Today is budget day in Ireland and it’s going to be a black day for many with one of the harshest budgets in living memory set to be voted on. The Irish Times in it’s lead article suggests that the budget will in fact be passed. The budget is necessary in order to implement many of the spending cuts which were part of the EU/IMF agreement.
Were the budget, for any reason, to get voted down then the bailout package would be jeopardised, Irish banks would go into freefall as would the German and French banks who irresponsibly lent to these Irish banks. Senior bond holders in Irish banks would again be up for some huge losses and the financial markets would go ballistic. The EUR would probably collapse only to bounce back on rumours that Ireland was going to have to leave.
Probably just as well that they pass it then!
