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Bailout Referendum, what way would you vote?
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SkepticOne wrote: »Here's my answer to this. First of all it is not an 85 billion bailout as 17.5 billion of that is money Ireland already raised prior to the bailout.
The answer is that if you are going to call the bluff of Brussels you need to be prepared to take the consequences if it doesn't work. That will mean a very harsh adjustment to current taxation levels in Ireland. This for me would not be desirable but if the alternative is debt slavery with very little chance of escaping then I am prepared to take it.
However there is also the point that the EU doesn't want us to throw the problem of the banks at them knowing that other countries may be tempted to do the same. They (quite rightly from their point of view) fear contagion. Therefore we can use this as a stick in the negotiations.
The more they "rule it out" or declare it as non-negotiable the more we become aware of its use as a stick.
It really isn't a stick, because what we want - a negotiated default - is worse from a contagion point of view than a unilateral default.
Scenario 1: Ireland unilaterally defaults on bank debt. Other European countries make clear their disapproval, refuse to follow suit, possibly make punitive moves. Result: markets are disturbed - degree of withdrawal from European bank debt depends on the extent to which they believe the other European countries won't follow suit.
Scenario 2: Ireland defaults on bank debt with European agreement. Result: markets assume other European countries will follow suit, mass withdrawal from bank debt across Europe.
You want to argue for scenario 2 by threatening scenario 1. It's not credible.
cordially,
Scofflaw0 -
Contrary to the apparently conventional economic wisdom on the bailout, I'd vote No, actually.
People on both sides seem to misunderstand the entire situation; on the one hand you have those supporting deference to Europe and amicably resolving the issues in some sort of negotiations with our perceived buddies, the other side put forward an equally stupid argument of showing the world our balls.
In actual fact, the Europeans need to understand, in terms that are both forceful, unilateral and quite clear, that Ireland will not accept the current debt situation. Banking debt must be transferred to a central European vehicle, a precursor to Eurobonds must be devloped via a European Treasury and Debt Agency and in returj Ireland must necessarily respond quid pro quo in terms of fiscal stability and harmonised taxation and by signing up to a new European treaty to those effects.
As Wolfgang Muchau wrote the other day in the FT, this needs to be cleared up for once and for all, there will be no going back to the Bundestag, cap in hand, next May.
Like the Israeli conflict, the European debt crisis, it is one where everybody knows what the end result must be, the problem is in negotiating effectively to reach that end as quickly and as peacefully as possible.0 -
Thought you were against "showing our balls"?In actual fact, the Europeans need to understand, in terms that are both forceful, unilateral and quite clear, that Ireland will not accept the current debt situation.
Anyway I would agree with your proposals and would also vote No for similar reasons.0 -
Contrary to the apparently conventional economic wisdom on the bailout, I'd vote No, actually.
People on both sides seem to misunderstand the entire situation; on the one hand you have those supporting deference to Europe and amicably resolving the issues in some sort of negotiations with our perceived buddies, the other side put forward an equally stupid argument of showing the world our balls.
In actual fact, the Europeans need to understand, in terms that are both forceful, unilateral and quite clear, that Ireland will not accept the current debt situation. Banking debt must be transferred to a central European vehicle, a precursor to Eurobonds must be devloped via a European Treasury and Debt Agency and in returj Ireland must necessarily respond quid pro quo in terms of fiscal stability and harmonised taxation and by signing up to a new European treaty to those effects.
As Wolfgang Muchau wrote the other day in the FT, this needs to be cleared up for once and for all, there will be no going back to the Bundestag, cap in hand, next May.
Like the Israeli conflict, the European debt crisis, it is one where everybody knows what the end result must be, the problem is in negotiating effectively to reach that end as quickly and as peacefully as possible.
I agree with that, and regard it as the practical course - although I don't know at this stage what value a referendum No would have - but, out of interest, morally where do we get off demanding that Irish banking debt be socialised onto the taxpayers of all of Europe?
cordially,
Scofflaw0 -
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Nonsense - an advocate of representative democracy would argue that political decision should be made by a parliament of elected representatives. Since the ultimate role of a parliament is that of a legislature, it has an experience of dealing with legislation on a day-to-day basis that the vast majority of the general public can never match at the best of times, much less in the heat of a referendum campaign (and none of the campaigns here have exactly been models for the referenda process btw). Furthermore, the system is designed to damp down the more extreme "popular opinions" that can engulf a society in the short term.
In other words, politicians know best and they should be allowed to do whatever they want, regardless of what the people want.
