We could be into the last 10 days of the Euro according to the Financial Times...

HellFireClub

Boulevardier wrote: »

"We have proven that we are capable of managing our own affairs when nudged in the right direction by Troika and IMF..."

This is a prime example of Euro-establishment doubletalk.

Either we can manage our own affairs or we can't. If we need to be "nudged" By anyone, then obviously we can't.

We have a Minister for Health who is cutting a departmental budget, under direction, but is only allowed to touch 30% of his departments budget, because the other 70% cannot be touched, as per the Croke Park Deal???

So we have a situation where hospital consultants on 300K salaries, and probably earning as much if not more in their private practices, cannot be touched. That isn't leadership and it isn't managing a problem, it's just digging a big hole for yourself.

I think that eventually people of this country will wake up and see the sheer insanity of what is going on here.

beeftotheheels

FreudianSlippers wrote: »

I would disagree. We have been left out of the PIIGS for months now (down to PIGS, I being Italy). We have proven that we are capable of managing our own affairs when nudged in the right direction by Troika and IMF, we have made meaningful attempts at austerity across part of the board... there is no real reason, other than the Irish people themselves, that if we don't get our act together in the next budget that we couldn't be a part of an inner Eurozone. Well, there are other reasons... but no reasons prima facie without knowing what/when/if a tiered Eurozone would look like or be in practice or if it would even happen.

There is just a lot of supposition on very little actual evidence.


IMO - the Euro goes nowhere, changes are made and they do not include an overtly tiered system. My point is merely that if there were a tiered system, we are not the worst offenders.

I never said that we were, and indeed if we'd had another year at this then we'd be first in line for making the core (of the naughty countries).

Given another year Italy too might get her house in order, given another year Belgium might have a government and the surplus that the Spanish regions are reporting might mean they get their deficit under control.

The problem is that we don't have another year. We have a pending global recession, we have sovereign bonds of pretty stable countries trading at discounts, we have banks now writing down those bonds and trying to raise capital in a hostile market. We have massive deleveraging and no lending.

What Europe needs is growth and modest inflation. What Europe is getting, and will export elsewhere, is contraction and deflation.

A proper fix requires changes to the treaties to deal with the SGP, the role of the ECB, and the prohibition on transfer unions. If these changes are required that requires Ireland to ratify them, a smaller multilateral treaty between some members doesn't help. Scofflaw's example of Schengen is therefore incorrect since it goes further than the treaties but does not breach them. Member States cannot bilaterally, or multilaterally, agree to breach the treaties.

To admit that such things can be done without changes to the current treaties would not only be tested in the German courts, but would also cause a huge loss of face by the core who have been insisting on austerity as the only option, and not just a political loss of face but a legal one since current policies have destroyed so much value all around Europe.

Rock, meet hard place.

whatstherush

To quote Faisal Islam "Germany's dividend from the currency it won't bailout:German Exports Soar above One Trillion Euros"

HellFireClub

beeftotheheels wrote: »

I never said that we were, and indeed if we'd had another year at this then we'd be first in line for making the core (of the naughty countries).

Given another year Italy too might get her house in order, given another year Belgium might have a government and the surplus that the Spanish regions are reporting might mean they get their deficit under control.

The problem is that we don't have another year. We have a pending global recession, we have sovereign bonds of pretty stable countries trading at discounts, we have banks now writing down those bonds and trying to raise capital in a hostile market. We have massive deleveraging and no lending.

What Europe needs is growth and modest inflation. What Europe is getting, and will export elsewhere, is contraction and deflation.

A proper fix requires changes to the treaties to deal with the SGP, the role of the ECB, and the prohibition on transfer unions. If these changes are required that requires Ireland to ratify them, a smaller multilateral treaty between some members doesn't help. Scofflaw's example of Schengen is therefore incorrect since it goes further than the treaties but does not breach them. Member States cannot bilaterally, or multilaterally, agree to breach the treaties.

To admit that such things can be done without changes to the current treaties would not only be tested in the German courts, but would also cause a huge loss of face by the core who have been insisting on austerity as the only option, and not just a political loss of face but a legal one since current policies have destroyed so much value all around Europe.

