Chapter 74 THE CAVALRY TO THE RESCUE
t was Sunday evening when a BBC news flash announced that European
Finance ministers had approved an assistance package’ for Ireland.
‘Well that’ll get Cowen off the hook,’ said Kennedy half pleased and half
sarcastic.
‘Don’t be too sure Pat.’
The two men were watching TV in company of Sergei Tarasov in his
Knightsbridge home where they had just finished a workout in his gym before
drinks and diner.
A newsreader confirmed the British government would also throw in a bilateral
loan.
I
‘That’s not going to please the Brits,’ said Tarasov with a smirk. He together with
the two Irishmen enjoyed an unspoken conspiracy against everything that was
British. A kind a kind of schadenfreude, as the UK’s difficulties grew.
The conditions would be severe, but the existing 12.5% Irish corporation tax rate,
a corner stone of Irish industrial policy, would remain untouched, to the relief of
many investors.
Markets had reacted badly to the news and European stocks retreated. Ireland’s
belated request for a bailout had failed to convince investors that the Eurozone
sovereign-debt crisis was over.
The end of Ireland’s adventure as a banking and financial centre came to an end
after the prime minster announced, ‘Irish banks will become significantly smaller
than they were in the past.’
Fitzwilliams grudgingly admitted it was thanks to Kennedy’s initiative the bank
had undergone its transformation, from a relatively modest Irish bank to an
international banking group with its headquarters in London and branches in
Amsterdam, Moscow and Dublin.
As Fitzwilliams congratulated himself on his good fortune, British banks
trembled as they looked across the sea from their plush boardrooms. Their banking
loans to Ireland, Greece, Spain, Portugal and Italy were colossal, exceeding three
hundred billion pounds sterling, with the nationalized Royal Bank of Scotland
holding a big chunk of that. If the Eurozone crisis was not resolved the whole
system could collapse dragging the UK down with it.
‘Goldman Sachs estimates Ireland’s exposure at almost three hundred billion
euros,’ said Tarasov almost gloatingly.
‘As far as I’m concerned the bag of worms was beyond the capacity of Biffo’s
government to resolve, or any other feckin government’s at that matter,’
Fitzwilliams grimly noted.
Kennedy had lost interest and was thumbing through a copy of the Irish Times.
‘Look at this will ya?’
He enjoyed scanning the dailies and picking out choicy morsels of news reading
them out loud to all who cared to listen.
‘Tell us Pat,’ said Fitzwilliams hoping for some light relief.
‘It’s great when Paddy Power, this yoke, a feckin bookmaker, becomes the eighth
largest company in the country, just as the Bank of Ireland, founded by the way in
1783, goes bust.’
‘The BOI made a lot of bad bets Pat, just like all those property developers.’
‘Well they’ll all have to sell their jets, yachts and Rollers now,’ said Tarasov
glancing over his shoulder.
‘Don’t talk too quick, if it continues like this we’ll all be in trouble.’
Ireland’s problem, on the admission of its minister of finance, had become too big
for the country to resolve on its own. It was the re-capitalisation of the banks that
hurt, and especially that of the now nationalized Bank of Ireland, after foreign
depositors had rushed to pull their money out.
