ECB leaked bailout details

Jeboa Safari

Dermot Ahern says that the ECB leaked details to the press to force Ireland to accept a bailout, and they're doing the same to Portugal now, and put pressure on us about our corporation tax and public pay and welfare rates.

Interesting, the whole deal looks even worse. The deal was bad and now its looking like we were forced into it, could see a rise in anger because of it. I'm against this deal and this just annoys me further

http://www.independent.ie/national-news/ahern-accuses-ecb-of-bailout-plan-leaks-2442215.html

Tuesday November 30 2010
Europe tried to bounce Ireland into an international bailout before the Cabinet could discuss it, Justice Minister Dermot Ahern said today.

Mr Ahern also accused officials from the European Central Bank (ECB) of leaking details to the media to pressurise the Government into applying for a rescue loan.

The Justice Minister's remarks follow suggestions from Children's Minister Barry Andrews that the country was forced to accept the package offered by the European Union (EU) and International Monetary Fund (IMF).

After announcing his imminent retirement from national politics, Mr Ahern described the days prior to the bailout negotiations as fraught.

"I do believe there was an effort to bounce us into a discussion before the Cabinet had even discussed it," he said.

"Those few days were extremely fraught, quite clearly."

Mr Ahern was left red-faced after branding reports the Government was on the brink of a rescue package as fiction just days before Central Bank Governor Patrick Honohan revealed a bailout was on the cards.

The minister, who has revealed he will not stand in the upcoming general election, insisted he gave the factual position at the time and denied he was left out of the loop.

Although now backing the €85bn package, he claimed there had been no discussion at Cabinet of a bailout at that stage and accused the ECB of leaking information to the media.

"Clearly there were people from outside this country who were trying to bounce us, as a sovereign state, into making an application, throwing in the towel before we had even considered it as a government," Mr Ahern said.

"They were leaking in the papers that Sunday. [There was] quite incredible pressure on this country and, if you notice, they're doing the same with Portugal now."

Mr Ahern said Ireland was repeatedly under pressure over its controversial 12.5pc corporation tax rate and the differences in social welfare and public sector salaries between the Irish Republic and Northern Ireland.

Yesterday Mr Andrews said the Government did not want the massive bailout but was forced into it to pay teachers, gardai, nurses and childcare workers.

Mr Andrews added: "Our colleagues in Europe were prepared to put a package together for us and we had to accept that package."

A Dail debate will take place tonight and tomorrow on the rescue deal and the four-year savings plan.

Unconstitutional

Sinn Fein accused the Government of acting unconstitutionally in not putting the EU/IMF international loan agreement to a vote of the Dail.

The party's Dail leader, Caoimhghin O Caolain, said Mr Ahern's comments revealed the Cabinet was in disarray.

"The Constitution specifically refers to treaties that involve a charge on the public," Mr O Caolain said.

"If the Fianna Fail/Green Government persists in refusing to put the EU/IMF international loan agreement before a vote of the Dail they will be acting unconstitutionally. The Constitution is very clear."

The party called on all parties and Independents in the Dail to oppose the deal.

BKtje

I've always been a great believer in the EU but even I am starting to have some doubts over the system. That said I'm not so selfish to think that Ireland should tell the EU to go jump in a lake and therefore cause the collapse of the EU for half a billion people. I don't subscribe to the fact that the EU caused Irelands problems, I think it's very easy to pass the buck to someone else but I don't think the EU's interest rates helped any either.

I understand the need for a bailout package (I really can't see a default as an option) but the EU has to shoulder some responsibility and therefore give Ireland a fairer deal. That said i'm no economist and couldn't tell you what a fair deal is and in that regard i'm just following the lead of the media.

zig

BKtje wrote: »

I've always been a great believer in the EU but even I am starting to have some doubts over the system. That said I'm not so selfish to think that Ireland should tell the EU to go jump in a lake and therefore cause the collapse of the EU for half a billion people. I don't subscribe to the fact that the EU caused Irelands problems, I think it's very easy to pass the buck to someone else but I don't think the EU's interest rates helped any either.

I understand the need for a bailout package (I really can't see a default as an option) but the EU has to shoulder some responsibility and therefore give Ireland a fairer deal. That said i'm no economist and couldn't tell you what a fair deal is and in that regard i'm just following the lead of the media.