Now THAT worked out extremely well for us over the last decade, didn't it?0 -
In any form of negotiations you need to make assumptions. I don't think it is possible without such assumptions.Those are very big assumptions - the other member states might not like the possibility of contagion but that doesn't mean they are scared of it.
No, the best way of preventing other countries from resorting to the same tactics is by giving them a deal where they don't have to resort to such tactics.At least for some of them, the cost of taking a hit from an actual Irish default would probably be cheaper than the cost of capitulating to an attempt - either actual or merely perceived - by Ireland to threaten our way to a better deal. Particularly, as it would open the door to others trying the same tactics.
And indeed the outcome of a referendum is by no means certain. This is why a referendum may be necessary if the government is to pursue an robust stance.That wouldn't be the case for all of them of course but as each member state makes their decision individually that is a bit beside the point.
On the other hand, there is very little evidence from out election campaign that people here would be willing to face the closure of entire government departments plus associated services in order to be "vindicated" in some sort of inter-governmental game of "chicken" with the other member states.0 -
I'm not especially convinced that Ireland's balls have descended yet actually. However luckily for us, the issue is not one of testosterone. The Europeans and financial houses are about as impressed by bravado rhetoric as they are by Enda Kenny hopping around in a wrestling suit. Not very.SkepticOne wrote: »Thought you were against "showing our balls"?
But they need to understand the consequences of the current crisis mechanism for the European project as a whole. It isn't abotu bravado, it's about being realistic with our colleagues and expecting a reasonable response, which we are perfectly entitled to expect.
I think that's a question for a philosopher; I don't personally know much about the morality of any of this. As one German commentator said last week, Angela Merkel doesn't do buddy politics. Similarly, we shouldn't expect friends in Europe, the end has come to the Eurozone as a political movement; it must now be one of sensible economics whereby we treat one another like grown up business partners.Scofflaw wrote:morally where do we get off demanding that Irish banking debt be socialised onto the taxpayers of all of Europe?
In any case, to get back to your point, I don't think morality is a pressing issue because the long term loss on Irish debt need not be as significant as many of those advocating a total default would desire. Ireland, must, necessarily, repay its debts. It will be painful, it must be. But there are ways for our ability to repay to be ameliorated, such as a European Treasury, a precursor to Euro sovereigns, and a European vehicle for banking debt. Ideally, Ireland would still be responsible for discharging its own debts under the proposed model, it wouldn't be simply socialised proportionately across Europe. That would be grossly irresponsible.
Presently, the irish bailout has cost the Europeans precisely nothing in terms of extending credit to the state; it is simply unsustainable and unreasonable that they can impose serious restrictions on Ireland's economic future in such a situation as currently exists. This whole process must be - genuinely - quid pro quo. At present the core economies are coming up short in terms of what they are bringing to the table. It is in their own interest to offer more, but as we know, European governments have a habit of hiding behind the curve and often don't break a sweat until it is too late.0 -
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Except that in this case the sitting government had absolutely no mandate whatsoever left from the people.There is really no question of "calling the bluff of Brussels" here. On what grounds can we possibly play hardball with Europe at the present time? Our negotiating position since the guarantee has been extremely weak. We have much more to lose than Europe does if we take the nuclear option.
If we do the right thing and allow failed businesses to go under (IE Anglo & co), investors across Europe who made crappy gambling decisions will lose their money. Isn't that what the whole "bailout" is about in the first place? Forcing ordinary people to pay for the mistakes of bondholders?
To give you an analogy, it's like asking a group of teetotalers to pay for an alcoholic's drinks because he has run out of money for them.If Europe accedes to our demands for some kind of pain-free, low-interest bailout, won't that actually tempt other nations to say, "Hey! Look at what the Irish got away with. Let's do the same thing!"
Any other country which is being asked to bail out private speculators and investors at the expense of the ordinary citizen should rightly give Brussels the two fingers.
TBH I wouldn't have such strong views about this if the bailout was about Ireland's fiscal situation and if these harsh terms were being put on us to bail out our public finances. That would be somewhat more reasonable. But they aren't. This is a case, literally, of the taxpayer bailing out private corporations who ****ed up.
If a business fails, it fails. End of story. If we believe in a free market, a bank which ****s up loses its money and investors lose their investment. Just like if someone invests in a start up company and it doesn't work out. That's how investment works.
If we're going to bail out investors, how about we compensate everyone who bought a house during the boom as a financial asset and has now been utterly burned?
