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Should Ireland Leave the EU?
Comments
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"Many" think the world is flat.Many now think the break up of the Euro is inevitable...
What amazes me is the number of people who seem to see that predicted course of events as a good thing....and if it breaks up (with the reintroduction of the New mark, the new Franc etc etc), and lets hope they are wrong. I understand UBS has predicted that should this happen, then the EU is unlikely to survive, mainly due to individual countries erecting barriers to trade and national government abandoning eu procurement rules to penalise all but their national companies. Additionally, UBS have predicted recession on a scale never before contemplated in a western style democracy, with the stronger economies contracting by +-25%, and weaker ones by up to 50%. While those numbers seem incredible, what is sure is we are in unchartered territory, and no one knows for sure what is going to happen. All we know is that national government, and supra national ones, seem to be powerless to act or shape events.0 -
There is a core of EU states which will ensure the survival of the Euro at practically all costs. If that means letting a couple of current members go, and some kind of a brake on the idea of European integration across all potential members, then that's what's going to happen.The Euro can't last, and the EU is under serious pressure.
The euro's predicament was inevitable, and was predicted from before the Euro was formed. The euro-fanatics who were the architects of this fiasco should be thoroughly ashamed of themselves for creating this appalling situation, yet now they put themselves forward as our saviours.
The only way forward is that the Euro will be scrapped, in either an orderly manner, or in a disorderly manner.
The real issue is that the Euro was a political project, driven forward by those who were less interested in the economics and more interested in forging an EU superstate. The problem is the people of Europe don't want a European superstate, although the euro-federalists ignore that and don't want to listen to the democratic will of the people of Europe.
The hubris of the euro-fanatics is the lesson we should all learn from what has happened. All the excuses we have been told as to why democracy is not necessary for any steps along the road, for Lisbon and all the rest, should never again be believed or accepted.
Will we learn?
The idea behind the Euro is a sound one. A safe haven in treacherous international waters. Relative independence from the US and its dollar, and probably against China down the road. If Europe stays in a fragmented national state, it can't hope to maintain its position against better organised regions - both existing and emerging. Focussed European cooperation is Europe's best insurance against the risk of increasing international irrelevance. Those who don't see this can take the risk that irrelevance isn't a necessary outcome. But there are states in Europe which take the longer view and are not prepared to leave everything to chance, and to dependence on the power of a US ally.
The Euro isn't just a currency.0 -
PS: IMO one can rest assured that should the Euro collapse, contingency plans are already in place for a replacement. IMO, there isn't a snowball's chance of a collapse. But that's not to say there aren't blueprints for a post-Maastricht single currency if it's needed.
And IMO, we should do everything in our power to make sure we are in whatever single currency emerges from the current crisis. Because if we're out, we're going to find ourselves slowly drawn back into Britain's orbit. That mightn't be an unattractive option to many Irish people. But, regardless of what many think about the 'surrender' of sovereignty to Brussels/Frankfurt, for me it would constitute the ultimate failure of Irish independence.0 -
Many now think the break up of the Euro is inevitable, and if it breaks up (with the reintroduction of the New mark, the new Franc etc etc), and lets hope they are wrong. I understand UBS has predicted that should this happen, then the EU is unlikely to survive, mainly due to individual countries erecting barriers to trade and national government abandoning eu procurement rules to penalise all but their national companies. Additionally, UBS have predicted recession on a scale never before contemplated in a western style democracy, with the stronger economies contracting by +-25%, and weaker ones by up to 50%. While those numbers seem incredible, what is sure is we are in unchartered territory, and no one knows for sure what is going to happen. All we know is that national government, and supra national ones, seem to be powerless to act or shape events.
That's an interesting take on what UBS were saying. You may have missed their point that all that is avoidable for a cost of about €1k per German:If Germany were to leave, we believe the cost to be around EUR6,000 to EUR8,000 for every German adult and child in the first year, and a range of EUR3,500 to EUR4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year. In comparison, the cost of bailing out Greece, Ireland and Portugal entirely in the wake of the default of those countries would be a little over EUR1,000 per person, in a single hit.
