Berlin and Paris ‘ruled Irish taxpayer should bail banks’

Germany and France, rather than the European Central Bank, made the decision that Irish taxpayers should bail out the banks, states a new book.

The alternative would have cost German and French banks multi-billions of euro, especially the Munich-based Hypo Real Estate, a senior source told the authors of a book on the politics behind the eurozone crisis.

Chair of the European Parliament’s economics committee Sharon Bowles, who has been highly critical of the decision, said German chancellor Angela Merkel had been badly advised. Germany and France thought they could tame the markets, she said, but instead Ms Merkel and French president Nicolas Sarkozy unleashed the speculators in the crisis that threatened the euro.