The proposed Irish bail-out has not calmed the financial markets. And now their attention is moving on to new victims in the Iberian peninsula
Only hours after European leaders have discussed about the bail-out from the EU and the IMF that may measured to $115b. Right after the European leaders devised a rescue solution to deviate from the debt crisis, experts had presented “we think the euro will go down still further”
Their skepticism may be reflected since their unreliability about the euro zone including from Greece to at last Germany. They are worrying the close relationship around euro-zone. In the past, the Greece has gotten the bail-out from the EU and the IMF, in the mean time, the Ireland has been arising as another severe deficit country to be needed.
The most fearful thing is the statue of the euro. The questions are remaining and much more appearing in the financial market. “Will Ireland’s bailout end the euro crisis?” The financial market does not agree that the Irish is not rescued finally the end of the chaotic instability and the investor’s confidence are not recovered over the zone’s future. Europe’s leaders are dealing with only one part of a bigger problem, and only when their backs are against the wall.
In the very nature of EU’s bailout scheme, there are two things here. First, the success of the bailout will depend on the ability of Ireland’s government to impose incredibly severe budget cuts, demanded by its Euro-zone pals in return for the rescue funds. Second, the bailout of Ireland, as with Greece, does nothing to help the economy out of its crisis, aside from preventing an outright default.
In short, the entire bailout mechanism articulated by the EU leaves too many questions unanswered, and thus will keep financial markets nervously.