So the Germans are faced with a choice between a path that costs them €6-8,000 per person in the first year, and €3.4-4.5k per person each year after - and a path that costs them a maximum of €1k if they took the entire debt burden of three countries on.
Given those options, why is the first one "inevitable"?
cordially,
Scofflaw0 -
European Parliament plenary session
Strasbourg, 14 September 2011
Mr. President,
Mr. President of the Council,
Honourable members,
I welcome this opportunity to debate the measures that are urgently needed to respond to the turmoil in the euro area and on the global markets.
We are confronted with the most serious challenge of a generation. .....This is a fight for what Europe represents in the world. This is a fight for European integration itself.
....my first concern is implementation – implementation of what we have agreed.That is why it is now imperative that we demonstrate our joint resolve to act upon our decisions without delay.
...We must make the case and persuade our citizens why they should give their support.
So what is needed now, in the short term?
First of all, the implementation of the package agreed on 21 July by all Euro area Heads of State and Government, the President of the European Commission and the President of the European Central Bank, in the presence of the IMF.
... We have to recognise that sometimes there is a real problem between the speed of the markets and the time we take for democratic decisions. Markets are impatient and democracies are usually slower.
...It is now almost one year since the Commission put forward ambitious proposals to strengthen governance of Euro area economies.
...I would now ask the co-legislators to adopt this package as a matter of urgency.
....A system based purely on intergovernmental cooperation has not worked in the past and will not work in the future. After all, this is why the Community method and the European Union institutions were created by the member states in the first place.
The Economic and Monetary Union cannot function properly only on the basis of decisions taken by unanimity.
It is only through the European institutions that we will avoid a fragmentation of the Single Market and a disconnect between the 17 members of the Euro area and the European project of the 27 members that are our European Union. We must keep the Euro united and we must keep the Euro open.
We, the European Commission and the European Parliament, are the community institutions par excellence. And it is our duty to defend the collective European interest jointly.
....
The signal I receive time and time again from our global partners, including in the G20 is that the world expects more integrated Europe. In the age of the globalisation everybody expects Europe to be stronger and united.
...
The conclusion I draw is crystal clear - The only right way to stop the negative cycle and to strengthen the euro is to deepen integration....
....
What we need now is a new, unifying impulse – "un nouveau moment fédérateur", let's not be afraid of the word, moment fédérateur is indispensable.
It has become clear that we need an even greater integration of our economic and budgetary policies.
There has been much debate on the need for Eurobonds. Today I want to confirm that the Commission will soon present options for the introduction of Eurobonds. Some of these options could be implemented within the terms of the current Treaty, and others would require Treaty change.
But we must be honest: this will not bring an immediate solution for all the problems we face and it will come as an element of a comprehensive approach to further economic and political integration.
Let us not confuse these projects of deeper integration with immediate necessities. Ideas that would require substantial Treaty change are not going to be a substitute for Greece doing its homework or for Euro area countries strengthening their fiscal surveillance. We must avoid compounding the dissatisfaction in public opinion by being seen as failing to deliver overnight what we already know takes time.
The Commission will continue to play its role to the full, putting the key proposals on the table that shape both the immediate and the long term response. Proposals that are ambitious and should reflect the interest of all.
What both the citizens and the investors want is political determination and economic discipline. To deliver this, we need more, not less Europe.
Deeper integration is part of the solution. It will happen – not overnight – but in a solid, democratic process with a participation of this Parliament.
I believe that, with courage and wisdom, the European Union will – as was the case in the past – come out of the crisis stronger. It is certainly our duty to work for that.
The above is an excerpted speech made earlier by Barroso.
Obviously, I have chosen selectively from it, and further, I have highlighted the matters that are of most concern.
(the speech, while being a general call-to-arms, was seemingly primarily directed at the wavering contingent in Germany existing between those fully committed to European Federalisation and the increasing voices there who are calling for Germany to be copperfastened against and extricated from liabilities they see as only resulting from the economies of Ireland, Greece, Spain, Portugal & Italy)
Now, I have highlighted what I did lest there be anybody who still doubts the impetus behind and direction of the EUropean Union.
