Ireland Goes Bust

[Peter Lemkin]

Its the Capitalism, stupid! Democratic Socialism with more than a touch of classical Anarchy, for me, thanks.:alberteinstein:

[Magda Hassan]

Explains nicely why the UK is loaning the money to Ireland

Sphincter-nomics


Headline in the FT this morning, "Europe signs up to Irish rescue." That is how the financial class would like you to see it. A more accurate description is "Europe signs up to use Ireland as a conduit for bailing out its own banks and gets Irish tax payers to foot the bill." [my bolding]

Less catchy I admit. But a great deal more accurate.

Back in June of this year I wrote this.

Basically it boils down to this. The system of finance, globally, must lower its level of indebtedness. The obvious place is bank bad debts. That has been ruled out by the financial class via our oh so compliant politicians. The other way to lose indebtedness is to use a country or countries as a conduit for debt reduction - a sphincter through which to shit out as much debt pressure as possible. Ireland is already in that ignominious position.

And so it has come to pass for Ireland. European and UK banks are now going to use Ireland as their sphincter. And the Irish people are going to clean it up for them. Ably volunteered for the job by their loyal political class. Loyal to who and what is another question.

We, the people of these various countries need now to be very careful.

Over the next few weeks we are going to be treated to a carefully incubated efflorescence of xenophobic bile and blame throwing. As tabloid papers in every nation try to whip up ill feeling and blame into an obscuring fog of ethnic bigotry whose main purpose will be to hide the bankers, of all our nations, pissing themselves with glee.

The British are being told "we" are going to help Ireland to the tune of €7 billion. Which, we are quickly assured we expect back. No doubt the "Why should we pay" squad will be roused from their easy chairs to fart out some ethnically oriented observation. But the truth is "we" are not helping the Irish, nor even the Irish banks. "We" will be stumping up the cash to 'help' UK banks. RBS being one of those near the front of the queue. We will 'give' money to the Irish banks who will promptly give back most of it to the British banks to whom they owe the money. And the Irish people will find themselves charged interest for having facilitated this bail out. THAT is what is happening.

Let's all be careful and clear about this. Irish banks are being used as a sphincter to for European bank debts. European and British banks are horribly exposed to to Irish debt. Which means, when translated into English, that private banks in many countries lent money into the well known Irish property bubble in order to chase high returns during the bubble years. Irish private banks accepted the money in order to lend unwisely so they too could chase high returns. Entirely PRIVATE contracts between two sets of equally greedy bankers.

There is nothing in those contracts that pertains to or involves the people of any of our nations. And yet all our bankers with the connivance of all our politicians are engineering things so that we ALL pay the bankers' private debts.

The Irish people have not bankrupted Germany's banks. German banks in partnership with Irish banks and the Irish 'regulator' (to abuse the word yet again) bankrupted Germany's banks through deals the German banks were delighted to make. British banks have left themselves with massive unpaid loans to Irish banks. Neither the British nor the Irish people had any say in the idiot deals done.

This IS NOT people against people. We, all the peoples of all these nations, are being forced to pay off all the banks. It may seem that German and British tax payers are bailing our 'the Irish', but it is not true. We are bailing out OUR own banks through Ireland. And the greatest losers will be the Irish people because they are the orifice through which we are going to squeeze the bankers present to us all. http://golemxiv-credo.blogspot.com/2010/...omics.html

[David Guyatt]

A very thoughtful and illuminating peek behind the curtain. This will not, I guarantee, be reflected by any MSM, who are only too delighted to double-speak the heavily sanitized perspective churned out by governments and elite think tanks.

[Mark Stapleton]

The Irish won't pay the price. Those who can leave will leave.

There's only 4 and a half million people there now. Unless the banks forgive the debt it will be a West European ghost town in a few years.

[Peter Lemkin]

Banks never forget debt...they invent it when it 'ain't there! I guess a new migration from Ireland is about to commence....anyone read The Poor Mouth by Fann 'O Brian?.....suggest it highly. [My #2 to James Joyce - and the only other J.J. really extolled about]. This time I don't think they'll go to the USA and become cops....perhaps to Poland [oh, the irony] to dig ditches.....the banks are bitches and the sooner we get rid of them forever, the better for human survival...not just for the Irish!...but for humankind!

