Ireland Goes Bust

[Magda Hassan]

He is one part of an Irish music group called The Corrs.
http://www.thecorrswebsite.com/index2.htm
http://en.wikipedia.org/wiki/The_Corrs

[Keith Millea]

Published on Saturday, November 27, 2010 by The Guardian/UK Thousands Protest Against Irish Bailout

Henry McDonald - Dublin


More than 100,000 Irish citizens took to the streets of Dublin today to protest against the international bailout and four years of austerity.

Thousands of demonstrators march through Dublin to protest against budget cuts and an EU-IMF bailout. (Photograph: Peter Morrison/AP)

Despite overnight snow storms and freezing temperatures, huge crowds have gathered in O'Connell Street to demonstrate against the cuts aimed at driving down Ireland's colossal national debt.
So far the march has passed off peacefully although there is a huge Garda presence with up to 700 officers on duty working alongside 250 security guards for the Irish Congress of Trade Unions.

Among the marchers there is deep anger that most of the more than €80bn (£67bn) from the EU and the International Monetary Fund will be given to shore up Ireland's ailing banks.

Marching in the rally was Irish builder Mick Wallace who has had to lay off 100 workers due to the crash in the construction industry. Wallace said it was time the Irish became more militant.
"We should be more like the French and get onto the streets more often. Because our politicians go over to Europe and tell the EU that our people do not demonstrate, they don't take to the streets. It's time we changed that and openly opposed what is going on," he said.

Placards carried by the marchers reflect the mood of anger and humiliation at having to be bailed out by the EU and IMF. One was designed to look like an estate agent's billboard and read: "3,599 square miles For Sale. Full Planning Permission Granted".

The protest has not halted at the GPO in Dublin, the scene of the 1916 rising where trade unionists and workers are denouncing the government's cost cutting programme which will take €15bn out of the Irish economy over the next four years.

© 2010 Guardian News and Media Limited

http://www.commondreams.org/headline/2010/11/27

[Peter Presland]

Ireland has a population of about 4.5 million - just over 6 million if you include the Northern 6 counties that remain part of the UK and the Sterling currency system.

Any way you cut it that is one hell of a big turnout. Even taking the combined north/South population, the pro-rata numbers for the UK would be over 1 million (which is about what happened for the Iraq war demo - the biggest in UK history). Taking just the south it equates to around 1.3 million on a UK demo.

Will it have the same effect - ie none whatsoever in countries claiming to operate governments of the people for the people by the people? - probably.

[Magda Hassan]

Gas valued at €420 billion off the west coast of Ireland, while Fianna Fáil speeds us towards the IMF

By:
Conor McCabe - Dublin Opinion


Just a quick post to highlight the Shell to Sea factsheet, that there is €420 billion worth of natural gas of the coast of Ireland - all of which has been given for free to Royal Dutch Shell, Statoil, Exxon Mobil.

Ministers Ray Burke and Bertie Ahern changed Irish law in 1987 & 1992 so that multinational oil companies:
• own 100% of the oil and gas they find under Irish waters;
• pay no royalties on it;
• can write off 100% of their costs against tax, even costs incurred in other countries;
• have profits taxed at 25%, compared to an international average of 68% for oil-producing countries;
• can export the oil or gas outside Ireland;
• can sell to Bord Gais at full market rates.
Green Party minister Eamon Ryan has continued to issue licences to multinationals on these terms.

Now, call me old-fashioned, but I would have thought that the current situation would constitute a game-changer as regards that deal.
Anyway, have a read of the Shell to Sea leaflet, and have a think about it the next time someone tells you that the IMF is our only option.
This is just a short extract, the entire piece is linked below.

