The Pluck of the Irish et al: Europe ? Bail Us Out!
European leaders met in Brussels late last week following a $112 billion bailout of Ireland and amid escalating financial market concerns about both Portugal and Spain. Despite calls by some European officials for bold new initiatives to stem the spreading euro crisis, the leaders essentially kicked the can down the road.
“They are inviting the markets to test them,” said Desmond Lachman, a resident fellow at the American Enterprise Institute in Washington.
And this testing could come early next year. Within a few months, Lisbon and Madrid will need to roll over tens of billions of euros in government debt – meaning issuing new bonds to pay for the redemption of maturing securities. Ireland holds a parliamentary election Feb. 25. Heated rhetoric in the run-up to that vote is likely to raise new doubts about Dublin’s willingness to go through with promised belt-tightening. And by March a new European bank stress test could create new doubts about the health of European financial institutions.