It is, of course, obvious to anybody who ahd a mind to look, but nonetheless this has never been openly admitted in Ireland by a public figure. All of the promotional campaigns concerning the EU and the treaties that strenghtened it's hold over us has ignored theis, the vital, over-riding principle behind it.
In other words, the EU cause has been advanced through blatant misrepresentation and lies.
More to the point, this federal cause is at absolute odds with the core principle of Nationhood on which our constitution is founded.
As I said, all this is blatantly obvious, but not one politician from the Taoiseach down will own up to it, and there remain probably, i'd guess, quite a large percentage of the population that automatically assume that supporting our independence is inherent in even our poorer politicians and is sacrosanct.
Now, today we have Barroso suggesting Eurobonds; which would virtually create a federalised condition without the necessary legislation and treaties/constitutional changes. Germany are unlikely to support, so, for the moment it is probably a non-runner.
But nevertheless, this 'crisis' has urged the Unifaction agenda out from under it's rock to declare itself in more strdent terms than we usually are privy to from the secretive agencies who promote it.
There are those in Ireland, inside and outside tha political class, who welcome it; whether from twisted ideology, vested interests or sycophancy.
A lot of them are on here, and the other forums.
But you'll find that their level of activity here, as elsewhere, is out of all proportion to their numbers - they congregate in anonymity such as these to make their voice seem like it's typical of general opinion in the country.
Now, I can't and have no intention of trying to provide material evidence of this.
I mention it merely as preamble to the suggestion that people who have doubts about or are opposed to the obliteration of our right to absolute self-governance should bring the subject up 'in real-life' rather than forums if they want ot either find out how the majority of people really feel or inform people who might not fully understand what is afoot.
Talk to your friends, neighbours and colleagues about it.
As for Ireland not surviving outside the European Union, or the other argument that was also repeated ad nauseum before Lisbon II to the effect of 'Look at what a mess our politicians made of Ireland; we'd be better off ruled by Brussels' -
to the first - the principle benefit of EU ( eec as it was ) membership was the ability to export without restriction or tarriff, which of course was and is great for a country that produces more than it consumes, well, since then trade is truly internationalised and countries even outside the EU area are incresingly availing of the same benefits. It's an obsolete advantage in other words.
As the other - Remeber that the only really outstandingly large debt that Ireland accrued was as a result of the Bank Guarantee - and the debt part of this guarantee was made to protect Anglo-Irish's creditors - the banks of France, Austria and Germany.
The public in Germany are for the most part ignorant of this fact.
As for the other debts - they occurred as a result of a building boom which would not have happened if it was not for the 'free-movement' and unsustainable economic enlargement policies that were imposed by the EU.
The number of homes in Ireland DOUBLED in less than ten years; there were not enough jobs for the enlarged population and unscrupulous employers have since taken advantage of the situation, to the detriment of both immigrant and ourselves.
This was the cause of the building boom, and the bank debts - that have since been coercively applied to us by the duress of the European Central Bank to prevent their core banks from suffering the losses that were theirs by right.
That's why I have to laugh when I hear RTE talk about it being good news that the ECB have decided to waive interest applied to us on their own debt. People should stop paying their licence fee for this puppet-media propoganda.
Anyway, without a doubt, the situation is coming to a head very, very quickly.
The European Union will fall apart if the Euro falls.
But for the Euro to survivce will require a hostile takeover of member states by the EU.
Kenny, Gilmore,....almost all our politicians (nor do I trust SF on this either) are first & foremost servants of the EU, above and beyond their false loyalty to us and our country, and any action they will take will merely be the enacting of directives assigned to them by Brussels.
All this can only be fought on the ground.
Express your will on this. It's your right.
Ignore all the snide, smart ass-isms that will doubtless follow this post and any other criticism of the EU and our govt.
I think you'll find that the vast majority of people in this country will similarly hold their right for a self-governing nation - where democracy rises from the populace and is expressed from the people in their government and not rule imposed by vested alien interests - dear & worth fighting for.0 -
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So the commitment of the EU to "ever closer union" is news?As the other - Remeber that the only really outstandingly large debt that Ireland accrued was as a result of the Bank Guarantee - and the debt part of this guarantee was made to protect Anglo-Irish's creditors - the banks of France, Austria and Germany.