The EU didnt directly cause our problems but they are certainly punishing us now for decisions made by Cowen n Co. You must remember foreign banks and bondholders left themselves completely exposed to our banks. It was just as much their responsibility to make sure they were going to get their money back as it was Anglos etc to make sure they could pay it.
We the tax payer are now being punished by the EU for letting their gambles fail. But the tax payer is only being punished as a result of Fianna Fail decisions , the Europeans really dont care who shares the burdon so long as their own interests are looked after.

A default may be the only option down the road if things get worse, given the amount of debt the banks and now the people have incurred it will be extremely difficult for us to see any growth, emigration and unemployment figures are only going up unfortunately. At this stage all we can do is hope for a better bailout deal, because the only party with the balls to default is SF and I cant see them getting into power.

And like yourself,up till now I also was a great believer in the EU, I got angry over peoples reasons to vote no in the lisbon treaty , ive grown up thinking the EU has done nothing but good for this country, but im starting to question that now.

View

BKtje wrote: »

I understand the need for a bailout package (I really can't see a default as an option) but the EU has to shoulder some responsibility and therefore give Ireland a fairer deal.

There is no obligation anywhere in the EU Treaties for the other member states to provide Ireland with ANY assistance. By providing us with assistance, they are exceeding their obligations.

What exactly is fair about the other member states having to take out loans and pay the associated interest on those loans as a result of our failure to run our economy properly?

Lemming

View wrote: »

There is no obligation anywhere in the EU Treaties for the other member states to provide Ireland with ANY assistance. By providing us with assistance, they are exceeding their obligations.

Or looking out for their own vested interests. As has been said by many, it's in their interests to see that we don't default. At least not yet .... hence Merkel's comments of allowing bondholders get burnt after 2013. That gives ze Germans three years in which to recoup as much of their own loans as possible, at which point they'll say "cheerio and enjoy your default".

What exactly is fair about the other member states having to take out loans and pay the associated interest on those loans as a result of our failure to run our economy properly?

I'm no proponent of shifting the task on to others when we ourselves are culpable. But put it this way: had those seeking 100% return on their investments been rewarded in their risk-venture, the people of Ireland would not have shared in the rewards. But they are being told they are to share in the risk - in fact to assume the entire risk. Is that fair?

As I've said on another thread, I'm all for being told to take a doss of medicine no matter how vile it is, but it's quite another thing to be told that you've been "volunteered" for self-flagilation and that it's somehow a favour being done for you whilst the other hand is in your backpocket.

flynnlives

The ECB screwed us.
In the summer they stress tested our banks, they all passed.
The ECB then proceeded to lend 130billion to them.
A few weeks ago they pulled the plug, lender of last resort? my hole!


They screwed us then and are screwing us again.
And all because merkel is worried about the survival of her goverment.


Watch now how they turn on the printing presses and try and print their way outta this mess which they are only adding too!


default/restructuring/resolution whatever you wanna call it, it is on the way.

flynnlives

sorry double post

Jeboa Safari

View wrote: »

There is no obligation anywhere in the EU Treaties for the other member states to provide Ireland with ANY assistance. By providing us with assistance, they are exceeding their obligations.

What exactly is fair about the other member states having to take out loans and pay the associated interest on those loans as a result of our failure to run our economy properly?

The money is mainly owed to German/British/French banks so they're making sure they don't lose out. Our banks lended recklessly and were stupid, and the likes of Seanie Fitzpatrick should be in jail, but their banks lended recklessly to our banks, on the back of funds from German pension funds and money.
I don't understand how the IMF can lend to us cheaper than our European partners, and why we have to pay a higher interest rate than Greece, when we've at least been honest with our national budgets, and voluntarily taken measures to fix the deficit. A lot of the responsibility is ours, but not all, and to hold a gun to our heads and force us to take a bailout under their terms, when we didn't need to go back to the markets until the new year isn't right.