Either all investors are burned or none, IMO. Caving in to banking investors and giving them special status is utterly unjust to the entire rest of the population.0 -
I'm not especially convinced that Ireland's balls have descended yet actually. However luckily for us, the issue is not one of testosterone. The Europeans and financial houses are about as impressed by bravado rhetoric as they are by Enda Kenny hopping around in a wrestling suit. Not very.
But they need to understand the consequences of the current crisis mechanism for the European project as a whole. It isn't abotu bravado, it's about being realistic with our colleagues and expecting a reasonable response, which we are perfectly entitled to expect.
I think that's a question for a philosopher; I don't personally know much about the morality of any of this. As one German commentator said last week, Angela Merkel doesn't do buddy politics. Similarly, we shouldn't expect friends in Europe, the end has come to the Eurozone as a political movement; it must now be one of sensible economics whereby we treat one another like grown up business partners.
In any case, to get back to your point, I don't think morality is a pressing issue because the long term loss on Irish debt need not be as significant as many of those advocating a total default would desire. Ireland, must, necessarily, repay its debts. It will be painful, it must be. But there are ways for our ability to repay to be ameliorated, such as a European Treasury, a precursor to Euro sovereigns, and a European vehicle for banking debt.
Presently, the irish bailout has cost the Europeans precisely nothing in terms of extending credit to the state; it is simply unsustainable and unreasonable that they can impose serious restrictions on Ireland's economic future in such a situation as currently exists. This whole process must be - genuinely - quid pro quo. At present the core economies are coming up short in terms of what they are bringing to the table. It is in their own interest to offer more, but as we know, European governments have a habit of hiding behind the curve and often don't break a sweat until it is too late.
I don't think that last is the case, though - I think we just ignore any impact bailing us out may have on them. It's certainly something they - and others - think about:
French public debt: the impact of Ireland
cordially,
Scofflaw0 -
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Well this is the big question. If a referendum were to be called I would vote No on this because I think ultimately it is cheaper to bail out Ireland properly and have the burden of the banks shared at the European level than have Ireland default and destabilise the Eurozone. This was the point made in an article I posted from the FT a few days ago and I agree with it. And remember our backs are to the wall anyway. It is the opinion of many economists that we're going to default at some stage under the current deal and I see no reason to disagree with them. On that basis I think the best thing is to stop putting off the crisis and deal with it once and for all now.This post had been deleted.0 -
I agree with the second part of this. It is not about bravado but about Ireland standing up for its own interests and using whatever it has at its disposal but I think you are being a bit hypocritical when you dismiss other arguments along the same line as "showing your balls".I'm not especially convinced that Ireland's balls have descended yet actually. However luckily for us, the issue is not one of testosterone. The Europeans and financial houses are about as impressed by bravado rhetoric as they are by Enda Kenny hopping around in a wrestling suit. Not very.
But they need to understand the consequences of the current crisis mechanism for the European project as a whole. It isn't abotu bravado, it's about being realistic with our colleagues and expecting a reasonable response, which we are perfectly entitled to expect.0 -
It really isn't a stick, because what we want - a negotiated default - is worse from a contagion point of view than a unilateral default.
Scenario 1: Ireland unilaterally defaults on bank debt. Other European countries make clear their disapproval, refuse to follow suit, possibly make punitive moves. Result: markets are disturbed - degree of withdrawal from European bank debt depends on the extent to which they believe the other European countries won't follow suit.
Scenario 2: Ireland defaults on bank debt with European agreement. Result: markets assume other European countries will follow suit, mass withdrawal from bank debt across Europe.
You want to argue for scenario 2 by threatening scenario 1. It's not credible.
cordially,
Scofflaw
Hasn't it been pointed out that we are going to default whether we want to or not as we simply do not have the money to pay this back.0 -
This a european problem as well and there are funds set aside for this eventuality,the least we can expect from those who are supposed to be our allies in this, is funds from this fund without punitive intrest rates and that they dont behave towards us as if we are some troublesome colony of germany and france.They have all agreed that these outcomes in the future will be done in a less punitive manner but when we have paid back nearly everything,then the rules change.Germany is going through a series of elections at the moment where our fate is being decided because the germans think the bail outs should be harsher despite the eu s shylock rates.0
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Hypocritical, perhaps, I'm just removing myself from those who suggest that ireland impress the world by "burning" senior bondholders or by showing Germany the Queensbury Rules. Ireland does have a hand to play, contrary to what Europhiles might suggest and it must be forceful in its negotiation of the crisis mechanism. But just as Europhiles are generally wrong on the sovereign debt crisis, so too are most advocates of unilateral or large scale default.SkepticOne wrote: »I agree with the second part of this. It is not about bravado but about Ireland standing up for its own interests and using whatever it has at its disposal but I think you are being a bit hypocritical when you dismiss other arguments along the same line as "showing your balls".
