In his Irish Times article today, Collims contrasts the current situation in Cyprus with our own banking crisis in 2008 and what might have happened here:
I'm not always a fan of Collins, and as per usual his article contains a blanket defence of the EU, but I think he has a point here. I've always been dubious about the point of view that all our problems lead back to that night in September 2008. The rot set in earlier, with wildly pro-cyclical policies of tax cutting, spending increases and relentless priming of the building boom. Whatever decision Lenihan and Cowen could have made that night would have had very unpleasant repercussions, and it may well be that they chose the least worst option. We will never know for sure. But it was notable to hear Eamonn Gilmore on the Six One News last night, who had been so noisily critical of the previous governmemt's policies in opposition, contrasting them favourably with the approach taken by the Cypriot authorities.The Irish politicians and pundits who denounced the bailout at every step and called on the Government to defy theEurope an Central Bank are now seeing what can happen to a small country whose politicians engage in populist posturing instead of facing up to responsibilities.
After days of scaremongering by some high-profile broadcasters there were fears that panic was about to break out. One of the things the Government considered on the night of the guarantee was the kind of security response that might be required if disorderly crowds began to gather at banks and ATM machines trying to withdraw their money the following morning.
Thankfully that didn’t happen but it was probably a close-run thing. The independent banking inquiry that reported in March 2011 pointed out that all of the possible policy alternatives facing the Government in September 2008 were fraught with risk and the time for decision-making was very short. “Increasingly the main issue at hand was seen as ensuring market financing for the banks at the beginning of the next day; making sure that Ireland was open for business in the morning . . . It represented on balance the ‘least bad’ option to address the immediate problem.”
Cypriot drama puts Ireland