So why not liquidate the banks and their bad debts at whatever clearing price we can get and start again with an almost clean sheet? It's not pretty but it beats dragging out a recession for the next decade
Even if we could wave a magic wand and banish the debts, what are we going to start with?
We're back to Tourism/Agriculture/Foreign firms.
Tourism/Agriculture/Foreign firms is mostly where we're at in 2008 and they are shackled with with the overheads imposed by servicing the debt leftover from the construction boom, pricing us out of the market and out of work.
Ireland's short-term economic outlook thus appears grim and the downturn could possibly in the short term be even worse than in America. However, because the ECB seem determined not to cut interest rates and because Ireland is unlikely to leave the euro area, this means that the problems won't be postponed and aggravated to the same extent as in America. That means that Ireland has a much better chance than America of recovering a sound economy. While for example Thailand and South Korea suffered more severe downturns after the Asian crisis in 1997-98 than Japan did after the bursting of its stock- and real estate bubble in 1990-91, at least they got rid of the excesses and could recover strongly. Japan by contrast kept postponing the problem, preventing any permanent recovery. Ireland is likely to suffer a more severe downturn in the short term, but it will likely soon get rid of the excesses and then return to strong growth, as was the case in Thailand and South Korea. America like Japan, by contrast seem determined to postpone and aggravate the problems, and so make them more permanent.Ireland Slips Into Recession http://stefanmikarlsson.blogspot.com/20 ... ssion.html
We don't have the option of inflating our way out of this crisis (It's not a good option anyway, but it is more politically acceptable). The gig is almost up on the corporate tax scam and the East Europeans have settled on a flat tax model, how long more before that leg is pulled from under us?
The Irish banks are clearly the Achilles heal for the Irish economy, with their unserviceable debt weighing us down, either they get recapitalised or they go broke. I am in favour of calling in the receiver, seize their assets (loans) to cover their debts (savings) and put them in a trust so the money can be recovered over time.
So a big reset would restore our competitive advantage, in the above areas and allow us to develop indigenous industry?