There is an interesting theory circulating in the British press that the ECB, that’s the European Central Bank, could actually have avoided any such bailout for Ireland had they simply lowered the unrealistic bar they had imposed on the Irish economy for output. Economic output is basically the amount a country produces for the world economy. The ECB is the one responsible for setting the standards for economic output according to each member of the EU. Ironically, however, there is absolutely no authority that supervises nor the policy, nor the decisions made by the bank itself.

In fact, some sources are pointing the finger at the ECB as originating a kind of economic disaster in Ireland that could easily have been avoided, had they only lowered interest rates on certain outstanding loans the Irish government has with the bank.

We must take into account the fact that just five years ago, the Irish economy was pumping out surpluses, while other member state governments were irresponsibly squandering public subsidies.

Now, as a result of the ECB’s bailout, the current 14.1% unemployment rate is expected to skyrocket, due to the damaging effect of using the C-word (crisis). The markets have already punished other member state countries, basing their decisions on information provided to them by the ECB. We call these “market rumours.”

The fact of the matter is that the ECB has established unrealistic expectations on growth in the EU. For starters, they base their projections for output in the Union assuming full-employment. If investors knew that this data reflects an unrealistic situation to begin with, they might have thought twice before punishing the markets.

Ireland, on the other hand, has been artificially attracting investors by offering below premium corporate taxes for foreign companies. It’s as if other more powerful economies in Europe, such as Germany and France, were actually looking to punish Ireland for taking away their business.

In Spain, for example, corporate taxes range from 32-35% depending on the autonomous community you live in. In Ireland, this percentage is exactly half that amount. No wonder the ECB wanted to spread rumours about the failing Irish economy. Maybe it wasn’t failing at all…but actually succeeding in offering more favourable conditions for business.

Once again, we see yet another example of the absence of the concept of balance of powers in the EU, and let’s not forget, a judicial system to protect the enforcement of the EU Charter.