Via Calculated Risk, tomorrow the Irish Finance Minister will explain, somehow, what Ireland's government will do with the €90 bn in real estate loans now crippling the country's economy:
In what may be the biggest financial gamble in 87 years as a sovereign state, the government will become the owner of loans for property developments that have plunged in value.
Ireland is suffering the worst economic slump of any developed nation since the Great Depression, according to the Economic & Social Research Institute in Dublin.
The National Asset Management Agency, known as NAMA, will buy 18,000 loans at a discount from lenders led by Allied Irish Banks Plc and Bank of Ireland Plc. The agency will manage the loans, which amount to about half of Ireland’s gross domestic product. Should any of the 1,500 borrowers default, the agency can seize the land or other security put up.
(Emphasis mine.)
To put that in perspective, imagine if the U.S. government took over $8.5 trillion in loans. That's the equivalent.