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Editor and columnist at the Financial Times Wolfgang Münchau has called the Irish guarantee of its banking sector, “one of the most catastrophic political decision [sic] taken in post-war Europe,” in a piece for Euro Intelligence.Münchau calls out the decision on the grounds that the rest of Europe followed suit, but didn’t do anything to prepare themselves for the aftermath. Instead of letting some of the bank’s bondholders take a hit, the state has taken on all the problems of the banks.
The idea of default has been left behind too, and that’s going to cost state’s like Ireland and Greece growth for 5, maybe 10 years according to Münchau.
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