Erikka Askeland: It is creditors who will decide if Ireland is another Dubai

A YEAR ago this week, the headlines were screaming that Dubai, that surrealist Arab playground on the Gulf, was on the verge of bankruptcy. The country's biggest company, Dubai World, had crossed its arms and announced that it could no longer make payments on its debt for at least six months.

But the dire predictions turned out not to be true after the emirate started work on a deal to pay everyone back eventually, including Royal Bank of Scotland and HSBC. A year later, Dubai is still here. Will it be the same for Ireland, or, when it comes right down to it, Europe?

It is the creditors - mainly European banks - that are worried about whether or not European countries can pay back their debt. This has resulted in the cost of that debt going sky high, at least for Ireland, Portugal, Spain and Belgium. It is now up to the EU to decide if it can afford to bail out its debt-laden countries until the crisis subsides.

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But Germany, whose word is still as good as its Bund when it comes to the markets, wants to ensure that any bail out mechanism its tax payers sign up for won't be too risky.

The safety belt on this would be asking investors to accept a "haircut" on the value of any future debt starting next year.

Of course this small print in the contract of the new bail-out deal would be popular with austerity-stricken voters, who wonder why the fat cat bond investors get their money back while their nation starves itself.

But the downside to this strategy is nobody in their right mind would make a loan to anyone who might not pay them back. It would be like turkeys voting for Christmas. Yet Europe is hoping they might agree a compromise which means that these governments don't default completely - which would be even worse for the bond holders.

Last night, creditors were terrified that the Irish banks were going to start telling a hard luck story to their lenders, offering them a debt for equity swap or an exchange offer. This is where the banks offer to buy back the debt at a value higher than their current market price but lower than the price they initially agreed to (in other words, the dreaded haircut).

But there are other options, which include paying back at a rate that is affordable over a longer period.

This is exactly what Dubai is currently doing in its negotiations with its lenders.But of course, as the country is essentially underwritten by the Dubai sovereign wealth fund - last estimate, worth $6bn - and possibly that of its neighbours, the even larger $875bn sovereign wealth fund of Abu Dhabi, investors reckon they are probably good for it.

The question now for Europe is whether the new bail out mechanism, the size and detail of which is being drawn up now, will be able to assuage investors worries just as well.

King of the turkeys would have been a star in the US

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WE ALL know now that rain on your wedding day is not ironic. But the death of Bernard Matthews, arguably the UK's most famous turkey farmer, on Thanksgiving Day is a much better example of the rhetorical trope.

Millions of Americans who stuffed themselves with turkey on Thursday won't be familiar with one of Norfolk's most famous sons, but they would like his story.

He started the business in 1950 with a 2.50 investment in 20 turkey eggs and a second-hand incubator, which he turned into a 330 million food giant 60 years later - the quintessential rags to riches story of legend.

His company even fought off the ignominy of having his Turkey Twizzlers product campaigned against by celebrity chef Jamie Oliver for being a symbol of all that was unwholesome in school dinners.

Although the company pulled the product from the school cafeteria, sales of the offending turkey-based products soared.

Like bond investors for haircuts, turkeys never vote for Christmas.

Yet most American and British families will choose to serve a roasted turkey this festive season because it feeds a horde inexpensively and it's tradition. Bernard Matthews capitalised on this brilliantly.