With so many people talking from so many different angles on the Irish banking and financial industry it is hard to tell what all the hype means. This becomes increasingly important going into a year in which some feel the housing market is nearing the bottom of the curve and cash is being injected into the Irish economy like an intravenous drip. With the EU going all in on the heels of Greece’s bailout early this year Ireland is under increasing pressure to cut their deficient to around 3% in the coming years. The question that this raises though is the same for every domestic household in every corner of the world… where is the money going to come from? I every household, in every country you really only have two options to balance the budget, spend less or earn more.

For Ireland this becomes a balancing act of protecting the precious income that comes in from foreign entities attracted by lower than average corporate taxes and protecting the very population that threatens to offer a change of government as early as this March. To complicate this the EU is going to discontinue funding in 2013, leaving Ireland to fix its own capital issues and raise its own money (most notably at a higher and higher rate at each successive bail out from each lender). It has been mentioned more than once that this is not a unique problem, as several monetary funds have been created and there is an expected 24 billion dollars ready to be shelled out to cover short term lending issues. But like any household, where is the money coming from, and who are we going to have to ask when the funds run dry? Many have mentioned that the existence of these “bail out” funds encourages credit heavy wild lending that sets a country up for failure knowing that there is a safety net in the event that they cannot pay.

But where does the bailout end, who must be the “father figure” that exercises financial responsibility that provides a stable base for those that should be taking risks. A business should be allowed to take appropriate risks through access to secure capital. The underlying bank should be taking less risk to assure that they can be a bedrock for the appropriate businesses that can drive the economic engine. If the EU stops providing the fiscally responsible access to capital and the national banks have not more discretion than a start-up then what happens when the money runs out? As a company grows , so does a government and the higher levels of the organization have a responsibility to provide for those at the lower levels to go after the big gains.