The World from Berlin: 'The Irish Should Stop Bashing Those Who Want to Help Them'

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The business daily Handelsblatt writes:

"The fact that the euro zone still cannot calm the markets has partly to do with the its self-deception. Regardless of whether it is the governments, the European Central Bank or the European Commission, none have become honest yet about the way they have handled the crisis. They won't admit that, firstly, the euro zone will not be able to master the crisis without a haircut: Greece, Portugal and now Ireland have to be given some debt relief. Loans from the European rescue fund will not replace this debt relief but only delay it. The countries that receive the loans from the euro zone and the IMF will have to pay them back. Greece cannot do that by any stretch of the imagination. Those who are making the decisions in the euro zone know this, they just don't want to admit it."

"Secondly, it is not just the Irish banks that are dramatically undercapitalized, but also the British and German banks. Things wouldn't be going so bad for the government in Dublin today if they had allowed one or two bank insolvencies. However, bankrupt Irish banks would have dragged other financial institutions into the abyss with them. British, German and French banks would have had to face losses in the triple-billion figures in Ireland."

"So Ireland had to safeguard its banks with state guarantees, with the active help of the ECB. In that way the Irish, British and German banks, and their shareholders, were able to pass off the debt problems onto the Irish state. But the taxpayers of this small country are hopelessly overwhelmed by this."

"Ireland's European partners have known about this, approved of it and perhaps even encouraged it. And the euro zone will soon be presented with the bill. Ireland will definitely need loans from the €750 billion rescue fund -- regardless of whether it applies for help this week or later. That will only remove Ireland temporarily from the firing line of the markets. And the euro zone is still not saved. The markets could then fully concentrate on Portugal and Spain."

"The shareholders in the banks will be pleased to be protected from the losses. But for the euro zone's taxpayers this is all a catastrophe."

The Financial Times Deutschland writes:

"The EU has once again sold a short-term PR offensive as a solution to a problem and has been caught out. The fact is that Greece, Ireland and probably Portugal are insolvent. And another fact is that the euro zone is strongly connected. German banks, insurance companies and funds are among Ireland's biggest creditors. And if the German government is now pushing Ireland to apply to the rescue fund as soon as possible, then it is out of pure self interest. They want to protect German banks from losses."

"And everyone, the Irish and the Germans, are pushing the bill onto the taxpayers. The markets recognize that the taxpayers are unable to cope with this bill and this has lead to rational corrections to the value of state bonds."

"One should finally face the truth and confront the looming insolvency of Greece and Ireland. ... Accepting reality means accepting insolvency and solving the problem. And there are, in principle, two choices: Either leaving the euro zone with a view to re-entering later or a managed insolvency. The later will be the preferred solution, politically and economically."

The center-right Frankfurter Allgemeine Zeitung writes:

"If the euro fails, Europe fails, that was Chancellor Merkel's depressing prediction and now Van Rompuy has echoed those sentiments: The EU is in a fight for survival due to the debt crisis of some euro states. ... The euro, which was supposed to make European integration 'irreversible' could become its undertaker. ... If the currency union were to fail, then the economic and political costs would be enormous. We should all be concerned about the historic consequences."

The conservative Die Welt writes:

"The unthinkable has happened. The euro, the common currency and pride of the Europeans, is suspiciously close to the abyss."

"Europe is in the deepest crisis since its foundation. The community began as a project for peace and reconciliation. Its credo was: The whole is more important than the individual country. Little remains of that sentiment. The EU of today is like a club of 27 egotists, that are somehow connected through technocratic procedures and the competition for the biggest slice of the European wealth cake. Europe is exhausted. It lacks strength, ideas, a common purpose and an indentity."

"It could only come to this because the EU elites have failed for years and have not met their responsibilities. The debt mountains and the serious breaches of simple economic rules could only have occurred as a result of selfish calculation on the part of EU member state governments."

"Now decisiveness, solidarity and political leadership are required. A politics of business as usual has slammed up against the wall. But will the politicians be able to change their spots?"

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• Part 1: 'The Irish Should Stop Bashing Those Who Want to Help Them'
• Part 2: 'The Unthinkable Has Happened'