The whirlwind that is hitting Ireland may feel like the kind of crisis that nobody could have anticipated. In fact, in the years that I lived in Brussels (between 2000-2005), I did have occasional conversations with EU officials about what would happen if a member of the euro-zone ran into financial difficulties and had to be bailed out by the other members.
Reading the news of the Irish bail-out this morning, one particular conversation came to mind. I was talking to a friend at the commission about the prospect that Portugal would run out of money. (At the time they seemed like the front-runners in the insolvency stakes, with Ireland not even regarded as a runner.) My commission friend, a German as it happens, said that the Portuguese would then have to borrow from the rest of Europe. He added with a grim smile – “And then Portugal will become a colony of Brussels.” Read more