[Magda Hassan]

Don't bail out Ireland, free it

Our billions will prolong the misery. Better for the Irish to quit the euro and default on their debts

• 
  
• • Douglas Carswell
    
  • guardian.co.uk, Tuesday 23 November 2010 21.30 GMT
    
  Britain has just promised £7bn towards a €90bn package aimed at rescuing Ireland's economy. But the bailout has not worked. Instead, we are sinking billions into a temporary rescue of the euro that will prolong Ireland's economic misery. So we should change course and prepare to offer a dramatically different solution – help Ireland decouple from the euro and allow the country to default on its debts.
  A prosperous Ireland is in Britain's interest, as the chancellor, George Osborne, was quick to tell the House of Commons. It is not simply a case of economics. There is scarcely a street in Britain in which family ties do not bind the fate of our two islands. It is precisely because we want to see Ireland prosper that we should help it escape from the euro. It was euro membership, with ruinously low interest rates for more than a decade, that plunged Ireland into the economic abyss. Diehard euro advocates might ignore reality, but if Ireland had had interest rates set according to the needs of the Irish economy rather than a wider eurozone, it would not be in this credit-fuelled mess today.
  For all the fanfare, the bailout has not reduced the amount Ireland owes by a single euro. Rather, it has seen Ireland accept more debt. Ireland has now gone beyond the point at which it can pay back what it owes. The country can either spend miserable years trapped in debt, with high taxes and higher emigration, or it can decouple from the euro – and default.
  Decouple and default works. Remember how the political elite in Argentina, as in Ireland, pegged their own currency to another? Yet when the peso was decoupled from the dollar and Argentina defaulted in 2002, it was free to grow again. Argentina has been chugging along at an enviable 7% to 8% annual growth each year since.
  Defaulting on its debts – impossible while Ireland remains in the euro – could follow if it were to decouple. While no one would ever then want to lend Ireland such mountains of money again, would that be such a bad thing?
  What is certain is that as long as Ireland remains in the euro, its economic anguish will not end. Unable to devalue, Ireland will never become properly competitive – unless it suffers a dramatic fall in wealth. Yet a collapse in Irish wages is the inevitable outcome of the policy being pursued on both sides of the Irish Sea. How can that be in the interests of either us, or our closest neighbour?
  Britain faces a time of unprecedented austerity. Yet many of the savings we have made in public services have now been soaked up by our massive contribution to bailing out the euro. Failure to bail out Ireland, some say, would place British banks in difficulty. But it is precisely because our banks are not out of the woods that we should keep any spare billions we have, for what still lurks on their balance sheets.
  And the Irish bailout is also drawing us into potentially unlimited eurozone debt liabilities – in effect, it makes Britain a member of the euro as a debt union. Despite Osborne's best efforts to present it as an act of neighbourly goodwill, Britain had little choice but to cough up. Article 122 of the Lisbon treaty means we will have to hand over billions through the European Stabilisation Mechanism. Even if the chancellor were to say "no", the council of ministers would quickly overrule him. Thanks to the small print of our existing treaty obligations, should Portugal, Spain, or even Italy now seek a bailout, our potential liabilities would be unlimited.
  Britain is discovering that it has been drawn into a long line of euro "debt dominoes", each one at risk from any of the others falling. Allowing the break-up of the euro could prove less ruinous than paying to keep everybody in line.
  