Rock, meet hard place.

It's kind of simple really I think, there's the rules, 3% is the limit that is there, all they have to do is implement it without fear or favour to any government and the problem would eventually right itself. If they can't even accomplish this simple enough transaction, how competent really are the EU Commission and the Council of Ministers?!? It's like some kind of really messed up "light touch and a bit of whatever you are having yourself", regulation gone bad.

Like the clue is in the pact title, Stability and Growth, but it's clear enough at this stage that these guys can't even enforce the simplist and most fundamental of rules, that have already been agreed here, without making a complete and utter disasterous balls of the whole EU project.

I'm not surprised the financial markets have priced in the probability of this whole thing collapsing, when you stand back for a second and look at the sheer scale of the incompetence that is at play here...

Scofflaw

beeftotheheels wrote:

A proper fix requires changes to the treaties to deal with the SGP, the role of the ECB, and the prohibition on transfer unions. If these changes are required that requires Ireland to ratify them, a smaller multilateral treaty between some members doesn't help. Scofflaw's example of Schengen is therefore incorrect since it goes further than the treaties but does not breach them. Member States cannot bilaterally, or multilaterally, agree to breach the treaties.

I'm not suggesting my speculative scenario as a proper fix, though - the whole point is that it's a quick fix, not a proper one. It doesn't change the S&G Pact - it goes beyond it, but doesn't breach it (hasn't it been replaced?). It doesn't change the role of the ECB either - the "lender of last resort" role is filled in to some extent by mutual backup. And I'm not sure the prohibition on transfers in the EU Treaties would prove to be a stone wall either.

As I said, though, it isn't a proper fix by any stretch.

cordially,
Scofflaw

beeftotheheels

Scofflaw wrote: »

I'm not suggesting my speculative scenario as a proper fix, though - the whole point is that it's a quick fix, not a proper one. It doesn't change the S&G Pact - it goes beyond it, but doesn't breach it (hasn't it been replaced?). It doesn't change the role of the ECB either - the "lender of last resort" role is filled in to some extent by mutual backup. And I'm not sure the prohibition on transfers in the EU Treaties would prove to be a stone wall either.

As I said, though, it isn't a proper fix by any stretch.

cordially,
Scofflaw

Nope, not the S&G (and its really only Arts 121 & 126 you'd be concerned about since the S&G pact isn't in the treaty) but

Art 125(1) wrote:

The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.

If you interpret this, as the Germans have done to date, then it precludes any safe bonds. If, in the alternative, you view the protection of the eurozone as being a specific project then the question becomes whether it should always have been treated thus.

It is a fudge, and a fudge that will wind Germany up in court, both domestically and possibly from creditors of e.g. Italy.

It is probably a necessary fudge, but I'm not sure its enough at this stage in the game when investors are clamoring for some kind of certainty.

Permabear

This post has been deleted.

Scofflaw

beeftotheheels wrote: »

Nope, not the S&G (and its really only Arts 121 & 126 you'd be concerned about since the S&G pact isn't in the treaty) but



If you interpret this, as the Germans have done to date, then it precludes any safe bonds. If, in the alternative, you view the protection of the eurozone as being a specific project then the question becomes whether it should always have been treated thus.

It is a fudge, and a fudge that will wind Germany up in court, both domestically and possibly from creditors of e.g. Italy.

It is probably a necessary fudge, but I'm not sure its enough at this stage in the game when investors are clamoring for some kind of certainty.

Perhaps I should go beyond "not proper" and say "downright improper"...I'm sure it would be legally tested. Hmm...could you stretch the definition of 'specific project' to issuing debt for a specified purpose?

cordially,
Scofflaw

Valmont

Ok ok slow down a second for me here. When we talk of "action" being taken and "the gloves of legality coming off", "eurobonds", "monetisation", are we essentially referring to the fact that the EU will turn on the printing presses before it all goes to crap, right? The obfuscatory discourse surrounding the whole mess is giving me a headache.

