With more and more Irish people removing bank deposits to place money in various saving schemes at home and abroad, the fate of the euro continues to be threatened.
According to economist David McWilliam, speaking from Switzerland this week, the danger for the euro now emanates not only from Ireland, but mainly from other countries where citizens are rushing to stash their cash in foreign tax-free banks.
“People have decided they are not going to hang around to bail out Brian Lenihan and this is what happens in a banking crisis. First you have the professionals starting to withdraw their cash, next the corporate sector and then gradually the individual’s money leaves.
“Some Swiss bankers I have been meeting with tell me Italian money is flooding over the border into Switzerland, as is German money. The Irish deposits are small by comparison.
“The European Union is losing all this money and the Swiss bank figures indicate the level of the crisis. Spain and Italy are the big issue now, not ourselves, because Italy is low growth, with enormous public debt and private individuals who don’t trust their own government. If the euro keeps being discussed in these terms then money will keep going to Switzerland.”
Recent figures show that savings of around €97 billion are now estimated to be held in Irish banks for householders, while up to November 2010 €16 billion of private cash was pulled out of Irish bank accounts to be redirected into various savings accounts.
