When Irish Eyes Aren't Smiling: The Proposed Bail-Out Of Anglo-Irish Bank

To quote that great philosopher, Scooby-Doo: Ruh-Roh!

Or to quote the late Harry Cary, that wonderful voice of the usually hapless Chicago Cubs: Holeee Cow!

From France24:

AFP - Ireland warned on Thursday that the state rescue of Anglo Irish Bank could cost 34.3 billion euros, pushing the public deficit up to 32 percent of economic output this year.

The potential rescue bill, equivalent to 46.6 billion dollars, is roughly the same as Ireland's annual taxation revenues.

The news that the deficit could be equivalent to almost one third of everything produced by the country in a year comes amid mounting investor concern about soaring levels of eurozone state debt.

This week, the yield, or rate, on Irish government debt rose at one point to the highest level since the euro was created, signalling that the government could have trouble in financing its overspending.

Finance Minister Brian Lenihan defended the rescue, saying the "nightmare" collapse of Anglo Irish would have pushed the country into insolvency, in remarks redolent of the recent crises in Greece and non-eurozone country Iceland.

"Unfortunately this bank grew to half the size of our annual wealth and the failure of a bank of that scale would render the country itself insolvent," he told RTE state radio.

Denninger passes along the account of a conference call last week hosted by Mr. Lehihan, designed to calm investor nerves, that turned into a free-for-all, and had to be abandoned.

Remember last spring, when we were assured that ThePeopleInChargeOfTheseThings had resolved all these nasty questions about governments defaulting on their debts?

Lucy! Wha' Happen'd??!!!