Who Wants to Bail Out Ireland?

I'm glad that I'm not footing this bill:
Ireland’s ailing banks need another €24 billion ($34 billion) in cash in a move that will leave all of them under state control and facing a complete overhaul, officials announced Thursday in a long-awaited effort to cap a 3-year banking crisis.
The Central Bank of Ireland made that recommendation as it published pessimistic results for stress tests on four banks. The banks, whose losses the government insured early during the financial crisis, caused Ireland to need a bailout in the first place, so their fate is closely tied with that of the wider country.
The tests presumed that the country’s real estate market would keep sinking for the next two years and produce tens of thousands of home foreclosures, a problem that is just starting to bite in a country committed to the idea of home ownership for all.
Central Bank Governor Patrick Honohan said all four banks would need enough money to cover mammoth write-offs of dud property loans and to boost their cash reserves to higher standards. He said these cash requirements can’t be met by any of the banks, so each will have to receive funding from Ireland’s emergency European Union-International Monetary Fund credit line.
Do you adopt a hard-line "let them fail" approach? That might sell politically in the United States, but it won't sell in Europe. It would go a long ways towards fixing Ireland's problems in the long term, but it would cause a great deal of social unrest in the short term. I don't care how polite your society--when you throw several hundred thousand people out of their homes, it destabilizes things to a tremendous degree and adds hidden costs to day to day life.

Somehow, some way, they'll get their money, they'll pour it down that massive drain, and it'll do, what, exactly? Will it solve the problem? Or will it help drive more and more of the economic have-nots in the Eurozone further and further away from the Germans, who are probably wondering why they didn't bail on the euro last year?

The Irish created a massive housing bubble, and now their four reeling, broken banks are on the hook for properties that aren't worth much. I would watch what happens. If someone can find a creative way to inject that money into those banks and make them healthy again, it would go a long ways towards understanding how to mitigate these problems in the future.

I also think the Irish are serious about banking reform. The United States has never seriously tackled banking reform, at least, not since the Great Depression.

I have a simple solution, however. Don't create a massive housing bubble and expect to survive when it collapses.
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