Personally, I don't necessarily advocate any type of default on senior debt - not even senior banking debt. European aid is not a panacea, it will all be painful, but it must be operated intelligently. The current bailout scheme is like something that was written by the illiterate hand of a German yokel. It is doomed to never resolve or address anything, and may possibly be the European death warrant. The bailout mechanism needs to be changed dramatically and Ireland must insist on that. Germany too, if Germany sees a future for the Euro, must insist on that.0 -
Yes you're quite correct in one way but that report is really only talking about a real impact in an eventuality that many people hope will never arise, and indeed must never arise. At present, the Europeans have not themselves lent Ireland one red cent, that's all I meant.I don't think that last is the case, though - I think we just ignore any impact bailing us out may have on them. It's certainly something they - and others - think about:
http://www.research.hsbc.com/midas/Res/RDV?p=pdf&$sessionid$=4OYhRerPvvAft_ZrBwNJ1aF&key=jmIwigaSbk&n=285720.PDF
We cannot trade economic recovery in IOU's. There needs to be real financial commitment to integration and a unified treasury if Ireland is to pull itself out if the hole that it has dug for itself. It may not be fair that that is necessary, it may not be right, but it is necessary.0 -
hatrickpatrick wrote: »In other words, politicians know best and they should be allowed to do whatever they want, regardless of what the people want.
We are a democracy. Politicians are elected by the people in elections. We even had one a week ago in case you missed it.
The people are free to elect whoever they want and/or stand for election themselves in these elections. If we end up with idiots after an election, the old saying that "In a democracy, the people get the politicians they deserve" definitely applies.hatrickpatrick wrote: »Now THAT worked out extremely well for us over the last decade, didn't it?
Let me guess - the people were all opposed to our economic policies for the last decade but the evil politicians just forced us to go out and buy properties against our wills. :rolleyes:0 -
SkepticOne wrote: »In any form of negotiations you need to make assumptions.
And if your assumptions have no basis in reality, you just end up imposing additional pain on yourself for no benefit whatsoever.
Your entire strategy is based on the possibility that the other member states might be afraid of the consequences of a default by Ireland, whereas we can be absolutely certain that should they refuse to roll over pathetically straight away we will face immediate massive cuts and mandatory lay-offs in all our governmental services.
You can't bluff if everyone knows all the cards in your hand and know that, should they call your bluff, you'll have to: either immediately fold or suffer an unbelievable painful loss.0 -
You said earlier "In actual fact, the Europeans need to understand, in terms that are both forceful, unilateral and quite clear, that Ireland will not accept the current debt situation. Banking debt must be transferred to a central European vehicle [...]"Hypocritical, perhaps, I'm just removing myself from those who suggest that ireland impress the world by "burning" senior bondholders or by showing Germany the Queensbury Rules. Ireland does have a hand to play, contrary to what Europhiles might suggest and it must be forceful in its negotiation of the crisis mechanism. But just as Europhiles are generally wrong on the sovereign debt crisis, so too are most advocates of unilateral or large scale default.
Personally, I don't necessarily advocate any type of default on senior debt - not even senior banking debt. European aid is not a panacea, it will all be painful, but it must be operated intelligently. The current bailout scheme is like something that was written by the illiterate hand of a German yokel. It is doomed to never resolve or address anything, and may possibly be the European death warrant. The bailout mechanism needs to be changed dramatically and Ireland must insist on that. Germany too, if Germany sees a future for the Euro, must insist on that.
All very reasonable but what I want to know here is in what way do we make them understand in a "unilateral and forceful way that Ireland does not accept the debt situation". What action do you propose that would convince them of that?
Remember you are advocating a "no" vote in the referendum. This means that if our bluff is called then we will default as we will have no access to other funds. It seems to me that if you are going to advocate a "no" vote then logically you must be prepared to take the consequences if you fail to persuade the other party of the wisdom of your position.
