The bank guarantee was never going to be enough. Inevitably hard cash would be needed to recapitalise the banks. Add that to the budget deficit and Irish taxpayers will end up having borrowed over EUR20 billion in the space of a few months. That money has to be repaid even if part of it comes from the National Pensions Reserve Fund. Investors in Irish Government debt aren't stupid and will charge a lot more for the risk they're taking on. Talk of recouping our investment through bank dividends, a recovery in their share price and an economic bounce replenishing State coffers in 2010 is wishful thinking. Until property prices stop falling, jobs stop imploding and credit markets normalise we simply won't know the scale of the bad debt write offs the taxpayer is expected to underwrite. It's much more likely that we'll be saddled with these extraordinary national borrowing costs through taxes and lower Government spending for many years to come and next year's budget is likely to add more pain.

So far the big banks have played the Government like a salmon. They've got the guarantee but have continued to starve businesses of the lifeblood of normal credit. Worse still are the comments from banking dinosaurs that it's business as usual and they don't need fresh capital. That's coded language for;

-Get stuffed we'll manage this by setting up credit soup kitchens and doling out the thinnest loans possible to protect our capital, prestige and bonuses.

The Government needs to start kicking butts. Fresh capital must come with a clean out of the dinosaurs and a replacement with bankers prepared to turn on the taps again and set up special lending units to support businesses. But, remember even if everything is done right,  proper recapitalisation, European interest rate cuts and stimulus packages throughout leading economies, two big problems remain;

Firstly the Irish Government is still afraid to confront public sector unions with the truth.

- The truth is we can't afford the pay bill or the recent hike.

-Pay will have to be cut for higher earners otherwise we're off the hell in a hand basket.

Secondly consumer confidence is shot to pieces from the shock of the banking crisis. Cheaper borrowing rates will not be enough to avoid the natural instinct to save and not spend. That will need;

-Time to heal

-An Irish economic stimulus package to replace the incompetent budget

-Restoration of belief in our Government leadership.

Fianna Fail need to seriously consider the earliest possible leadership change if they want to avoid a wipe out in next year's local and European elections. Trust and confidence has to be restored if consumers are expected to come back out spending. There is no confidence in the triumvirate running this Government and the longer remedial action is not taken the worse it's simply going to get. Just ask anyone running a small business including Fianna Fail supporters aghast at how out of touch the party elite became.

Eddie's Recession tip

No need to rush into booking next year's hols. Travel firms will be busting a gut to sell holiday packages into a recessionary minded market. Expect once in a lifetime offers and super weekends away from top Irish hotels and spas, desperate for footfall. So if you've a romantic weekend planned you'll be spoiled for choice.