And it probably won't work, it'll stave off the inevitable, the markets haven't calmed, and it looks like Portugal will be next. The government should have put the Irish State first, and said we can't afford to bail out the banks, and the senior bondholders will have to take a hit. Bypass the EU and go to the IMF if need be. If the ECB just stopped funding the Irish banks they'd do damage to the rest of Europe. It should be time they started printing money anyway, the US and Britain are both doing it. The losses are eventually going to find their way back to their source, which is the French and German banks, this is just delaying it and causing more uncertainty throughout Europe.

Empire o de Sun

Lemming wrote: »

ze Germans

having spelling problems?

Lemming

Empire o de Sun wrote: »

having spelling problems?

Sorry, but given how unsubtle Merkel's "manoeuvres" are regarding 2013 and beyond, I really couldn't care less.

But yeah, feel free to comment on the rest of the post rather than focus on two letters, if of course you actually have anything to say on the matter other than to try take cheap shots from the sideline.

thebman

If this is FF bullplop then they need to issue a statement saying as much and just accept that they were lying to the Irish people.

This is a very serious allegation with potentially wide reaching consequences for the upcoming elections and could lead to a lot of increased support for the more extreme parties IMO.

kaiser sauze

It maybe that The ECB decided that our gormless crew were unable to make the right decision and seek help, preferring to stick their heads in the sand.

Sometimes, the wrong thing(s) can be done for the right reasons.

Talisman

Dermot Ahern is just trying to perpetuate the myth that the government were in control of the situation and but for the pesky meddling ECB we would be in a better situation. To the outside world, listening to any mouth piece for the Irish government talk about our economic situation must be like watching Mohammed Saeed al-Sahhaf's press briefings during the 2003 invasion of Iraq.

https://www.youtube.com/watch?v=s27Oq5ot0ZI

Our government repeatedly ignored the EU and ESRI regarding the economy for the past decade and finally the ECB had to grab them by the balls in order to get them to comply. I have no problem with this - it should have happened at least 12-18 months ago in my opinion.

Highly Salami

flynnlives wrote: »

Watch now how they turn on the printing presses and try and print their way outta this mess which they are only adding too!

This would actually be good for Ireland as it would effectively 'shrink' debt priced in euros.

Scofflaw

Jeboa Safari wrote: »

The money is mainly owed to German/British/French banks so they're making sure they don't lose out. Our banks lended recklessly and were stupid, and the likes of Seanie Fitzpatrick should be in jail, but their banks lended recklessly to our banks, on the back of funds from German pension funds and money.
I don't understand how the IMF can lend to us cheaper than our European partners, and why we have to pay a higher interest rate than Greece, when we've at least been honest with our national budgets, and voluntarily taken measures to fix the deficit. A lot of the responsibility is ours, but not all, and to hold a gun to our heads and force us to take a bailout under their terms, when we didn't need to go back to the markets until the new year isn't right.

And it probably won't work, it'll stave off the inevitable, the markets haven't calmed, and it looks like Portugal will be next. The government should have put the Irish State first, and said we can't afford to bail out the banks, and the senior bondholders will have to take a hit. Bypass the EU and go to the IMF if need be. If the ECB just stopped funding the Irish banks they'd do damage to the rest of Europe. It should be time they started printing money anyway, the US and Britain are both doing it. The losses are eventually going to find their way back to their source, which is the French and German banks, this is just delaying it and causing more uncertainty throughout Europe.

The money is not mostly owed to German, French and British banks, and most of the money we're getting as a bailout isn't for the banks - it's for State spending over the next 4 years, because we can't currently borrow on the open market, and may well not be able to at rates lower than those offered by the bailout facility for at least a couple of years.

The bailout programme consists of €10bn going to recapitalise the banks, a further €25bn on tap in case further recapitalisation is necessary, and €50bn for state spending. It's impossible to make a claim out of those facts that the money is for the banks to pay back foreign banks, because that amount of money isn't there for the banks. Details are here in the ECOFIN statement.

Nor do the Irish banks owe foreign banks anything like what is repeatedly claimed. Irish banks don't owe German banks €130bn - the German banks have pointed out that €100bn of that is actually money on loan by subsidiaries of German banks who are based in Ireland (because of our advantageous taxes) but whose loans are outside Ireland - so, for example, a German bank will have a subsidiary here loaning a German company the money to build a Berlin shopping centre. The German banks estimate their actual individual exposures to Ireland as at most a few hundred million each. And that's largely hedged against already.