Sorry, I have to pick up on this one. Would you like to present some proof for that claim? Because I've looked everywhere, and here doesn't seem to be any - everything points to minimal eurozone involvement in our banks, and a correspondingly likely heavy involvement by the US and UK.
cordially,
Scofflaw0 -
Full speech for those that want to read it without subjective editing
http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/5720 -
And please do read the full version - I excerpted the pieces that are of concern to the Irish nation with regard to the threat posed to Irish sovereignty as expressed by one of the most vocal proponents of integration.
Nothing was changed or altered to give a fase impression and I challenge to to identify a single such instance.
Here's a link which should answer the question for anyone other than EU agitators, who I wasn't addressing -
http://www.golemxiv.co.uk/2010/10/who-are-the-bond-holders-we-are-bailing-out/
Quote ''Of the 80 listed companies only 7 listed their business as dealing with pensions and being a cooperative savings institution. Of those, only 4 listed churches and unions as their clients, the others could well have been big pension funds. The churches and unions in question were in Germany not Ireland. Those seven companies are amongst the smallest of Anglo Irish’s bond holders. I only have figures for four of the seven. The largest, Union Investments of Germany, has a mere €165 billion in assets under management.
The total assets under management which I was able to compile from publicly available figures is €20,871,150,000,000. That is an underestimate because the bond holders who turn out to be Private and Swiss banks don’t publish any figures. So Anglo Irish’s ‘bond holders’ hold and invest MORE than 20.8 trillion euros. Guido lists those bond holders as holding between them 4 Billion euros in Anglo Irish bonds.
Now, in my opinion both figures are likely to be wrong. Certainly my figure is a large underestimate. But taking them at face value Anglo Irish would account for an one 5000th of the total assets being managed by all the bond holders. So would even a total default by Anglo Irish cause that much, let alone systemic, pain and risk? Why are the ‘Bond holders’ and the Irish government so concerned that the Irish people be forced to take the loss and pay the debts for them?
Now lets look at the other side of the equation, at Ireland itself. Well Ireland’s GDP before the crash, in 2008, was … drum roll please… €207 billion. Or 0.207 trillion.
SO…. on one side we have Ireland whose bond holders, its people, have between them a total GDP wealth of 0.207 trillion euros. Who are being FORCED, against their will, to pay Anglo Irish bank’s debts to its bond holders, who between them hold 20.8 Trillion euros. The people of Ireland are paying to, and protecting the wealth and power of, people who have 100 times more wealth!
So where do these wealthy bond holders live and work?
Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.
France is next with 10 bond holders. Who have about 4 trillion to keep them warm.
Britain is third with 9 who have around 3 trillion.
The Swiss have 6 but who have about 8.5 trillion.
America has only three and hold only a trillion.
Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.
All these figures are very rough. The figure for Switzerland is certainly under because Private Swiss Banks just don’t publish figures. What we can say for sure, figures or no figures, is these are not banks investing widow’s pensions or orphan’s pennies.
So who are they? Well many of the bond holders are privately held banks, which list their activities as asset management for off-shore, non-resident and high value individuals. To give you an example, one of the private banks is EFG Bank of Luxembourg. EFG stands for European Financial Group which is the third largest private bank group in Switzerland. It manages over €7.5 trillion in assets. It is ‘mostly’, 40%, owned by Mr Spiro Latsis, son of a Greek shipping magnate. He also owns 30% of Hellenic Petroleum. His personal fortune is estimated to be about $9 Billion.
Now there is absolutely no suggestion that Mr Latsis has ever done anything wrong or illegal. And his holdings are, I am quite sure, perfectly legal and above board. But when we talk of Anglo Irish’s bond holders it is Mr Latsis and those with his sort of wealth who we are talking about NOT widows and orphans or you and me. It is therefore worth remembering, the next time an Irish politician, or any of our politicians for that matter, say that some welfare payment can no longer be afforded, it is because the money that could have paid for it has been given instaed to the bond holders, people not unlike Mr Latsis. The Irish people are paying and protecting the interests of people like Mr Latsis over the interests of their own children. And it is their own politicians who have arranged this.
