INTERNATIONAL COVERAGE of Ireland’s decision to seek a European bailout is broadly positive, with many apparently relieved at the thought that Ireland’s uncertain future – and the insecurity of the rest of the world’s economies – has been put to an end.
‘Europe Welcomes Irish Request for Assistance’ is the New York Times’ headline, leading with the angle that “European Union officials, which had been pushing Ireland to accept help, quickly agreed to the request, committing a staggering amount of funds to an ailing member for the second time”.
It also gives prominence, however, to the key difference between Ireland’s bailout and Greece’s one: that Ireland’s costs have been incurred by the decision to support the banking system, as opposed to Greece’s public funding crisis in April.
Similarly, the Financial Times’ piece – ‘Europe signs up to Irish rescue’ (free subscription required) – welcomes the quick move by Europe to underwrite Ireland’s request.
The rescue was driven by the need to assist Ireland’s debt-ravaged banks and prevent contagion from destabilising the 16-nation eurozone.
It also discusses, however, the possibility of other agencies hopping on board, and reports the confirmation from Britain’s chancellor George Osborne that the UK would offer Ireland a bilateral loan of “around” £7 billion.
“Ireland is a friend in need and we’re here to help,” it quotes Osborne as telling the BBC, adding that it was in Britain’s national interest to ensure that a close neighbour sharing close economic ties continued to flourish.
Sky News gives similar prominence to Britain’s role; quoting Osborne thusly:
We do a lot of trade with Ireland, we have a border with Ireland and it’s not in our interests that the Irish economy fails… [the UK's] bilateral loan is in the billions, not the tens of billions, but the details are being worked out as we speak.”
The role of Ireland’s “outsized” banks is the focus on Bloomberg, bluntly recycling a quote from Brian Lenihan that “the banks were too big a problem for the country … the key issue all the time for the government is to ensure that we do not have a collapse of the banking sector.”
It also notes that Irish officials had asserted – exactly a week ago today – the ability of the state to survive without a bailout, and describes the about-turn as “the latest blow to an economy that more than doubled in the decade ending in 2006.”
The site’s opinion writer Simon Johnson, however, believes that the “modest package” being offered to solve the Irish/European problem will struggle to restore the world’s economic balances, and will give China an opportunity to pounce on European floundering. He writes:
There won’t be any quick jump to a solution; it will be slow, painful-to-watch chess match in Dublin, Brussels and around the IMF headquarters in Washington, with obvious and costly spillovers to Portugal, Spain and perhaps other countries.
The Wall Street Journal’s attitude is all told by the second word of its piece. Under the headline ‘Ailing Ireland Accepts Bailout’, its first line is given a distinctly relieved tint by the word ‘finally’.
Ireland finally sought tens of billions in bailout money from the European Union and the International Monetary Fund after weeks of bickering that has exposed the limits of Europe’s attempt to restore financial markets’ confidence in the stability of its single currency.
It elsewhere notes, however, that the eventual path of how Ireland arrived at seeking foreign aid was a shock to the system in terms of how the rest of the EU expect bailout requests to go.
“Instead of welcoming the aid,” it notes, “Ireland – reluctant to give up control of its tax and spending policies – caught other EU nations off guard by fiercely resisting help.”
German news magazine Der Spiegel’s opening gambit shows how Germany – which, inevitably, will be stumping up most of the cash for an Irish bailout fund – sees the rollout.
“First the Greeks, now the Irish,” it opens. “Europe’s finance ministers have agreed a rescue package of up to €100 bn for the island nation. In a humiliating U-turn, the country’s government has asked for help – and amid great rage in Ireland, [German] finance minister Wolfgang Schäuble announces tough regulations.”
Its Q&A section on why Ireland has needed aid is similarly blunt.
Why does Ireland want emergency assistance?
Because the government has thrown away billions in guarantees for its ailing banks, running up a record debt, Ireland is on the brink of bankruptcy. At least – unlike Greece, which had to be rescued from collapse in spring – there is no acute shortage of cash, because the country’s debt (for now) is refinanced.
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