Going off the rails

AT some stage the EU will pull the plug on further bailouts which will leave many countries like Ireland in a hard place.

The EU is not in the business of successive bailout loans for countries that have been their own architects of demise. There is already strong opposition with the EU to further capitalisation for countries like Ireland that are in a bad situation that was homegrown. The money that we have got will take give us a few years, and if by then, the economy shows no sign of recovery, our hand will surely be out again for more cash. If any debt is cancelled, it will weaken any further attempts to get money from a cash-strapped EU that doesn’t take to kindly to bailing out dodgy banks with poor national regulation. A country just cannot keep on borrowing. Borrowing leads to more borrowing which can make things worse, not better.

The EU is hardening up on countries like Ireland that are requiring huge amounts of funding to keep their ailing economies and banks from going under. The big question is when will the EU/IMF gravy train stop and what happens then?