The vast, vast majority of the Irish government debt is illegitimate, taken on in the process of bailing out insolvent German banks. The fact that legitimate Irish debt exists does not change the fact that the vast, vast majority of the Irish debt is not legitimate.

Unfortunately, what with sovereign debt being fungible, it is not necessarily possible or meaningful to annul the bonds that were used in the bailout. So you will have to annul an equivalent amount and let the bondholders who are least important to the Irish (and European) economy take the hit first. In the greater scheme of things, the result is almost the same. Yes, a Landesbank here or there is going to take an unfair hit, and an oligarch or two is going to keep a nest egg squirreled away in Lichtenstein. Take that up with DeutcheBank and the ECB, who pressured Ireland to honour the insane guarantee. If Ireland had defaulted on the guarantee instead of defaulting on its debt, the default would have been targeted much more narrowly at the guilty parties.

But that was then and this is now.

- Jake

Friends come and go. Enemies accumulate.