Ireland may leave the EU if the UK does

The head of Ireland's business lobby group, IBEC, has told a German newspaper that Ireland may leave the EU if the UK does.

Danny McCoy told Frankfurter Allgemeine Zeitung that the UK could become very attractive outside the EU for multinationals based in Ireland and said "I'm not so sure if EU membership would be all that important for Irish multinationals".

He then went on to tell the Irish Times:

Everybody says Britain will lose out by leaving - all based on the assumption that somehow Britain's decision to leaves would be very costly for them.

There's only one concrete example of this kind in the past. That was in relation to Britain's decision to stay out of the euro. Britain was told: "If you don't go into euro, London as a financial capital would be diminished."

This never materialised and the City of London financial market had strengthened in the period since the single currency was introduced.

So why should similar threats in relation to Brexit be as clear?

Spanish government rebels against EU austerity

The Spanish government has defied the EU over its budget deficit target, setting its own budget deficit target 1.4% above the EU-imposed maximum.

The Spanish Prime Minister, Mariano Rajoy, described the act of defiance as a "sovereign decision" and broke with recent tradition by not informing the French and Germans beforehand.

Unlike Greece, Portugal and Ireland, a Spanish bailout would bankrupt Germany and the collapse of the fourth largest €urozone economy would devastate the single currency.  All of which means they can pretty much do what they want without the kind of threats given to Greece to ensure subservience.

News of Spain's defiance comes at the same time as the Irish government confirmed that it will be holding a referendum on the EU Fiscal Treaty which will be a huge disappointment to the Merkozy who thought they'd finally got their fiscal union in the bag.

Two down, three to go: Portugal is next

Back in November, the Republic of Ireland came under pressure from France and Germany to accept an illegal bailtout from the EU.  Ireland, of course, said it didn't need a bailout and that it was worried about the loss of sovereignty associated with mortgaging the country to the EU but what little faith investors had left in the Irish economy was undermined and a week later they accepted a €100bn loan from the EU (including several billion from the UK) and IMF.

The required changes to the Lisbon Treaty to make bailing out member states legal have been made (another broken promise by Cast Iron Dave) paving the way for the next bankrupt Eurozone country to be bailed out.  Greece has already had €110bn from the EU and IMF, the Republic of Ireland has had £100bn and next on the list is Portugal who will be taking €80bn.

Portugal says that it doesn't need a bailout (like Ireland said) but France and Germany are trying to pressurise the Portuguese government into taking a bailout sooner rather than later (like they did to Ireland).  The French and German stock markets fell by about 1 and a half percent each and the FTSE fell half a percent on the news and the Americans are fretting about the risk of European sovereign debt.

Portugal is going to try to sell €1.25bn of bonds on Wednesday to get its hands on some cash and the interest rates are expected to be high.  Bonds are basically a type of loan taken out by governments from private markets with a guaranteed amount to be paid back on a specified date (assuming the country issuing the bonds doesn't default like Greece did).  The amount of interest investors demand on the bonds is an indication of the risk - if they think there's a chance the bonds will be defaulted on then they will demand a higher percentage rate, just like a high street bank does based on peoples' credit ratings.

On Thursday, Spain and Italy (the other two bankrupt PIIGS countries) will issue their own bonds to try and raise cash and how well they do will depend on Portugal's bond issue on Wednesday.  The ECB will probably buy more Portuguese bonds (it's already been buying up Greek, Portuguese and Spanish bonds to try and encourage investors) but as the ECB is the central bank of the failing Eurozone, it's a mystery how they expect investors to be reassured by their purchase of potential toxic bonds from the bankrupt PIIGS countries using their own money!

The order of the fall of the PIIGS has already predicted - "Portugal, Spain and Italy will be next" - Portugal will be bailed out in the next couple of weeks and then Spain will follow shortly thereafter.  Or will it?  Can EU member states (or the IMF for that matter) afford the €250-300bn it will cost to bail out Spain?  Will Spain be the straw that breaks the kamel's rücken and leads to Germany pulling the plug on the Euro?

The EU's political elite will defend the Euro and the EU project to the bitter end but the money will run out soon and Germany has been lucky so far to have pretty much escaped the consequences of the collapse of two Eurozone economies.  Next time they might not be so lucky and when the impending collapse of the Euro starts to hit Germans in the pocket they will be out of it.

Bought and sold with leprechaun's gold

The Republic of Ireland has accepted an EU bailout of up to €100bn.

After literally days of feigning resistance, the Vichy Irish government have caved in to pressure from their puppet masters and agreed to hand over effective control of their economy to the European Empire in exchange for a cauldron of leprechaun's gold.

Not only will this EU bailout be part funded by the UK, but Boy George has offered a few billion pounds in contingency loans "to help a friend in need".  And here was me thinking we were on "the brink of bankruptcy".

The EU now controls the Greek economy and the Irish economy.  Portugal, Spain and Italy will be next and then what happens?  We can't afford to bail out the entire continent and the French and Germans certainly aren't in a position to, not when their economies are hobbled by EU regulations.