Ireland Was Forced by ECB to Take Bailout

An interview with former Irish Finance Minister Brian Lenihan leaves little doubt that the purpose of the Irish bailout was to save the Inter-Alpha banking system. Although he doesn't say it in those words, Lenihan made clear that it was the European Central Bank that forced Ireland into taking a bailout. In an interview with the Irish Times, Lenihan says it was, above all, the ECB that insisted on Ireland taking the bailout.

In addition, the Irish Times reports that the ECB got support in its efforts to force a bailout from the head of the Irish Central Bank Patrick Honohan, and from London's Financial Times. It was Honohan, who on Nov. 18th, 2010, just days before the decision was made, was the first Irish official to say that an aid package was in the works for Ireland. He made that statement on Irish Radio after he learned that the next day the Financial Times was going to run an editorial "saying effectively people should be planning on bank runs."

In what is clearly a confirmation that the bailout was for the banks, Lenihan said, "It became clear to us that the European solution was to stuff the banks with capital and see if that would generate confidence in them." He added that the amounts involved "stunned my officials in their sheer scale and size."

While Lenihan admitted that interest rates on the bailout were too high, he nonetheless defended his acceptance of the bailout and its terms.

Lenihan told the Irish Times that when the bailout talks were concluded: "I've a very vivid memory of going to Brussels on the final Monday to sign the agreement and being on my own at the airport and looking at the snow gradually thawing and thinking to myself, this is terrible. No Irish minister has ever had to do this before."

http://www.larouchepac.com/node/18025