The Irish canaries are chirping

It seems that not all the Irish taxpayers are enamoured with the policy of standing behind their banks' losses. To be sure, this piece in the Guardian is written by a media studies lecturer and the director of the Centre for the Study of Wider Europe (the Guardian columnist stereotypeometer just melted down) but their basic point is what I've been expecting to hear for a while - why should the Irish voter be expected to pay for the profligacy of its banks and the stupidity of European banks in lending to speculative property buyers?

The money quote:

The far-reaching implications of the fiscal compact will surely outweigh political anxiety about volatile public opinion, and result in a referendum.

That's not going to work out too well for the debt-holders if it happens. If I were the Irish leadership I'd be using articles like this as a sword of Damocles over the heads of the debt-holders. "Nice bonds you've got there; 'twould be a shame if anything were to happen to them." I wonder if there are going to be some quiet re-negotiations and write-downs in the months ahead. If not (supposing for instance that the central European banks are so leveraged that any significant write-down on the debt would seriously hit their numbers) I can foresee a particularly bloody confrontation.

I particularly liked careenage's comment:

This isn't about rewarding Ireland, it's about protecting the world banking system from the consequences of its bad lending decisions. The question you should really be asking is, if Ireland were to default, would the consequences be any worse than what is currently happening? What would the EU do? Park tanks in the centre of Dublin? Tell the EU and the banks to get lost. Things will be painful for 18 - 24 months but it can't be much worse than it is already.

I wouldn't like to play him or her at poker.