What are our choices? More power for the EU or new magic money? Is there another option? Should we be happy?

murphaph

beeftotheheels wrote: »

snip

Not sure if you endited Scofflaw's post or he did but anyway, Merkel is not East German. Her father was a protestant pastor who moved to East Germany to work in a parish, bringing the wife and young Angie with him. They come from Hamburg afaik, certainly somewhere in the former West.

hatrickpatrick

Permabear wrote: »

This post had been deleted.

Permabear, I put it to you that even abolishing social welfare and abolishing the minimum wage would be exactly what you accuse my "burn the buddies" campaign of - nothing more than a moral victory.

Even completely abolishing social welfare wouldn't get Ireland out of the mess its in. Your (and others reading from the same hymn sheet) vendetta against what you perceive to be "lazy hippie scroungers" is no more pragmatic than my vendetta against what I perceive to be white collar criminals being protected by their friends in high places.

Just throwing that out there. You accuse my campaign of being irrational and "not actually solving Ireland's problems" but yours is exactly the same. In my view, mine at least has a sound moral justification, but that's irrelevant to this discussion.

When I campaign for bondholders, former managers, executives, and politicians to be burnt by the taxpayer, I at least don't pretend that would be a magic bullet to actually solve the problems Ireland faces. I'm honest about my campaign being nothing more than a mater of principle, of justice, of morality.

For you to tout yours as something which would automatically solve Ireland's problems is, in my opinion, deeply dishonest.

Blowfish

hatrickpatrick wrote: »

Even completely abolishing social welfare wouldn't get Ireland out of the mess its in.

Actually, given that the social welfare bill last year was €20 billion and the current deficit is €18 billion, it would do it quite nicely.

In any case, given that Permabear simply mentioned bringing it in line with Europe, it really doesn't seem to be the drastic proposition you are making it out to be.

Incidentally, given that the politicians are protected by the CPA too, 'burning' them as you suggest would require abolishing it.

View

Boulevardier wrote: »

"We have proven that we are capable of managing our own affairs when nudged in the right direction by Troika and IMF..."

This is a prime example of Euro-establishment doubletalk.

Either we can manage our own affairs or we can't. If we need to be "nudged" By anyone, then obviously we can't.

Since the IMF/EU are here, it should be fairly obvious that it was a case of "We couldn't".

That doesn't mean it will remain so in the future (unless we really try to keep making a mess of things that is).

The IMF doesn't do what the Financial Times' Lex columnist suggested a few months back, namely a "corporate style take-over" of the worst Eurozone states by the better ones - just re-brand us as "The Netherlands West" and roll our debt up as part of the Dutch one and our debt problem just disappears.

View

HellFireClub wrote: »

It's kind of simple really I think, there's the rules, 3% is the limit that is there, all they have to do is implement it without fear or favour to any government and the problem would eventually right itself. If they can't even accomplish this simple enough transaction, how competent really are the EU Commission and the Council of Ministers?!? It's like some kind of really messed up "light touch and a bit of whatever you are having yourself", regulation gone bad.

Like the clue is in the pact title, Stability and Growth, but it's clear enough at this stage that these guys can't even enforce the simplist and most fundamental of rules, that have already been agreed here, without making a complete and utter disasterous balls of the whole EU project.

I'm not surprised the financial markets have priced in the probability of this whole thing collapsing, when you stand back for a second and look at the sheer scale of the incompetence that is at play here...

They are "enforcing" it - Excessive Deficit Procedures are open against 25 of the 27 EU member states. It is only at the end of that procedure - if the member state concerned has refused to fix the problem - that the issue of fines for the member state concerned arises (Fining someone in the middle of a budget crisis just adds to the problem).

Yahew

Permabear wrote: »

This post had been deleted.

That could be in anticipation of a breakup ( although not one in 7 days). That is the Euro is trending higher because the core is expected to remain.

FreudianSlippers wrote: »

On the contrary, the end of the Euro for us will mean years of crippling economic depression, drastic reductions in social welfare payments and other severe austerity measures simply to "keep the lights on".

