Despite Fine Gael's commitment to a joint European approach to the problem of Ireland's debt burden, it has to be assumed that a) the absolute intransigent approach of Sarkozy/Merkel to the interest rate at last weeks' European Council and b) the fact that the latest recapitalisation requirements for the banks now looks to be closer to 25bn than 10bn, means that some sort of unilateral default action is increasingly likely.
This is turn would mean the end of the ELG scheme (either after it runs out on 30 June 2011 or before).
So what we would be left with would be the Deposit Guarantee Scheme for deposits up to 100k.
Is there any information on the total amount held in Irish banks, credit unions and post office that is covered under this scheme? Are there figures or estimates publibly available? In a situation of unilateral default, in which ECB and IMF lending would dry up immediately, would the State have access to sufficient funds to honour the guarantee? And, if not, what happens to the economy and people's day to day livelihood?
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