Nor is the exposure of UK banks to Ireland in the form of money lent to Irish banks. Most of the UK's exposure is RBS, which has €68bn exposure to Irish loans directly - loans to Irish businesses, Irish mortgages - and has already been bailed out by the UK taxpayer to the point of being 83% state-owned.

The bailout money isn't going to pay back foreign banks - 75% of what we're being loaned is to pay social welfare payments and CS salaries over the next 4 years (5 years now, since the EU doesn't believe the government's growth figures).

cordially,
Scofflaw

jmayo

zig wrote: »

The EU didnt directly cause our problems but they are certainly punishing us now for decisions made by Cowen n Co. You must remember foreign banks and bondholders left themselves completely exposed to our banks. It was just as much their responsibility to make sure they were going to get their money back as it was Anglos etc to make sure they could pay it.
We the tax payer are now being punished by the EU for letting their gambles fail. But the tax payer is only being punished as a result of Fianna Fail decisions , the Europeans really dont care who shares the burdon so long as their own interests are looked after.

We critise Anglo and the others for lending wrecklessly and giving money away without ever looking at the risks.
How much different was it further up the chain where European and other banks poured money into the Irish banks ?

At the end of the day the Irish people are now responsible and have to pay for the inept management of not alone this country's banks, but it appears all the banks and institutions in the world that lent money to our banks.

View wrote: »

There is no obligation anywhere in the EU Treaties for the other member states to provide Ireland with ANY assistance. By providing us with assistance, they are exceeding their obligations.

What exactly is fair about the other member states having to take out loans and pay the associated interest on those loans as a result of our failure to run our economy properly?

True why should other countries' taxpayers pay for the mess in this country.
But then why should we the Irish taxpayers pay for the investments made by German, French, British, etc banks and investment funds ?
We are paying for the mistakes of private companies that we the general public never had a stake in.

Scofflaw wrote: »

The money is not mostly owed to German, French and British banks, and most of the money we're getting as a bailout isn't for the banks - it's for State spending over the next 4 years, because we can't currently borrow on the open market, and may well not be able to at rates lower than those offered by the bailout facility for at least a couple of years.

The bailout programme consists of €10bn going to recapitalise the banks, a further €25bn on tap in case further recapitalisation is necessary, and €50bn for state spending. It's impossible to make a claim out of those facts that the money is for the banks to pay back foreign banks, because that amount of money isn't there for the banks. Details are here in the ECOFIN statement.

You are engaging in semantics as we would not need a "bailout" (wrong term to use BTW) if it were not for the banks.
Even though most of the money is going for our CBD, we need to get it from them because we have borrowing difficulties becuase of our further necessary recapitalisation of the banks.
BTW some of that money for the banks is actually coming from our pension reserve fund is it not ?

Scofflaw wrote: »

Nor do the Irish banks owe foreign banks anything like what is repeatedly claimed. Irish banks don't owe German banks €130bn - the German banks have pointed out that €100bn of that is actually money on loan by subsidiaries of German banks who are based in Ireland (because of our advantageous taxes) but whose loans are outside Ireland - so, for example, a German bank will have a subsidiary here loaning a German company the money to build a Berlin shopping centre. The German banks estimate their actual individual exposures to Ireland as at most a few hundred million each. And that's largely hedged against already.

Hopefully none of those German institutions still based here operate in the same method as Depfa Bank. :rolleyes:

Scofflaw wrote: »

Nor is the exposure of UK banks to Ireland in the form of money lent to Irish banks. Most of the UK's exposure is RBS, which has €68bn exposure to Irish loans directly - loans to Irish businesses, Irish mortgages - and has already been bailed out by the UK taxpayer to the point of being 83% state-owned.

Remember Ulster were the eejits that backed sean dunnes folly in Ballsbridge. :rolleyes:

Scofflaw wrote: »

The bailout money isn't going to pay back foreign banks - 75% of what we're being loaned is to pay social welfare payments and CS salaries over the next 4 years (5 years now, since the EU doesn't believe the government's growth figures).

cordially,
Scofflaw

You cannot differentiate totally between our necessary borrowing requirements for the banks and that necessary for current expenditure.
Thanks to lenihan and biffo they turned the banks' debts and capital shortfalls into public soverign debts and public borrowings.

