Saturday, June 11, 2011

How they calmed the tides of war

The Iceland versus Ireland debate is back on.  The above is a slide from a presentation that the then Irish Minister for Finance, Mr Brian Lenihan (RIP) delivered in February 2010.  Leaving aside the straw man version of what opponents of Ireland's banking sector policy were arguing for, the attitude reflected in the slide is revealing.  Only a crazy messed up place like Iceland tried taking over the insolvent banks early on, and if we had tried it, there would be no funding for the banks or the state.

Fact: Iceland just sold sovereign debt at a 5 percent yield, which is better than Ireland's interest rate under its IMF/EU program.  And the Irish state is about to be a majority owner in all its banks. 

Poor old "Iceland!"  Can we have what they're having?