMF) for an emergency loan worthy around 85 billion Euros – this would be about the equivalent one trillion Euros for the UK. Of course to obtain this emergency loan the Irish people will face 10% of cuts over four years in services, jobs and wages and an increase in taxes.
Why is everyone so bothered about Ireland? Well it’s because global banks have a $US 700 billion exposure to Ireland with $US 500 billion held by European banks of which $US200 billion is with UK banks. They will likely see a 20% loss in these loans.

Next up is Greece, Portugal and Spain which international banks have an incredible $US2 trillion exposure to private and public debt. If these countries go under and need bailouts then it likely that the EU and IMF will not have their pledges of support from countries met for their emergency funds. There is a real chance of a run on developed market banks with more bailouts and more cuts and more recession. If some countries go effectively bankrupt then European banks will suffer huge losses greater than in the first wave of this great recession. So far global banks have lost $US 2.2 trillion on bad loans made good by government bailouts with another $US 1.8 billion short fall from recession and support measures for the housing and the car industry.
This $US 4 trillion bill is now being picked up by us globally through cuts to services, jobs, wages , pensions and tax rises.

But this is their crisis not ours. The property boom, the credit needed to finance it and the loose financial regulation which acted as a conduit for this credit is part of capitalism’s answer to their last major crisis in the mid-seventies that saw too many goods produced, too much capital accumulated while profit rates declined.
But people are resisting around the world from Athens, to Paris to Dublin to the UK and say we won’t pay for their crisis. Out of this resistance movement will come an alternative to the cuts, bailouts and crisis that capitalism offers us. An alternative were the wealth is shared equally and there are not capitalist banks that take us to the edge of the abyss but peoples’ banks that help create social useful services and jobs for all.