View

Lemming wrote: »

View wrote: »

There is no obligation anywhere in the EU Treaties for the other member states to provide Ireland with ANY assistance. By providing us with assistance, they are exceeding their obligations.

Or looking out for their own vested interests. As has been said by many, it's in their interests to see that we don't default.

That may well be true but it doesn't alter the fact they are under no obligation to help us out at all.

Right now, we are like someone drowning who is getting sniffy about the lifebelt that has been thrown to them. And no one else is waiting with a second better lifebelt to throw to us, lest anyone be under any illusions.

View

jmayo wrote: »

View wrote: »

There is no obligation anywhere in the EU Treaties for the other member states to provide Ireland with ANY assistance. By providing us with assistance, they are exceeding their obligations.

What exactly is fair about the other member states having to take out loans and pay the associated interest on those loans as a result of our failure to run our economy properly?

True why should other countries' taxpayers pay for the mess in this country.
But then why should we the Irish taxpayers pay for the investments made by German, French, British, etc banks and investment funds ?
We are paying for the mistakes of private companies that we the general public never had a stake in.

In a nutshell, because we need to borrow to fund the state's spending. Telling people that we won't pay back our loans and then asking them for another loan is not credible (And the government has turned the banks loans into "our loans" - i.e. de facto sovereign debt - by stepping in to bail out the banks).

Scofflaw

jmayo wrote:

You cannot differentiate totally between our necessary borrowing requirements for the banks and that necessary for current expenditure.
Thanks to lenihan and biffo they turned the banks' debts and capital shortfalls into public soverign debts and public borrowings.

In fact, one can do exactly that. State finances are state finances, and the deficit is exactly as I've cited - it doesn't include the bank bailout money. And the bailout facility differentiates in exactly the same way - the banks aren't part of the state, they're legally separate entities in state ownership, and putting money into them is a separate legal process from state spending as covered in the bailout facility and the IMF programme. That's why the government has to check it's not in breach of competition rules to put money into them or provide guarantees on their behalf - because state-owned enterprises are legally separate from the state. That isn't semantics, it's a legal differentiation - the difference being that a semantic differentiation would be meaningless, while legal differentiations are the facts of the crisis.

We have put the money the state has paid for the banks on the state's balance sheet as liabilities, and other countries have not - there is no requirement to do so, and if the liabilities are not called in, that money is never spent.

Now, if the banks do go belly-up while the state is still guaranteeing the debts of junior and subordinated debt holders, then the state will have a very big bill to pay, and that will be part of state finances. The bailout facility does not, however, cover that possibility.

So, on the contrary, you're the one engaged in semantics, by claiming that one cannot differentiate between the state's balance sheet liabilities that represent possible exposure and the state's spending gap. The two are not equivalent in any sense - one is money the state has to pay out, right now, into people's bank accounts as SW, pensions, salaries - the other is a potential debt that may or may not ever come to pass, but which requires no money to be paid right now.

If the guarantee ever falls due, and we cannot pay it, we cannot pay it, and we suffer an enduring loss of reputation, but no Irish citizen is necessarily out of pocket immediately - if we can't fund the State's day to day expenditure, on the other hand, Irish people will not get their social welfare, their pension, their salaries, their allowances, etc, immediately. World of difference there.

cordially,
Scofflaw

jmayo

View wrote: »

In a nutshell, because we need to borrow to fund the state's spending. Telling people that we won't pay back our loans and then asking them for another loan is not credible (And the government has turned the banks loans into "our loans" - i.e. de facto sovereign debt - by stepping in to bail out the banks).

I now it is not credible to not pay back our loans (i.e. soverign loans) and look for more.
If we did not have the millstone of the banks around our necks we could easily survive, but they are dragging us down and all the so called bailout did was add more weight.

We have to find a solution where we remove the Anglo/INBS bonds from our soverign debt and then come to an accomodation with the bondholders on partial repayment.
We just cannot survive otherwise.

Anyway wait a few months and there won't be a euro like today.
The BPIIGS are being picked off one by one and no matter what the Germans do they can't hold the whole thing together.
IMHO sooner or later the printing presses will go into overdrive.