Other bond holders call themselves ‘asset management’ firms. The fifth largest asset management firm in the world is one of the bond holders. Others are insurance companies. The 6th and 9th largest in the world, to be specific. Others are the largest banks, Deutsche, Soc Gen, Barclay’s, PNB Paribas, UniCredit (who don’t appear on the list but own Pioneer Investments) and Wells Fargo (also not on the list but who own European Credit Management). Then there is Goldman. No show without the squid.
Kleinwort Benson Investors is a bond holder. But Kleinwort is owned by a Belgian holding company, RHJ which is part owned by Mr Timothy Collins. Mr Collins also sits on the board of Citigroup. So he too is one of the bond holders the Irish people are ‘helping’.
Finally, a very large number of the banks who are Anglo Irish’s bond holders, are members of something called the Euro Banking Association. All the large European banks, most of the large US ones, Swiss, Japanese, Nordic and some Chinese, are members. The chairperson is Mr Hansjorg Nymphius of Deutsche Bank. Other board members are from JP Morgan Chase, RBS, Bank of Ireland, West LB(bankrupt), BNP Paribas, ABN Ambro, Dexia and Banco Santander.
Its a list which could double as the list of Anglo Irish’s bond holders. The EBA was set up in Paris in 1985, since when it has been and is, central to promoting European Union financial integration and the area’s banking interests. The EBA has close ties to the ECB.
I will leave you to digest this disgusting bolus of self serving wealth protection.
The only thing left to say is this. The bond holders of Anglo Irish are a very good guide to the identity of the bond holders of ALL OUR BANKS. ''0 -
That's an interesting take on what UBS were saying. You may have missed their point that all that is avoidable for a cost of about €1k per German:
So the Germans are faced with a choice between a path that costs them €6-8,000 per person in the first year, and €3.4-4.5k per person each year after - and a path that costs them a maximum of €1k if they took the entire debt burden of three countries on.
Given those options, why is the first one "inevitable"?
cordially,
Scofflaw
Lets hope that it correct, and lets hope that the German taxpayer is about to pay €1000 for himself, or herself, and for each member of his or her family who are not taxpayers.
What seems certain is that we are in unchartered territory, with a political class who seem to be reacting to events, rather than framing them.
It would be marvellous if German taxpayers can solve this crises, and end the uncertainty, and take us all back to prosperity.0 -
And please do read the full version - I excerpted the pieces that are of concern to the Irish nation with regard to the threat posed to Irish sovereignty as expressed by one of the most vocal proponents of integration.
Nothing was changed or altered to give a fase impression and I challenge to to identify a single such instance.
Here's a link which should answer the question for anyone other than EU agitators, who I wasn't addressing -
http://www.golemxiv.co.uk/2010/10/wh...e-bailing-out/
...
The only thing left to say is this. The bond holders of Anglo Irish are a very good guide to the identity of the bond holders of ALL OUR BANKS. ''
Unfortunately, that list is bogus. It contains junior as well as senior bondholders, and doesn't contain any Irish bondholders, even though there are Irish bondholders holding exactly the same bonds as some of the other institutions on the list.
The list was originally leaked to the British blogger Guido Fawkes, evidently along with more detailed information that he didn't publish to allow him to defend it. Someone from Deka GmBh challenged him to name the bond they held, which he did - a junior coupon, exactly the same as the ones held by, for example, the Wexford Credit Union, and one that suffered a haircut of 40%. So even the claim that it's a list of those who were "bailed out" is bogus.
It's a pity people just swallow this stuff. Have you considered looking at the aggregate balance sheets of the bailed-out banks (published by the Central Bank of Ireland) or the published disclosures from the latest round of bank stress tests? Those will give you a more accurate idea of the money that flowed into Irish banks than a conveniently 'leaked' list that mysteriously fails to include known Irish bondholders.
cordially,
Scofflaw0 -
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That's an interesting take on what UBS were saying. You may have missed their point that all that is avoidable for a cost of about €1k per German:
So the Germans are faced with a choice between a path that costs them €6-8,000 per person in the first year, and €3.4-4.5k per person each year after - and a path that costs them a maximum of €1k if they took the entire debt burden of three countries on.