This is nonsense. Devaluations are sharp short shocks which distribute the pain equally ( unlike wage devaluations which harm workers and protect savers and capitalists). Inflation hits the system, but Ireland's exports are dirt cheap, and within a year will lead to actual growth in the economy. No lights go out, the currency finds it's level, and Irish workers regain competitiveness not in the slow drip feed of a long drawn out depression, but a quick sharp shock. Its like lancing the boil.

All hail Golden Wednesday.



The effect of the high German interest rates, and high British interest rates, had been arguably to put Britain into recession as large numbers of businesses failed and the housing market crashed. Some commentators, following Norman Tebbit, took to referring to ERM as an "Eternal Recession Mechanism"[6] after the UK fell into recession during the early 1990s. Whilst many people in the UK recall 'Black Wednesday' as a national disaster, some conservatives claim that the forced ejection from the ERM was a "Golden Wednesday"[7] which paved the way for an economic revival, the Conservatives handing Tony Blair's New Labour a much stronger economy in 1997 than had existed in 1992[8]as the new economic policy swiftly devised in the aftermath of Black Wednesday led to re-establishment of economic growth with falling unemployment and inflation (the latter of which had already been falling before Black Wednesday).[9]

Devaluations are

Permabear

This post has been deleted.

hatrickpatrick

Permabear wrote: »

This post had been deleted.

Agreed. But we still would have had a property crash, and the worldwide credit crunch would still have taken hold. The economy would still be in trouble, just not as much trouble.

If Ireland had done these things in 2008, we would not be in the mess that we are in at present. By tying the banks to the state, by signing the Croke Park Agreement, and by maintaining social welfare payments at levels up to three times the UK equivalent, the Irish government only ensured that the aftershocks of this crisis will continue for decades.

Again, agreed.

You can moralize away — I'm talking about the financial reality that by 2015, Ireland will have a national debt of 125 percent of GDP. That is more than Italy at present, which we are told is unsustainable.

And you are suggesting that slashing social welfare, public pay, and reducing the minimum wave would be a magic bullet which would automatically solve all of these problems?
Funny, you made no mention whatsoever of bank bailouts or anything else in your original post. You were being just as dishonest as you accuse me of being. Trumpeting that attacking those on the dole is going to solve all of Ireland's problems overnight is absolutely daft, and that is certainly what you were implying in that post.

I'm not denying it would help, but we'd still be f*cked even if it was completely abolished in this budget. There are much deeper and more complicated problems in Ireland right now.

Again, your vendetta against those on SW is similar to my vendetta against the 1%. It's largely a moral battle, a matter of principle - which you should know, I as much as anyone here wholeheartedly believes in.

I'm merely pointing out that you should admit as such, rather than hiding behind a phoney argument of "if we slashed welfare there would be no recession". IRonically, you accuse ME of implying that if we dumped all the bondholders and former croneys out onto the street it would magically fox our economy, but I have never once done this in any thread or post here. Yet you just did, with regard to your own expenditure campaign.

Bit underhand in my view. IF you want to use that argument then that's fine, but kindly refrain from attacking mine as "not going to fix the problem overnight" in future. It's just as moral as yours is, and at least I never claimed mine was a be all and end all practical solution to the crisis.

View

Yahew wrote: »

This is nonsense. Devaluations are sharp short shocks which distribute the pain equally ( unlike wage devaluations which harm workers and protect savers and capitalists). Inflation hits the system,

You might want to think about how a devaluation distribute pain a bit more because it certainly wouldn't be equally.

Think about it, Joe owns a small business which does 1 million Euro in exports to France (and the price is agreed under French law as the French companies involved are the bigger parties). Based on that Joe's business is valued at 10 million Euro by Tom - a potential buyer - who offers that in cash.

Overnight the government re-introduces the Irish Pound on a 1:1 basis (i.e. 1 Euro = 1 Pound) so Tom now has 10 millions pounds in his account. When the markets open the pound plummets and by the end of the week, 1 Euro will buy 1.25 Pounds.