Scofflaw wrote: »

In fact, one can do exactly that. State finances are state finances, and the deficit is exactly as I've cited - it doesn't include the bank bailout money. And the bailout facility differentiates in exactly the same way - the banks aren't part of the state, they're legally separate entities in state ownership, and putting money into them is a separate legal process from state spending as covered in the bailout facility and the IMF programme.

Ehhh except the International markets don't really differentiate, do they now ?

They see us needing 15 odd billion for our current budget deficit, etc, but then they see the big white elephant behind which is the cost of the bank recapitalisation, the possible losses on residential mortgages and the losses in NAMA.

You appear to be using lenihan's claim that the banks can be kept separate and thus it has no affect on our soverign debts.
True in legal terms the banks are separate from our actual budgetary necessities, but I counter that the internaitonal markets view this much the same way as a bank lender would view your entire debt exposure, which would not alone include the mortgage on your home, but the term loans you had incurred for the new car, the new pad in Bulgaria and the trip to Las Vegas.

Scofflaw wrote: »

Now, if the banks do go belly-up while the state is still guaranteeing the debts of junior and subordinated debt holders, then the state will have a very big bill to pay, and that will be part of state finances. The bailout facility does not, however, cover that possibility.

But has the state not already paid Anglo bond holders?
So your argument that this will only cost us if the banks go belly up is shot.
What about the recapitalisation costs, they are happening even without the banks going belly up so once again we have a cost that the state needs to fund.

Scofflaw wrote: »

So, on the contrary, you're the one engaged in semantics, by claiming that one cannot differentiate between the state's balance sheet liabilities that represent possible exposure and the state's spending gap. The two are not equivalent in any sense - one is money the state has to pay out, right now, into people's bank accounts as SW, pensions, salaries - the other is a potential debt that may or may not ever come to pass, but which requires no money to be paid right now.

Once again who paid the Anglo bondholders last September 6 odd billion and please tell me where it came from ?

Scofflaw wrote: »

If the guarantee ever falls due, and we cannot pay it, we cannot pay it, and we suffer an enduring loss of reputation, but no Irish citizen is necessarily out of pocket immediately - if we can't fund the State's day to day expenditure, on the other hand, Irish people will not get their social welfare, their pension, their salaries, their allowances, etc, immediately. World of difference there.

cordially,
Scofflaw

Either we are talking totally about different things or you are using the old NAMA arguments about how the banks will cost us nothing today, but might cost us something down the road.
The banks have costs us billions to date and it is not some hypothetical proposition that might occurr if the guarantee is ever called in. :rolleyes:

Empire o de Sun

Lemming wrote: »

Sorry, but given how unsubtle Merkel's "manoeuvres" are regarding 2013 and beyond, I really couldn't care less.

But yeah, feel free to comment on the rest of the post rather than focus on two letters, if of course you actually have anything to say on the matter other than to try take cheap shots from the sideline.

nothing cheap about that comment my friend

SkepticOne

Scofflaw wrote: »

The money is not mostly owed to German, French and British banks, and most of the money we're getting as a bailout isn't for the banks - it's for State spending over the next 4 years, because we can't currently borrow on the open market, and may well not be able to at rates lower than those offered by the bailout facility for at least a couple of years.

The bailout programme consists of €10bn going to recapitalise the banks, a further €25bn on tap in case further recapitalisation is necessary, and €50bn for state spending. It's impossible to make a claim out of those facts that the money is for the banks to pay back foreign banks, because that amount of money isn't there for the banks. Details are here in the ECOFIN statement.

The figures you supply show that the bulk of the money is going into the banks.

The total amount being loaned to Ireland should we draw it all down 67.5. Of that 25 billion will end up in the banks over time and 10 billion will immediately end up in the banks as recapitalisation.

The 67 billion being lent to us is being lent to us on the condition that 53%of it is used to prop up the banks.

Don't fall for this "Irish contribution" business. That is simply a device to make the figures look more like the loan is being used primarily to help run services.

Scofflaw

SkepticOne wrote: »

The figures you supply show that the bulk of the money is going into the banks.

