Sir, – Your story “European stocks pare losses” (Breaking News, December 21st) carried the quite astonishing piece of news that European banks had taken out loans of €490 billion from the European Central Bank and that these “ultra-cheap, long-term loans were designed to boost trust in banks, free up money markets and tempt banks to buy Italian and Spanish debt”.
A German economist is quoted as commenting: “It is highly unlikely now that banks in the euro zone will go bust because of a liquidity shortage.” It is obvious that once the lead states of the euro zone (Germany, France) took decisive action to consolidate the currency politically, the ECB fell into line and is now taking the necessary action. The more the euro zone is consolidated politically, the more the ECB will act as required (ultimately all the way to eurobonds). Without this political consolidation Michael Noonan’s “wall of money” could never be a realistic proposition. Now it is.
It is clearly in Ireland’s interest to participate wholeheartedly in this consolidation and not to squander this opportunity either by holding to our indefensible corporation tax rate or, as suggested in your Editorial (December 21st), working “to keep [the UK] at the negotiating table even if it lacks a vote there”. The political breakthrough only came after the exclusion from the process of the City of London. – Yours, etc,