Given those options, why is the first one "inevitable"?
cordially,
Scofflaw
Theres a bit of selection bias in that article. Include Italy and Spain in that calculation and the numbers chance dramatically for the worse.
Surprised you missed that one. The markets/Chinese/Germans haven't.0 -
Theres a bit of selection bias in that article. Include Italy and Spain in that calculation and the numbers chance dramatically for the worse.
To date, we have 3 member states which have availed of a "bailout" loan facility. Hence, the report deals with that case - not potential cases of what might or might not happen. Reality is not usually classified as a "selection bias"...0 -
Theres a bit of selection bias in that article. Include Italy and Spain in that calculation and the numbers chance dramatically for the worse.
Surprised you missed that one. The markets/Chinese/Germans haven't.
Obviously they do - but on the other hand, nobody is expecting even a complete bailout of Ireland, Portugal and Greece (that is, absorbing their entire public debt) to be required, so factoring in a complete bailout of Spain and Italy seems even less required.
If France and Germany absorbed between them, say, a quarter of the total public debt of Ireland, Greece, Portugal, Spain and Italy, it would cost them, as a once-off payment, 17.5% of their GDP for one year. That's a large figure, but not as large as the estimated cost for each of them to leave the euro. And for the eurozone as a whole (excluding those being bailed out, obviously), the cost drops to 13% of GDP.
cordially,
Scofflaw0 -
To date, we have 3 member states which have availed of a "bailout" loan facility. Hence, the report deals with that case - not potential cases of what might or might not happen. Reality is not usually classified as a "selection bias"...
I would have said it quite often is!
cordially,
Scofflaw0 -
Obviously they do - but on the other hand, nobody is expecting even a complete bailout of Ireland, Portugal and Greece (that is, absorbing their entire public debt) to be required, so factoring in a complete bailout of Spain and Italy seems even less required.
If France and Germany absorbed between them, say, a quarter of the total public debt of Ireland, Greece, Portugal, Spain and Italy, it would cost them, as a once-off payment, 17.5% of their GDP for one year. That's a large figure, but not as large as the estimated cost for each of them to leave the euro. And for the eurozone as a whole (excluding those being bailed out, obviously), the cost drops to 13% of GDP.
cordially,
Scofflaw
17.5% of the combined GDP of Germany & France is an enormous amount of money, and probably accounts for 100% of the annual tax take of Germany and France combined. Perhaps even more.
Politically, it seems unlikely that either France or Germany would be able to achieve that, as it would be opposed by not only the opposition parties, but even members of the government.
The reward for so doing would be seen in the ballot box, as the French and German peoples would not tolerate such an action undertaken on their behalf by their government.
The only way they might be able to achieve something approaching that would be that, as a quid pro quo, (no pun intended!), the EURO countries would have to enter a financial union under the EU umbrella, effectively creating a United States of Europe. It's not even sure this can be achieved as the EU becomes more and more unpopular across Europe.
Its interesting times, and we are a long way from any resolution.0 -
17.5% of the combined GDP of Germany & France is an enormous amount of money, and probably accounts for 100% of the annual tax take of Germany and France combined. Perhaps even more.
Politically, it seems unlikely that either France or Germany would be able to achieve that, as it would be opposed by not only the opposition parties, but even members of the government.
The reward for so doing would be seen in the ballot box, as the French and German peoples would not tolerate such an action undertaken on their behalf by their government.
The only way they might be able to achieve something approaching that would be that, as a quid pro quo, (no pun intended!), the EURO countries would have to enter a financial union under the EU umbrella, effectively creating a United States of Europe. It's not even sure this can be achieved as the EU becomes more and more unpopular across Europe.
Its interesting times, and we are a long way from any resolution.
To be honest, I think a strong element of fantasy is needed to make believe that the issue would arise. However, it helps put the crisis in context - a 25% absorption of the PIIGS public debt by the remaining eurozone countries would only have the same effect on their balance sheets as adding NAMA (and only NAMA) to our balance sheet does on ours - and with a similar set of rationales and slightly better expectations of eventually being paid back.
