International Finance Course

Ireland

A sulky day in a small moist village in the depths of Ireland.
There is a pouring rain and the streets are deserted.
Tough times, the country is heavily indebted, everyone lives on credit.

Arrives a rich German tourist. He stops his beautiful big car in front of the only hotel in the city and he enters.

He puts a 200 euro banknote on the counter and asks to see the rooms available in order to choose one for the night.

For 200 euros, the owner of the establishment gives him all the keys and tells him to choose the one that pleases him.

As soon as the tourist disappears on the stairs, the innkeeper takes the 200 euro note, goes to the neighboring butcher and settles the debt he owes to the latter.

The butcher goes immediately to the pig breeder to whom he owes 200 Euros and refunds his debt.

The farmer, in his turn, hastened to pay his bill to the agricultural cooperative, where he replenished feeding stuff for the cattle.

The manager of the cooperative rushes to the pub to adjust his slate.

The barman slips the ticket to the prostitute who has provided her services on credit for a while.

The prostitute, who occupies on credit the rooms of the hotel with her clients, runs to pay the bill to our innkeeper who puts the ticket on the counter, where the tourist had put it before.

The German tourist goes downstairs, announces that he does not find the rooms to his taste, picks up his banknote and goes away!

Nobody produced anything...
Nobody has won anything...
But no one is in debt!

This is exactly how rescue plans work for troubled countries. No need to study economics or political science to understand the system.