Joe is not now going to sell Tom his business for 10 million Pounds now (given its drop wrt to the Euro), instead he will want 12.5 millions Pounds for it. Leave it another few weeks and, as the trend will probably continue, he might want 13, 14 or even 15 million Pounds for it - and yes, the business would be worth it, as it is earning money in Euro not depreciating Pounds.

In this case, Joe and his business are clear winners here and Tom and his cash are clear losers.

Pain is not distributed equally in the event of a devaluation and that is even before you factor in that some parts of the non-exporting economy will be able to protect themselves against the effects of high inflation more easily than others.

PS Irish exports are currently at record highs so clearly our currency isn't a problem for our export orientated industries. Our problem lies with our protected sector (i.e. public) who are largely insulated from economic reality and our domestic orientated industries most of which are suffering the after-effects of the construction industry crash.

Permabear

This post has been deleted.

Kivaro

Permabear wrote: »

This post had been deleted.

I wonder why the general populace does not see that this is excessive.

meglome

irishh_bob wrote: »

This post had been deleted.

haha. I just hate it when people say things they cannot back up based on what appears to be their own bias.

Sure I like the EU generally but doesn't mean I'd disagree with you if I thought you'd said something factual. I see plenty of people saying things for years which they might eventually be right on but it won't be from any great insight or precognition. They'll just keep saying things until something actually happens.

Permabear wrote: »

This post has been deleted.

Agreed. People like to frame this argument as moral vs. immoral. Morality doesn't come into it, it's only whether it's affordable, which it clearly isn't.

FreudianSlippers

Blowfish wrote: »

Actually, given that the social welfare bill last year was €20 billion and the current deficit is €18 billion, it would do it quite nicely.

In any case, given that Permabear simply mentioned bringing it in line with Europe, it really doesn't seem to be the drastic proposition you are making it out to be.

Incidentally, given that the politicians are protected by the CPA too, 'burning' them as you suggest would require abolishing it.

Sure, we could even take a 1 year break from paying SW and things would be much better.

Boulevardier

I'm betting not many people on this thread are on SW.

Lads, how about a whopping increase in income tax instead? Yes, I know, you will give us good reasons why that is a bad idea. Right.

carveone

Boulevardier wrote: »

I'm betting not many people on this thread are on SW.

I am. Well, am now! (boards.ie anonymity is great!) The way I figure my finances is that if I had rent allowance, I'd be grand. More than grand actually, I'd be doing rather well. If I had allowance, med card, fuel allowance I'd pick my teeth for the next 10 years. Except my friends would beat me up.

As it is I'm on about 80 quid a week, currently leaving me short some months, cutting into my savings. But it's not by a major amount. Once I'd dropped the VHI I could even afford doctor's appointments I figure I could take a 10 or 20 quid hit/wk without getting too upset. Bit of a motivator what?! I could take bins out every 2 weeks or mow lawns which would cover me pretty easily.

Permabear

This post has been deleted.

View

Permabear wrote: »

This post had been deleted.

The closer to Armageddon we get, the happier the financial markets are - that sounds about right for them.

Killer Pigeon

Apparently financial markets have surge upwards after central banks around the world announced measured to boost liquidity in world economy to prevent a new global credit crunch. Sounds a bit like handing out buckets to passengers to prevent the Titanic from sinking. Central Banks are very nervous, the end is nigh, etc..

http://www.guardian.co.uk/business/2011/nov/30/world-central-banks-act-credit-crunch

Mr.Micro

View wrote: »

The closer to Armageddon we get, the happier the financial markets are - that sounds about right for them.

The traders would sell their own children for a profit on the day, and tomorrow is another day.

HicksLennon

HellFireClub wrote: »

A year ago, this thread would likely have been locked and I'd probably have been handed a ban for stirring sh*t on the forum. Yet fast forward a year and there it is today in the FT, in the SBP yesterday, that the break up of the Euro is a probability at this stage, let alone a possibility.

Well said my friend!! People everywhere are finally waking up to reality!!

FreudianSlippers

I still wouldn't call it a probability. I still say it's highly unlikely the Euro is going to "break up" - there may very well be some changes to its structure though.