Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
This whole foreign banks would lose is just a xenophobic talking point to distract the Irish from the responsibility of their own banks and government.

Merkel, already the largest contributor to the EU's rescue fund, must walk "a very thin line" as she tries to balance her pledge to do whatever is needed to save the euro with voter hostility to the bailouts, said Carsten Brzeski, an economist at ING Groep NV in Brussels. She also risks harming her country's banks by her insistence that bondholders take losses on future bailouts. German lenders hold more than 112 billion euros of debt issued by the governments of Greece, Ireland, Portugal, Spain and Italy, according to data compiled by Bloomberg.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Carrie (migeru at eurotrib dot com) on Sun Feb 6th, 2011 at 04:50:57 AM EST
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