  

[Magda Hassan]

A nice clear call to arms by Jim Corrs. I wonder how it will go?
http://www.youtube.com/watch?v=Ing8xH3Qj...r_embedded

[Jan Klimkowski]

From Zero Hedge and Irish media sources:

Not All PIIGS Are Created Equal:
Irish Bail Out Package To Come With 6.7% Interest Tag, 1.5% Higher Than Greece

Submitted by Tyler Durden on 11/26/2010 18:39 -0500

RTE reports that the IMF/EU Irish rescue package will come with a whopping 6.7% rate for nine year money. Per the RTE article, it is unclear if that will be an APR or some multi-year blended effective annual yield: "The Government's four year plan assumes that by 2014, interest payments will have increased from €2.5 billion to €8.4 billion a year - around one fifth of all tax revenue." Regardles of how it is calculated, newspaper tomorrow will be blasting the 6.7% number, which is 150 bps wide of what Greece is paying on backstopped paper, and will only create further resentment at the fact that not only is Europe split into a core and PIIGS, but that it is now apparent that not all PIIGS are treated as equals. How Irish citizens will react once they find out that the EU believes they are less creditworthy than even the Greeks, only the IRA can predict.

From RTE:

It is understood that the Taoiseach, the Minister for Finance, the heads of the Central Bank, the NTMA and senior officials met in Government Buildings for several hours this evening to discuss the details of negotiations with the EU and the IMF.

It is believed that contacts will resume tomorrow.

Fine Gael Finance Spokesman Michael Noonan said the suggestion of a 6.7% rate was very disturbing.

He said the Government must not abandon the national interest and settle on unaffordable terms in its negotiations.

Earlier, leaders of the Irish Congress of Trade Unions finished discussions on the country's debt crisis with the EU/IMF delegation in Dublin.

And also in the RTE we read of a guaranteed harbinger of what is to come for the ruling party, a Sinn Fein representative won a by-election in Donegal: the same opposition party which has branded the current administration in Ireland as traitors.

Pearse Doherty has been elected in the Donegal South West by-election to fill the Dáil seat vacated by MEP Pat The Cope Gallagher.

He was elected after the fourth count without reaching the quota. Fine Gael's Brian O'Neill came second with Fianna Fáil's Brian Ó'Domhall in third place. The total valid poll was 34,424 and the quota is 17,213.

Mr Doherty got the highest number of first preference votes with 13,719 in the first count.

He described the election as, 'the by-election the Government never wanted to happen' adding that 'the result tells us why'.

Speaking after the result was announced, Mr Doherty said the vote was a rejection of the interference of the IMF in Irish affairs and said he would be voting against the Budget on 7 December.

Update: Irish Times is quick to quell the public fury by reporting that while it has no clue what the interest rate will be, a "source" has said it will be lower than the 6.7%. In other words, just like the Greek bailout package started at $500 billion early in the day on that fateful Sunday in May only to progress to $1 trillion based on the futures reaction, so the IMF now will likely determine just what the final interest rate on the rescue loan will be based on the degree of public mauling of various elected officials over the weekend. Mere cuts and lacerations should be sufficient for 6%, broken bones: 5.75%, 3rd degree concussions: 5.5%, getting someone drawn and quartered may just leave Ireland to borrow on the same terms as 3 month US T-Bills.

The interest rate for a nine-year EU/IMF loan would be lower than the 6.7 per cent being quoted in some reports today, a source involved in the talks has indicated.

The source said the interest rate was still under negotiation but would not be that high.

The loan of €85 billion would come from a number of different funds, some controlled by European Union institutions, others by the IMF. It is understood that the interest rate for the IMF portion of the loan will be in the region of 4.5 per cent, while the interest charged by EU bodies will be considerably higher.

The source accepted that the average interest rate was likely to be higher than the 5.2 per cent charged to Greece when it was bailed out earlier this year. But it was pointed out that the Greek loan was for a period of only three years.

Higher rates of interest are attached to longer loans and the nine-year loan being negotiated on behalf of the State will involve a higher interest rate, as the risk of default is considered to be higher.

Officials in the EU-IMF mission to Dublin are examining how senior bondholders could be compelled to pay some of the cost of rescuing Ireland’s banks.

http://www.zerohedge.com/article/not-all...her-greece

[David Guyatt]

I just heard this on the radio. It would be cheaper for Ireland to default, according to a number of pundits.

[Keith Millea]

A nice clear call to arms by Jim Corrs. I wonder how it will go?
http://www.youtube.com/watch?v=Ing8xH3Qj...r_embedded

Whoever Jim Corrs is,his message is strong and more importantly very clear.

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