Ireland’s Debt Floods The Global Economy

Economies around the world suffered losses to shares as a direct result of the Irish Republic’s debt crisis.

The weekend saw the troubled economy ask for a European Union-led bail-out after many months of refusal and apparent self-help methods. The amount required to lift such an ill economy out of complete financial crisis could total $122 billion (or 90 billion Euros) bringing its total deficit to a target of just 3%.

Banks in Ireland struggled with shares in Bank of Ireland slumping 24% while those in Allied Irish Bank fell by 16%.

Looking to share status’s around the world, the losses are evident. The UK’s FTSE 100 index was down 0.4%, while France’s Cac had lost 0.5%. Asian shares had earlier ended sharply lower, with Chinese stocks losing 2.4%.

In what is now seen as a likely event, the European Union is now bracing itself for an influx of other bail-out requests from a handful of troubled countries such as Spain and Portugal.

Vincent Chaigneau at Societe Generale comments,

“The market reaction to the rescue package was fairly positive, but the mood did not last.” He added, “Overall, the reaction to the rescue package was not quite what policy makers had hoped for. The rescue is seen as a salve but does little to fix the structural problems.”

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