DUBLIN, Ireland — After the binge of the "Celtic Tiger" years, Ireland has been jolted awake with the mother of all hangovers, an empty wallet and a horrendous bill.
On Thursday the government shocked a bewildered nation with the disclosure that the final cost of bailing out the Irish banks could rise to 50 billion euros ($69 billion). This is much more than previously admitted, and the impact on the country and the population of nearly 5 million has quickly became apparent.
The bailout will cost every man, woman and child in the republic 10,000 euros. Ireland will have to endure savage cuts in expenditure. There will be hair-shirt budgets for at least four years. And the Emerald Isle, warned the European Union, can now no longer remain a low-tax economy.
Finance Minister Brian Lenihan agreed the figures were “horrendous," but said they "can be managed over a 10-year period.”
The reaction of the media in Dublin and the world’s financial capitals was pretty uniform: Ireland’s Celtic Tiger is dead.
The Celtic Tiger Is Dead. Long Live The Hungover Pussycat.
Near us? It is us.
[...] The calamity in Ireland is the result of reckless lending by its banks during a boom that ended in 2007, and which, as property prices plunge, has become one of the biggest busts in history.
The cost of winding down Anglo Irish bank alone is estimated at 34 billion euros. Its directors lent outrageous sums to developers to buy sites and acquire properties that in many cases have become entirely worthless.
Even more shocking for a country where the banks were seen as solid pillars of the national infrastructure, one of the two biggest financial institutions, Allied Irish Banks, was practically nationalized with an injection of 3 billion euros and the brusque removal of its chairman and managing director on Thursday.