I don’t agree with the logic, that in order to repair the damage of one mistake we had to compound it by committing an even bigger mistake.
The deregulation and ensuing madness did create an economic monster but we did more than recapitalise pillar institutions, we bailed out utterly bankrupt ones too. There was no logical reason to do this, it was argued against by economists, and we in effect bailed out foreign investors, some that even bought in after the crash.
True, the EU forced us, in so much as you can only do something against your will if you agree to it, and as Maxi queries, who knows what would have happened if we refused, but seeing how intricately linked the banking systems are I assume France or Germany or an EU-wide solution would have been arrived at. We’ll never know.
The last I heard we pay upwards of €8 billion in interest annually on our sovereign debt, the vast majority of which is made up of the debts assumed from the banks.