So, while I'd agree that these are interesting times, and that we're a long way from full resolution, I don't think I think I mean by those things anything quite as exciting as you do.
cordially,
Scofflaw0 -
Obviously they do - but on the other hand, nobody is expecting even a complete bailout of Ireland, Portugal and Greece (that is, absorbing their entire public debt) to be required, so factoring in a complete bailout of Spain and Italy seems even less required.
Oh, must have missed that. Did someone suggest that?
Edited to say: Haircuts are generally expressed as percentages.
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To date, we have 3 member states which have availed of a "bailout" loan facility. Hence, the report deals with that case - not potential cases of what might or might not happen. Reality is not usually classified as a "selection bias"...
I suppose it depends on what you mean by "bailout loan". Does the purchase of Italian govt bonds by the ECB (when there aren't enough other buyers at sustainable interest rates to make the auction a success) count as a bailout?
Most (informed) neutrals would say it was precisely that.0 -
To be honest, I think a strong element of fantasy is needed to make believe that the issue would arise. However, it helps put the crisis in context - a 25% absorption of the PIIGS public debt by the remaining eurozone countries would only have the same effect on their balance sheets as adding NAMA (and only NAMA) to our balance sheet does on ours - and with a similar set of rationales and slightly better expectations of eventually being paid back.
So, while I'd agree that these are interesting times, and that we're a long way from full resolution, I don't think I think I mean by those things anything quite as exciting as you do.
cordially,
Scofflaw
Of course, we are both speculating and really are just trying to make sense of it all and trying to make judgments about what is likely to happen.
I was listening to Radio 4 this morning and they were very gloomy about the next few years, predicting that we will have no growth at all and more likely negative growth. Who knows what will happen, and lets hope for the best.0 -
I suppose it depends on what you mean by "bailout loan".
I was referring to the IMF/EU "bailout" loan facilities.Does the purchase of Italian govt bonds by the ECB (when there aren't enough other buyers at sustainable interest rates to make the auction a success) count as a bailout?
Most (informed) neutrals would say it was precisely that.
An interesting but rather expansive view of the term "bailout". Presumably then the decision of the Swiss National Bank to intervene in the currency markets to prevent the Franc going above 1.20 counts as a bailout also then. If Switzerland needed a bailout, then it really is time to buy baked beans and guns'n'ammo and take to the hills. 0 -
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I was referring to the IMF/EU "bailout" loan facilities.
An interesting but rather expansive view of the term "bailout". Presumably then the decision of the Swiss National Bank to intervene in the currency markets to prevent the Franc going above 1.20 counts as a bailout also then. If Switzerland needed a bailout, then it really is time to buy baked beans and guns'n'ammo and take to the hills.
Sure it was...a bailout of their exporters who were getting crushed. Why else would they do it?0 -
I think the liquidity conference today between the major central banks has pretty much put an end to the fears of the Euro collapsing. Once we can rebuild confidence in liquidity then there is no reason for us to not carry on as a whole.
Ireland, on the other hand, needs to get its house in order. We need banking reform/restructuring and we need it yesterday.
On a positive note, we were not included in the PIGS during most of the commentary on the central banks' discussions. Seems they have much more confidence in Ireland at the moment than Italy and particularly Greece.0 -
FreudianSlippers wrote: »I think the liquidity conference today between the major central banks has pretty much put an end to the fears of the Euro collapsing. Once we can rebuild confidence in liquidity then there is no reason for us to not carry on as a whole.
Ireland, on the other hand, needs to get its house in order. We need banking reform/restructuring and we need it yesterday.
On a positive note, we were not included in the PIGS during most of the commentary on the central banks' discussions. Seems they have much more confidence in Ireland at the moment than Italy and particularly Greece.
I'd have more faith in our economy to come out of this, than Italy, Spain, Greece and Portugal. I just hope the ECB addresses the Billions owed by Irish Banks.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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FreudianSlippers wrote: »I think the liquidity conference today between the major central banks has pretty much put an end to the fears of the Euro collapsing.
I'll notify the bond markets immediately. Attn...Message from Santa Clause...or is it mark-to-unicorn?