This is not a case of the deal being simply stupid from the European point of view. Those that framed the deal and then put pressure on Ireland to accept it knew exactly what they were doing. They knew it was not going to resolve the problem once and for all; it is a mistake to assume that that was the goal. What it did achieve was that the banking debts have been contained for the next couple of years in Ireland rather than either have bondholders some European vehicle yet to be set up take the hit. Some other arrangement can be found in a few years to keep the thing going but the problem has been contained for the time being.0 -
Yes, however it does seem as if one of the driving forces behind the EUs activities has been fear of contagion.And if your assumptions have no basis in reality, you just end up imposing additional pain on yourself for no benefit whatsoever.
Yes, although I am personally fairly sure that the EU is afraid of the consequences of default by Ireland (particularly the consequences if it spreads to other EU countries), I don't know that for sure. I'm willing to act on the basis that this is the case but I'm also willing to take the consequences should it be wrong.Your entire strategy is based on the possibility that the other member states might be afraid of the consequences of a default by Ireland, whereas we can be absolutely certain that should they refuse to roll over pathetically straight away we will face immediate massive cuts and mandatory lay-offs in all our governmental services.
If it was the case that the current bailout was ultimately in Ireland's interest then I would agree with you, but I don't. It is about containing a European problem within one of the countries unfairly at the expense of that country.You can't bluff if everyone knows all the cards in your hand and know that, should they call your bluff, you'll have to: either immediately fold or suffer an unbelievable painful loss.
Personally I would vote "no" even if it meant that funding would be immediately cut off with no chance of another deal from Europe, even though I don't think this is the most likely outcome. I am nevertheless prepared to do it if that is what it takes.0 -
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Let me guess - the people were all opposed to our economic policies for the last decade but the evil politicians just forced us to go out and buy properties against our wills. :rolleyes:
This bullsh1t of we all bought properties again. You can speak for yourself if you bought but many people, including myself did not buy a property or lose the run of ourselves.
Some figures I found of politics.ie
Number of adults in ireland: 3267000
Number of residential mortgages: 786164
So you, and anyone else spinning FFs crap that we all partied with the banks buying properties can drop it.0 -
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Bullseye1 wrote:Hasn't it been pointed out that we are going to default whether we want to or not as we simply do not have the money to pay this back.
The claim has certainly been made, but I find that whenever I ask why default is inevitable, the answer I get is that the debt's too big. When I ask how the debt's too big, I'm told that it's because it's so big that it will force us to default.
As I said elsewhere, the answer seems to be that people believe that default is inevitable because they can't see it not happening, which is pretty much just a belief statement.
If we want to credibly convince the lenders of last resort that default is really inevitable under the current setup, I suspect we will need to do a little better than that. Children may believe they really will die if they don't get such and such a toy, but adults know that they won't.
cordially,
Scofflaw0 -
I agree with that, and regard it as the practical course - although I don't know at this stage what value a referendum No would have - but, out of interest, morally where do we get off demanding that Irish banking debt be socialised onto the taxpayers of all of Europe?
cordially,
Scofflaw
But morally you don't have a problem with it being socialised onto irish taxpayers?
You're not happy to discomfit hundreds of millions of our "European partners" who are meant to have responsibilities towards us in exchange for relinquishing decision making to them , but you're happy to have the 1.8 million taxpayers here pay this burden for generations to come?
there must be something I'm missing here0 -
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Tax Income == Expenditure on running the state
everything else well tough titty :P
Defaulting would hit the income side with companies going under but on the flip-side not having to pay out interest would cut the expenditure side too
an overnight adjustment (as opposed to the SFs default and go cap in hand for more money
), bring it on ... now where are my beans and shotgun 0 -
The claim has certainly been made, but I find that whenever I ask why default is inevitable, the answer I get is that the debt's too big. When I ask how the debt's too big, I'm told that it's because it's so big that it will force us to default.
Scofflaw
Its not about the size of the debt but ability to repay
the current course of action is based on optimistic forecasts
If the economy does not grow as forecasted we simply wont be able to afford repayments and the interest on all this debt
Then whether we want to or not, we might have to default in some shape or form.
If we didnt take the banking debts on board then yes I could see how Ireland could get out of the mess while fixing the public finances mess, but i feel that default of some shape or form is all but inevitable now.
To make an example that everyone could understand:
Lets say we have a family called O'Rlandese :P
The wife is after loosing her job (due to her working for a scam artist) so family income is down, but the family continues to splash out on holidays, cars and expensive clothes and takes on more debt on top of their mortgage to finance the lifestyle they got used to. The family is spending 55K a year but only making 35K. But wait there is more this family adopted a son called El Banko :P but this new son has proven to have a drug habit and now the family is liable for several hundred thousand more and the rehab they send the son to called "Al Nama" to fix him up is sucking up more money.
