In the wake of the stress test results, it is difficult to see how, as matters stand, Ireland’s inter-related banking and sovereign debt crisis can be resolved within the eurozone as it is presently constituted.
In the absence of decisive assistance from our European partners, Ireland is stumbling towards a default event. Indeed, it is already happening.
A ‘twin track’ Europe with Ireland in the outer track is now a very real prospect. The costs and consequences of such an event have already been modelled by authoritative analysts. Irish policy needs to adapt to this prospective reality.