The total amount being loaned to Ireland should we draw it all down 67.5. Of that 25 billion will end up in the banks over time and 10 billion will immediately end up in the banks as recapitalisation.

The 67 billion being lent to us is being lent to us on the condition that 53%of it is used to prop up the banks.

Don't fall for this "Irish contribution" business. That is simply a device to make the figures look more like the loan is being used primarily to help run services.

However, the Irish contribution is part of the €85bn programme, and includes the money that is going into immediate bank recapitalisation - so your figure of 53% is wrong. €50bn of the €85bn is for state spending, and the Irish NPRF contribution is going to the banks - as did earlier 'raids' on the NPRF - because the banks need real money, and the NPRF is the only bit of the bailout money that actually exists as such.

I know you want this to be about the banks - and indeed about foreign banks, ideally - but the hole in Irish state finances cannot be glossed over. The majority of the money in the programme - €50bn of €85bn (59%) - is going to fund the state, not the banks. If we go for detail, the figure gets higher, because the "Irish contribution" is already going to the banks. Even if we only take the €10bn that's going from the NPRF to the banks immediately, and assume the rest of the Irish contribution goes to state spending - unlikely, since the cash is better used in the banks - you'd still have €43bn of the €67bn that's being made available by foreign contributors going to prop up Irish state spending - 64%. You really can't make it 53% going to the banks except by ignoring the inconvenient facts - sorry!

cordially,
Scofflaw

SkepticOne

Ask yourself this:

a) How much are we being lent?
b) How much are we being told as part of the deal must be committed to the banks?

Everything else is spin.

The mistake that is being deliberately encouraged is that these two numbers are being added together whereas in fact it is more correct to consider the second number as part of the first.

feicim

Jeboa Safari wrote: »

I don't understand how the IMF can lend to us cheaper than our European partners, and why we have to pay a higher interest rate than Greece, when we've at least been honest with our national budgets, and voluntarily taken measures to fix the deficit..

Maybe this is the price for keeping our low corporation tax rate.

Scofflaw

SkepticOne wrote: »

Ask yourself this:

a) How much are we being lent?
b) How much are we being told as part of the deal must be committed to the banks?

Everything else is spin.

The mistake that is being deliberately encouraged is that these two numbers are being added together whereas in fact it is more correct to consider the second number as part of the first.

I'm afraid that without a good deal more evidence than you actually offer, that isn't anything more than a belief statement at this point. There's nothing to stop you repeating that it's about the banks, but the programme contains money for the banks, and money for state spending. The money for the former is in line with the government's claim as to how much the banks need - €10bn - plus another €25bn because nobody believes them. Everything else is for the day to day running of the state - noted, earmarked, and described as such - and is consistent with the projected state deficit over the next 4-5 years.

Yes, the banks are a problem - that's why the government has been busily bailing them out from the start of the crisis - but they really aren't the only problem. There is a huge hole in the public finances that can't be waved away by saying "it's all about the banks" - clearly it isn't all about the banks.

cordially,
Scofflaw

Scofflaw

You appear to be using lenihan's claim that the banks can be kept separate and thus it has no affect on our soverign debts.
True in legal terms the banks are separate from our actual budgetary necessities, but I counter that the internaitonal markets view this much the same way as a bank lender would view your entire debt exposure, which would not alone include the mortgage on your home, but the term loans you had incurred for the new car, the new pad in Bulgaria and the trip to Las Vegas.

But not, in exactly the same way, the debts of a company I'm director of, because that's a separate legal entity, and I cannot just share money back and forth at will. All the rest of what you cite are personal debts without any such legal separation, so the example is irrelevant.

We've put a lot of money into the banks, from the state - but, again, that's also irrelevant to the point that the bailout fund differentiates between money for day to day state spending, and money for the banks. If the bank lends me money for the day to day costs of running one of my businesses, and another amount to put into another of my businesses, it does not expect to find that I have put the money it lent me for one business into the other - if it did, it would not bother to distinguish between them.

State-owned banks are legally separate from the state. The state cannot move money in or out of them as if they were part of its general government balance sheet - amongst other things, it has to check that the amount it wants to put in is OK under EU competition/state aid rules, that being the same EU that's lending it money for two different purposes.

cordially,
Scofflaw