*The figures in detail
€420 billion is a lot of money. However, the true value of Ireland’s gas and oil is probably much higher. Our figure is based on the estimate, issued by the Department of Communications, Energy & Natural Resources (DCENR) in 2006, that the amount of gas and oil in the Rockall and Porcupine basins, off Ireland’s west coast, is 10 BBOE (billion barrels of oil equivalent). Based on the average price of a barrel of oil for 2009 of $60, this works out at $600 billion, or €420 billion. This does not take account of further oil and gas reserves off Ireland’s south coast. The total volume of oil and gas which rightfully belongs to Ireland could be significantly higher. The DCENR has also published much higher estimates at various times. Also, as the global price of oil and gas rises in the coming years, the value of these Irish natural resources will rise further.
++++++++++++++
A better deal is possible
Several countries have recently changed their laws to reclaim a greater share of gas and oil wealth
Even supporters of the Corrib Gas project rarely try to defend the outrageously generous terms of Ireland’s gas exploration laws in public. Instead they rely on the myth that the deal, once done, cannot now be changed. Nothing could be further from the truth.
The existing deal already allows Ireland to halt work on the Corrib Gas field. The licensing terms state: “The Minister may … require that specified exploration, exploitation, production or processing activities should cease … in any case where the Minister is satisfied that it is desirable to do so in order to reduce the risk of injury to the person … or damage to property or the environment.”
In fact, there is a worldwide trend of governments reclaiming ownership of privatised gas and oil reserves. In 2006 in Russia, the state-owned Gazprom took back control from Shell of the largest integrated oil and gas field in the world, Sakhalin-2, after Shell was accused of breaking environmental laws.
Bolivia nationalised its entire gas industry in 2006. At first, the reactions from the corporations and international markets in both cases were furious, with dire warnings given about how the countries would suffer from lost investment. But these warnings came to nothing: in the end the oil giants simply went along with these changes when they realised there were still enormous profits to be made.
There are many examples of successful nationalised oil and gas industries. Norway is one of the best examples of state-controlled extraction of gas and oil. Ironically, a significant chunk of the Corrib Gas profits will benefit the Norwegian people through Statoil, as it is majority-owned by the Norwegian government and has a 36% stake in Corrib.
Venezuela has begun nationalising the industry within the past two years. Most Venezuelans lived in degrading poverty throughout the 20th century, while enormous revenues from oil and gas went to foreign companies and a tiny Venezuelan elite. The government has redirected oil wealth into public spending, bringing health, education and dignity to the poor.
Even if Ireland’s gas and oil fields were not nationalised, hundreds of billions of euro could be raised if Ireland took a similar share in its own gas to that which applies in other countries
http://www.shelltosea.com/content/gas-va...owards-imf

[Jan Klimkowski]

Venezuela is a dangerous rogue state for daring to challenge multinational capitalism.

Ireland is a model democracy for allowing its politicians to give away its natural assets to multinationals, and sell the country's future to unelected international gangsters (aka the IMF and ECB and hedge funds).

Never mind. Who's going to win the x-Factor? :mad:

The elites are laughing at us.

[Magda Hassan]

Iceland Is No Ireland as State Free of Bank Debt, Grimsson Says

By Jonas Bergman and Omar R. Valdimarsson - Fri Nov 26 14:21:27 GMT 2010

Olafur R. Grimsson, president of Iceland. Photographer: Chris Ratcliffe/Bloomberg


Play Video

Nov. 26 (Bloomberg) -- Iceland's President Olafur R. Grimsson talks about the country's progress since receiving a $4.6 billion International Monetary Fund-led loan. He speaks with Mark Barton on Bloomberg Television's "On The Move." (Source: Bloomberg)



Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.
“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”
Ireland’s Prime Minister Brian Cowen said this week his government has discussed an 85 billion-euro ($112 billion) bailout with the European Union and International Monetary Fund after the country’s banks threatened to bring the euro member to the brink of bankruptcy. Iceland’s banks, which still owe creditors about $85 billion, were split to create domestic units needed to keep the financial system running, while foreign liabilities remained within the failed lenders.
As a consequence, “Iceland is faring much better than anybody expected,” Grimsson said. The Icelandic state’s liability on foreign depositor claims stemming from Icesave accounts at failed Landsbanki Islands hf should be put to a national referendum, he said.
“How far can we ask ordinary people -- farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”
Accept Losses
Iceland is relying on a $4.6 billion IMF-led loan to rebuild its economy. Grimsson said today the government may not need the entire amount.
Bondholders of European banks should be prepared to accept losses because voters are becoming increasingly unwilling and unable to fund bailouts, FXPro Financial Services Ltd. said in a Nov. 24 note.
“The taxpayer has no realistic prospect of being able to save their banks, such is the magnitude of their bad loans and their extraordinary dependence on central bank support,” wrote Michael Derks, chief strategist in London at foreign-exchange firm FXPro. “Both junior and senior bondholders in these insolvent banks need to suffer huge haircuts,” he said.
Forcing bond holders to “share the burden,” may help the euro region remain intact, Derks wrote.
Junk
Grimsson, who said Iceland’s talks to join the European Union are ongoing, in January this year blocked a $5.2 billion deal to cover British and Dutch depositor claims stemming from Icesave accounts. The move prompted Fitch Ratings to downgrade the island’s debt to “junk” as a normalization of international relations grew more remote. Iceland’s Finance Ministry on Nov. 16 said the country may now be weeks away from a “final resolution” to the Icesave dispute as it secures broad lawmaker backing for a new accord.
Kaupthing Bank hf, Landsbanki and Glitnir Bank hf failed within weeks of each other in October 2008 after they were unable to secure short-term funding. The banking crisis led to an 80 percent slump in the krona against the euro offshore, until the slump was stemmed by the introduction of capital controls at the end of 2008.
Kaupthing’s winding-up committee today said it finished dealing with claims lodged against it. The bank is dealing with a total of 28,167 claims filed by creditors across 119 countries totaling 7.32 trillion kronur ($63 billion), it said in a statement today.



http://www.bloomberg.com/news/2010-11-26...-says.html

[David Guyatt]

Ireland are due to sign the terms of the EU bailout at Noon today...

