UBS Paul Donavan on Ireland; The Irish money laundering will go through the government because that is the only way that the EU can gain leverage over Ireland and force conessions

The Irish have coyly suggested that if the EU and the IMF want to offer them some tens of billions of Euros in cash, then it would be rude to refuse. However, the central bank governor and finance minister are at pains to point out this is for the banks, not the government.

 The EU is at pains to point out that any suitcases stuffed with high denomination banknotes that find their way to Dublin will be for the government - which can then do what it wants with the money. The issue here is that if the cash goes to the government, the government can be forced to make concessions.

Ireland thus stands as a monument to the folly of ignoring economists' advice. It joined a monetary union it should never have joined (economically the Euro does not work). Its bubble inflated, then burst as economists were ignored. Now politicians squabble over the terms of a bailout with regard to economists.

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