The head of the family had a meeting with the bank and promised them that he will sell the family silver and brings their lifestyle under control, he also promises that the family income will grow, all in exchange for more debt which will have to be paid back.
Few years pass, the family pissed away the money on coke, the son wasted more money on hookers, and the family income has not grown as much as expected since the wife was not able to get a job.
Then what?0 -
By rejecting the principle of the EFSF as it stands. By refusing to co-operate with it. A member state boycotting the EFSF would be nothing short of heresy from a European point of view, but if that is the unilateral and forceful action that would be required, then it would have to be executed. It is irrefutably true that this would hurt Ireland more than it would hurt the core European economy, but it would damage the core economy nevertheless, to a degree that it would be repugnant to economic sensibility to let it occur. And don't forget, under the current crisis resolution mechanism, Ireland is walking to the gallows anyway, we might as well walk there trying to protest our case as walk there mutely.SkepticOne wrote: »You said earlier "In actual fact, the Europeans need to understand, in terms that are both forceful, unilateral and quite clear, that Ireland will not accept the current debt situation. Banking debt must be transferred to a central European vehicle [...]"
All very reasonable but what I want to know here is in what way do we make them understand in a "unilateral and forceful way that Ireland does not accept the debt situation". What action do you propose that would convince them of that?
I don't have a crystal ball, and this is all very much a discussion on probability, but notwithstanding the IMF's agreement with the Eurozone, it has to be said that the IMF has never turned down a request for assistance and I do not think they would reject an application for external assistance by Ireland in the event of talks with Frankfurt and Brussells breaking down.Remember you are advocating a "no" vote in the referendum. This means that if our bluff is called then we will default as we will have no access to other funds.
Absolutely; the point in advocating a no vote is not to convince Europeans and bondholders that we mean business, the point is that the current mechanism is unsustainable. It. can't. be done. If one is convinced that the consequences of a ''yes'' means disaster then surely one cannot logically, I would suggest, support a ''yes'' vote.It seems to me that if you are going to advocate a "no" vote then logically you must be prepared to take the consequences if you fail to persuade the other party of the wisdom of your position.
That's delving too deeply into the realm of conspiracy for my taste. Remember Hanlon's razor; Never attribute to malice that which can be adequately explained by stupidity. Remember also that the whole architecture of the EFSF was laid on the founding hope that its creation would mean that it would never actually be called upon. It was supposed to make the Eurozone too big to fail. It might have been a pretty dumb first principle, so it should come as no surprise to observe that it failed in that endeavour. I don't think anyone is still denying this.Those that framed the deal and then put pressure on Ireland to accept it knew exactly what they were doing. They knew it was not going to resolve the problem once and for all; it is a mistake to assume that that was the goal.
the bailout has nothing to do with Ireland's financial responsibilities toward its bondholders. Ireland created that responsibility itself.What it did achieve was that the banking debts have been contained for the next couple of years in Ireland rather than either have bondholders some European vehicle yet to be set up take the hit.0 -
However it does allow Ireland to meet that responsibility. Without the bailout the bondholders would take a hit. The bailout contains the banking crisis within Ireland.the bailout has nothing to do with Ireland's financial responsibilities toward its bondholders. Ireland created that responsibility itself.0 -
morally where do we get off demanding that Irish banking debt be socialised onto the taxpayers of all of Europe?
cordially,
Scofflaw
Morally, where does Europe get off demanding that ANY banking debt be socialised on to ANY taxpayers?
Private debt =/= public responsibiity. You might claim I'm beating out a slogan but it really is that simple in my mind, I can't honestly figure out a different way of phrasing this. Banks are *private* companies. Their stupidity is their own responsibility, not mine, yours, or any other un-involved taxpayer. I honestly fail to see why, when there is a problem between private banks and private bondholders, public money is even remotely connected in any way whatsoever. The private sector is not the government's responsibility to bail out. If they **** up, they **** up. Their mess, their problem.0 -
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No matter what type of assisance is provided to Ireland, bondholders will have to be repaid. In my opinion, the best way to address this issue is not by defaulting, but by having a Euro debt agency to buy up bank bonds on the secondary market and engaging in a maturity swap with the Irish Government. I don't even think that bondholders need to be brought into the room.SkepticOne wrote: »However it does allow Ireland to meet that responsibility. Without the bailout the bondholders would take a hit. The bailout contains the banking crisis within Ireland.
The bailout, as it stands is unacceptable. That doesn't have anything, in itself, to do with bondholders. It's another issue.0
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