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EU/ECB involvement

  • 04-11-2010 9:00pm
    #1
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭


    There seems to be a trend emerging lately blaming the euro, ECB and EU for all our problems (which IMHO is wrong and short-sighted). It probably deserves a thread of its own since so many threads are being derailed by this.

    There is an interesting article in the Examiner today
    The Central Bank and ECB are ultra-secretive about the extent to which they have underwritten the finances of the state and our financial institutions. €40bn of NAMA bonds were transparent. The recapitalisation and deposit base of AIB and Bank of Ireland is less clear. Reports suggest ECB involvement of up to €260bn. The National Treasury Management Agency (NTMA) is due to re-enter the bond market early next year, with Government cashflow requirements of at least €20bn. Perhaps a quarter of this needs to be raised in the spring. An abortive bond launch places us in the same dilemma as the Greeks last April. Mutual denial exists between Dublin and Brussels about the inevitability of our fate.

    say wha??! 260 billion :eek:


Comments

  • #2
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,561 Mod ✭✭✭✭johnnyskeleton


    ei.sdraob wrote: »
    There seems to be a trend emerging lately blaming the euro, ECB and EU for all our problems (which IMHO is wrong and short-sighted). It probably deserves a thread of its own since so many threads are being derailed by this.

    That trend has been around for some time. It's one of the pillar's of David McWilliams' views on how the economy should be run.

    It's not so much a blame issue, more that there are growing calls for Ireland to leave the euro.

    The big problem with the euro is that the bloc took up a currency union without adopting similar taxation and spending measures. The impact on a high tax high spend economy or low tax low spend economy is not as severe as a country like Ireland that had a low tax high spend policy. IMO, the problem (if indeed it could be called a problem) is not the euro but Ireland, Spain etc joining it but only wanting the good side with none of the bad.


  • #3
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Yes David did start this, i remember all the arguments here, anways

    If the government wanted to play a joke and knock the legs from under the unions, they could introduce a dual currency/credit system where welfare and public wages/contracts are paid out in New Punts and has to be accepted as legal tender within the Republic.

    Bear with me please, Croke Park states that the wages should not be cut, but it doesnt say anything about what currency they have to be paid in :D, assuming the New Punt would start of on a 1:1 rate and then quickly devalue....

    Yes I know it would be somewhat cruel and ironic (market forces devaluing the earnings paid in New Punts) but oh well :P no love for the unions here.

    Just thinking out loud here, dual currency systems usually emerge or are imposed in other countries in moment of crisis, for example collapse of USSR had a transition from a single currency to dozens of currencies with the dollar being used widely in the black market. They are also popular with socialists (Cuba for example) and we all know how much FF love socializing their failures onto the people...


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