[Magda Hassan]

Still time to change their mind. Or have it changed for them.

[Jan Klimkowski]

The Shock Therapy ECT machine has been turned up to 17 and a half.

The screaming comes across the seas....

Ireland must find €17.5bn from its pension fund and reserves for bailout

Contribution demanded at meeting of eurozone ministers as proposals to shore up euro also outlined

Ian Traynor in Brussels, Henry McDonald in Dublin and Jill Treanor guardian.co.uk, Sunday 28 November 2010 20.24 GMT

EU ministers last night spelt out the terms of Ireland's €85bn international financial rescue package, and revealed the Dublin government will have to raid its national pension fund and other cash reserves for €17.5bn as a condition of the deal to bail out its banks and debt-laden economy.

The contribution from Ireland was unexpected, and it was demanded at a hastily arranged meeting of the eurozone's finance ministers who were desperate to secure a deal before the markets open tomorrow.

The package from the EU and International Monetary Fund includes €67.5bn of external loans. €10bn will go straight to the crippled banks, and €25bn is earmarked for bank support in the future. The remaining €50bn will be used to shore up the public finances and allow the government to keep making welfare payments and cover other expenses such as health and education.

The agreement was outlined after six hours of parallel emergency meetings in Brussels of all 27 EU finance ministers and of the 16 countries using the single currency. New proposals for a permanent crisis mechanism to shore up the euro from 2013, when the current schemes run out, were also outlined.

The gravity of the situation was such that the Chancellor, George Osborne, attended the Eurozone meeting, even though the UK is not in the single currency. The UK is to contribute an estimated €7bn, some €3.8bn in a direct loan for the banks.

Osborne said: "There is a loan going from Britain to Ireland of just over £3bn. Of course, Britain is also part of the EU and part of the IMF, so we stand behind their loans as well. It is in Britain's national interest. It is money we fully expect to get back, and we think it will help Ireland get on a fully stable path back to growth".

He also negotiated that the UK would not be part of any future eurozone bailout schemes after 2013.

Within minutes of the announcement, Ireland's embattled prime minster Brian Cowen was facing questions about whether his country could afford the interest on the loans, which will average 5.8%, as the repayments will amount to 20% of annual tax revenue. But he was unrepentant. "Can Ireland do without this package? The answer to that is No," he told reporters last night. "If we don't have this programme we would have to go back to the market, which has prohibitive rates," he said.

Ireland's borrowing costs have shot through 9% and anxiety about the terms of Ireland's bail-out package has reverberated through the eurozone. There have been sharp rises in the borrowing costs of Portugal and Spain, sparking fears that they too will need assistance to avoid a break-up of the eurozone,

Joan Burton of the Irish Labour party said that the Europeans and IMF had "played better poker" than Ireland. She claimed that the Irish government had gambled away assets such as the pension reserve fund in the discussions. "The EU and IMF have us where they want us," she said.

EU leaders wanted to demonstrate to the markets that they could contain the contagion in the eurozone, and for the first time yesterday called for the financial markets to bear some of the losses in future European sovereign debt crises.

Cowen made it clear that the authorities were trying to stop another crisis that would have been caused if bond holders had been forced to take losses. Such a move, he said, could have endangered the "entire financial system".

Dublin insisted the interest rates on the loans had to be less than 6%, even though this is more than the 5.2% paid by Greece when it was bailed out in April. While agreeing the Irish deal, the leaders of Germany, France, and the European Central Bank issued demands that the private sector should shoulder some of the losses in future bailouts, after 2013.

This issue of creditor "haircuts", or investor losses, has been highly contentious over the past month.

Chancellor Angela Merkel, President Nicolas Sarkozy, and the ECB chief, Jean-Claude Trichet, conferred over the weekend on the plan for a permanent euro rescue system. According to German officials yesterday, Berlin has scaled back its demand after running into resistance from the French and the ECB. The paper tabled yesterday, to be discussed at an EU summit next month, rowed back from a blanket insistence on creditor haircuts, instead saying the investor losses should be treated on a "case-by-case" basis.

http://www.guardian.co.uk/business/2010/...n-pensions

[Jan Klimkowski]

From politics.ie:

Is the interest rate on EU money not actually 7.25% taking account of our NPRF?

Originally Posted by seabhcan
I'm not so sure - I think they are trying to spin it.

The State’s contribution to the €85 billion facility will be €17½ billion, which will come from the National Pension Reserve Fund (NPRF) and other domestic cash resources. This means that the extent of the external assistance will be reduced to €67½ billion.

...

If drawn down in total today, the combined annual average interest rate would be of the order of 5.8% per annum. The rate will vary according to the timing of the drawdown and market conditions.

Presumably the pensions reserver funds are at 0%, as its already our money. They form about 20% of the total amount. If one fifth of the amount is at zero percent, and the average is 5.8% - what is the interest on the rest of the money? I calculate 7.25%

http://www.politics.ie/economy/144356-in...-nprf.html