How many "Euro collpase avoiding" conferences/rumours/statements/statements of statements/etc have we had already? I've lost count...so I'll depend on "wiser" heads for a running total. China anyone?0 -
I'll notify the bond markets immediately. Attn...Message from Santa Clause...or is it mark-to-unicorn?
How many "Euro collpase avoiding" conferences/rumours/statements/statements of statements/etc have we had already? I've lost count...so I'll depend on "wiser" heads for a running total. China anyone?
And, on the flip side, how many "euro on verge of collapse" warnings have we now had?
cordially,
Scofflaw0 -
well...it is deteriorating. Surely even you can see that.
Edited: Also, Liquidity conferences will do nothing to address the issue...because liquidity isn't the issue.
This is now a banking and sovereign solvency issue. That is the fundamental reality the central planners are missing...alas...and this is the reason for the deterioration.0 -
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well...it is deteriorating. Surely even you can see that.
Edited: Also, Liquidity conferences will do nothing to address the issue...because liquidity isn't the issue.
This is now a banking and sovereign solvency issue. That is the fundamental reality the central planners are missing...alas...and this is the reason for the deterioration.
I'm not sure deteriorating is the right word - what I can see, I'd say, is that crisis, back at the beginning, was very deep, and that we've spent the last few years finding out how deep it really is.
The same logic applies, if you like, to our particular banking crisis - when it started, there was little appreciation how deep the hole in the banks was, and as that information was slowly revealed over time, I guess one might (and many did) say that the situation of the Irish banks was deteriorating, because the news appeared to be getting worse and worse. I would say that on the contrary, it was improving, because the actual position of the banks didn't change much, while the knowledge about their actual position constantly improved.
In terms of an analogy, it's like having dry rot in an old house you've bought. Initially you think there's just a bit, but as you start digging into it, you find that the rot is much more extensive than you thought. The amount of rot hasn't changed though - you've just found more of it, so while the news gets more and more depressing, the situation is actually improving, because you're getting a more and more realistic appreciation of the situation.
In the case of the euro crisis, the news has continued to get worse over time, but the appreciation of the depth of the crisis has grown for the same reason - and as a result of that, the pressure for coordinated and meaningful responses has grown. So we're now in a position where the knowledge and the political response are much improved from the early days of the crisis - whereas had that not improved, then the outcome of the real problems involved would certainly have been far more spectacular than it has been.
So, from my perspective, we're now into the 'coordinated response on the basis of knowledge' phase of the crisis, which is a better place than the 'running around like headless chickens looking for someone on whom to pin the blame for nebulous scary unknowns' phase - and I consider that an improvement rather than a deterioration. Deterioration, to me, would involve the crisis itself having got worse, in terms of real size or political response, and I don't think that's the case - quite the opposite.
Having said that, it's still a crisis, and it could still end disastrously (as opposed to just liveably miserably, as appears to be currently on the cards), but that will be the result of the original scale of the problems, not of any significant underlying increase in scale.
cordially,
Scofflaw0 -
I'm not sure deteriorating is the right word - what I can see, I'd say, is that crisis, back at the beginning, was very deep, and that we've spent the last few years finding out how deep it really is.
The same logic applies, if you like, to our particular banking crisis - when it started, there was little appreciation how deep the hole in the banks was, and as that information was slowly revealed over time,
The worry now is that the information about the Irish Banks is still inaccurate, and that there are big holes still in the balance sheets which are, as yet, not in the public domain, and that the past 3 years in Ireland have been wasted by the drip drip drip of information.
It is also worrying how incompetent the irish government and officials have been in their handling of this issue.
The coming weeks will be interesting.0 -
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The worry now is that the information about the Irish Banks is still inaccurate, and that there are big holes still in the balance sheets which are, as yet, not in the public domain, and that the past 3 years in Ireland have been wasted by the drip drip drip of information.
It is also worrying how incompetent the irish government and officials have been in their handling of this issue.
The coming weeks will be interesting.
I would say, myself, that allowing the domestic banking sector to get to a point where the government apparently had absolutely no idea of the state of the banks was in itself an act of staggering incompetence, made even more grotesque by the number of years over which it was taking place and the number of warnings ignored.
cordially,
Scofflaw0
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