The "Irish" bailout

Now that Ireland seems to have given in to demands to accept money from the Eurozone's “Emergency Fund” and the IMF and cries of “bailout” are sure to make the rounds again, let's see who is actually being bailed out. In Germany, where I am from, people like to grumble about profligate Greeks and now the Irish who are receiving “our” tax-money. In fact, a lot of the money will go to large European banks, who will be bailed out 100 Cents on the € on loans they have imprudently (or prudently, depending on your perspective) made to Ireland. A couple of days ago, Deutsche Bank CEO Josef Ackerman warned about the consequences of an Irish collapse, adding that “Europe is worth every price”. He would think so, wouldn't he? According to Peterson Institute via FT, Deutsche Bank has around a quarter of a Billion Euros worth of Irish sovereign debt on its balance sheet. At least Germans can take comfort in the fact that some of their money will “stay in the country”. With Portuguese debt, things are even more “win-win”. If Portugal has to ask for help, Germans will be able to redistribute € 1.6 Billion to WestLB and € 400 Million to Deutsche Bank. Truly great incentives in sovereign lending.