Craic On

A good article in financial newspaper and TV group, Bloomberg, shows that the German taxpayer was the main beneficiary of the EU bailouts sucking in money from EU taxpayers across the Eurozone including Ireland.

The articles which is here shows that the German taxpayer was bailed out even more so than Greece.

The Sting

Here’s how the sting worked.

1. German banks did a risk assessment when Irish banks like Anglo-Irish came to them looking to borrow money to give out 120% mortgages to people who had shown no previous ability to be able to save. Their Risk assessment departments, stuffed with the very brightest graduates, and their risk assessment software told them that this was a good risk and they loaned them the money. A huge bubble in construction and house prices ensued.

2. When the bubble burst it looked as those who had been making plenty of money before from this foolish lending, i.e. the German and Irish banks were going to go bust and lose all their money. This is what happens in business. If you make bad investment decisions you lose your money and that is the end of the matter.

3. In Ireland, the taxpayer, who made no money from the previous large profits, was asked to pick up the tab for Anglo-Irish and the other foolish Irish banks lending money.

4. Now here/s the clever bit, in the same spirit, the German taxpayer should have been asked to pick up the tab for the foolish lending by the German banks (if we follow the same rules). However, the German banks managed to get all the money out and so were not punished at all for their bad investment decisions.

5. The loans got transferred to the EU as a whole, giving the German banks back all their money, so the EU and the IMF loaned the Irish taxpayer the money so that the money could all be paid back to the German banks and so that he German taxpayer wouldn’t have to pick up the tab.

Even under those rules the Irish taxpayer should have been paying back the German banks over many years. However, as the debt was transferred to the EU, the Germans got all their money back in full and it is to the EU as a whole that the Irish taxpayer has to pay back the money.

As Irish taxpayers are part of the EU, they, like all the other taxpayers in the EU, had to stump up the money to loan Irish, Greek, Portuguese and Cypriot taxpayers.

Very clever isn’t it?

The Sting

Of course the German taxpayer had to pay as well but as they are 28% of the EU by population they only took on 28% of the debt whereas if the German banks had not been bailed out by the EU and IMF and by the Irish taxpayer and others the German taxpayer would have had to pay for 100% of the bill for the bad investment decisions by German banks.

So, where did the EU and the IMF get the money to loan to the Irish and other EU payers to pay back the German banks?

That’s right!

They got much of it from the German banks who will now make a huge profit on it.

Can’t Lose

This is the casino player who cannot lose.

If they lose the casino simply makes the other casino goers pay them their money back.

I remember when I was a kid this guy who owned a football that we played with. If someone kicked the ball and it burst he demanded that the person should pay. We worked out that this would be an everlasting ball until he himself kicked it last.

Dumb and Dumber

Neither Cowen nor Kenny worked out that the Germans would always get their money back whether they made good investment decisions or bad ones.

The Germans must have seen them as patsies in this, the biggest heist of all time. They must have thought it was like taking candy from kids.

The Germans were able to do this because they are big and we are small and they tell the EU what to do.

Astonishing

It’s astonishing that the Irish taxpayer has let them get away with this heist which has crippled their country and the future of their children when they had no part in the poor investment decisions made by both the Irish and German banks.

As Bloomberg said “irresponsible borrowers can’t exist without irresponsible lenders”.

Enda Kenny said that it all happened because a lot of Irish people went mad. They were just trying to buy a house to live in. The ones who went mad were the German and Irish banks – and it was mad with greed.

The ones who suffered were the Irish banks and the Irish taxpayer. The ones who got off scot-free were the German banks and the German taxpayer got off with only 28% of the debt that they should have picked up unlike the Irish taxpayer who was stuck for the lot.

Read the Bloomsberg article here

It’s surprising that