Fintan O'Toole: 'Abysmal deal ransoms us and disgraces Europe'

Rebelheart

Having listened to O'Toole with surprise and not a little respect in the freezing cold outside the GPO on Saturday, I decided to do that rare thing and read a Fintan O'Toole article:

'Abysmal deal ransoms us and disgraces Europe'

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Here's an extract:

'....This is not a rescue plan. It is the longest ransom note in history: do what we tell you and you may, in time, get your country back.

The extent of the abandonment of Irish national interests is clear from three aspects of the deal.

The interest rate, at almost 6 per cent, is viciously extortionate.

The National Pension Reserve Fund, which is all we’ve got left for strategic investment to rebuild our economy, is to handed over – in a brazen example of “demanding money with menaces” – to failed banks.

The other is that, while the primary responsibility for what has happened in Ireland lies with our own political, administrative and banking elites, Europe was barely less stupid. European banks (especially those of Germany and the UK) shared in the delusion that Ireland was an endless gold-rush – why else did they shovel so many hundreds of billions, via the Irish banks, to our property developers? The ECB and the IMF continually testified to the essential soundness of the Irish banking system.

And, crucially, the ECB (and its political masters) fully endorsed the insane strategy of bailing out Anglo Irish Bank and Irish Nationwide. The ECB, no less than the Government, threw good money after bad. Morally, as well as pragmatically, the EU ought to share the pain.

... Instead, we have a punitive, short-sighted and utterly unsustainable deal that will not solve the Irish crisis and that reduces the EU to the status of a banker’s bailiff.'

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I think the guy is 100% correct. It's slowly but surely sinking in that the ECB had an enormous role in this crisis, from issuing cheap money to authorising support for banks. Indeed, its so-called "stress-test" of the banks not so long ago is now, clearly, a joke. Likewise, the interest rate of 5.8% is surely unsustainable (Morgan Kelly, who has been very accurate thus far, said 'An interest rate beyond 2 per cent is likely to sink us.' on 8 November last) and in reality setting Ireland up for default as soon as the Euro is in a stronger position. Furthermore, as Moore McDowell noted on RTÉ Radio 1 yesterday evening, we haven't been told if the 5.8% will only apply if we draw on the entire €67.5billion, or will it apply if we only take, say, €30billion? This issue was, intentionally, not made clear by anybody yesterday.

I think the Irish negotiators have given us a terrible deal. The Department of Finance has, once again, been utterly incompetent and using many of the same people who were pivotal in getting the Irish state into this mess in the first place (somehow these civil servants escape all criticism even though they'll be the same people running the country no matter who wins the next election.)


Did the Irish negotiators/government achieve a good or bad deal from the ECB/IMF?

yosemite_sam

Rebelheart wrote: »

Having listened to O'Toole with surprise and not a little respect in the freezing cold outside the GPO on Saturday, I decided to do that rare thing and read a Fintan O'Toole article:

'Abysmal deal ransoms us and disgraces Europe'

---

Here's an extract:

'....This is not a rescue plan. It is the longest ransom note in history: do what we tell you and you may, in time, get your country back.

The extent of the abandonment of Irish national interests is clear from three aspects of the deal.

The interest rate, at almost 6 per cent, is viciously extortionate.

The National Pension Reserve Fund, which is all we’ve got left for strategic investment to rebuild our economy, is to handed over – in a brazen example of “demanding money with menaces” – to failed banks.

The other is that, while the primary responsibility for what has happened in Ireland lies with our own political, administrative and banking elites, Europe was barely less stupid. European banks (especially those of Germany and the UK) shared in the delusion that Ireland was an endless gold-rush – why else did they shovel so many hundreds of billions, via the Irish banks, to our property developers? The ECB and the IMF continually testified to the essential soundness of the Irish banking system.

And, crucially, the ECB (and its political masters) fully endorsed the insane strategy of bailing out Anglo Irish Bank and Irish Nationwide. The ECB, no less than the Government, threw good money after bad. Morally, as well as pragmatically, the EU ought to share the pain.

... Instead, we have a punitive, short-sighted and utterly unsustainable deal that will not solve the Irish crisis and that reduces the EU to the status of a banker’s bailiff.'

---

I think the guy is 100% correct. It's slowly but surely sinking in that the ECB had an enormous role in this crisis, from issuing cheap money to authorising support for banks. Indeed, its so-called "stress-test" of the banks not so long ago is now, clearly, a joke. Likewise, the interest rate of 5.8% is surely unsustainable (Morgan Kelly, who has been very accurate thus far, said 'An interest rate beyond 2 per cent is likely to sink us.' on 8 November last) and in reality setting Ireland up for default as soon as the Euro is in a stronger position. Furthermore, as Moore McDowell noted on RTÉ Radio 1 yesterday evening, we haven't been told if the 5.8% will only apply if we draw on the entire €67.5billion, or will it apply if we only take, say, €30billion? This issue was, intentionally, not made clear by anybody yesterday.

I think the Irish negotiators have given us a terrible deal. The Department of Finance has, once again, been utterly incompetent and using many of the same people who were pivotal in getting the Irish state into this mess in the first place (somehow these civil servants escape all criticism even though they'll be the same people running the country no matter who wins the next election.)


Did the Irish negotiators/government achieve a good or bad deal from the ECB/IMF?

Fintan talks a lot of sense, its a shame the IMF/ECB did not get Cowan to sort out the Corrib gas deal. This is a real asset and should now be taken back as it would solve a lot of the mess with the money it would bring in

AlekSmart

I think the Irish negotiators have given us a terrible deal. The Department of Finance has, once again, been utterly incompetent and using many of the same people who were pivotal in getting the Irish state into this mess in the first place (somehow these civil servants escape all criticism even though they'll be the same people running the country no matter who wins the next election.)

Rebelheart you have it spot-on there.

This entire aspect appears to have floated clear over the bar as we collectively rush to crucify the Politicians,who after all are acting in the only way they know how.

What is most hair-raising of all is the realization that current Government policy revolves totally around what a few (now totally discredited) senior bankers told the Minister for Finance at that meeting back in 2008.

Is it any wonder that all concerned want to keep the shroud of commercial sensitivity wrapped tightly around the events of that night....The Coloured Smoke and Snake Oil Salesmen appear to have triumphed......again !!!