Make your voice heard: Response needed from ECB on Anglo Irish Debt Burden

makeorbrake

Farmer Pudsey wrote: »

I tried to use link but it is down anybody have e-mail address and copy of mail

See post no.48 above.

Farmer Pudsey wrote: »

Even if we cut Civil Service wage bill by another 10-15% reduce dole by 30% and delete extra to pensioners we cannot recover we need growth and it will not happen for the next 3-5 years if we continue as we are doing.

These are issues in their own right - the first one of which is the most obvious but also, it's the elephant in the room - and no administration (neither past nor present) really has the moral fibre to tackle it.

Farmer Pudsey wrote: »

reduce dole by 30% and delete extra to pensioners

Doesn't sit as well with me - but I guess dole will have to be cut - BUT - despite the recession, this remains a very expensive country to live in. For the same rationale, I am even more reluctant to see pensioners being hit.

makeorbrake

Scofflaw wrote: »

Hmm...if I have to choose between an analyst who says a country followed a textbook example, and the Finance Minister of said country, who says people should not use their decisions as a textbook, I think I'm forced to go with the latter.

Because, after all, the analyst is only analysing the decisions of the Minister. And from a perspective where he doesn't have to make those decisions, or live with the consequences.

cordially,
Scofflaw

You raise an interesting point - and one that can be drawn upon when taking the Bloomberg synopsis of the situation into consideration. I am referring specifically to the 'people vs. markets' section of that article. Please also be aware that it wasn't just people vs. markets - but people vs. the political establishment - as if memory serves me correctly, the people went against the advise/recommendations of their political leaders in not one but two refernda.

In considering this element of the Icelandic crisis in the context of our own situation, we elected 2 parties - both of whom campaigned strongly on re-negotiation ("Berlins way or Labours way" - anyone recall that little soundbite?....and then there was Enda's choreographed trip to Berlin pre-election), then swiftly turned round to the electorate and said they couldn't renegotiate something that had already been agreed. IF they believed this, then it was totally unethical and disingenuous to get themselves elected on a mandate to do exact that!

K-9

Farmer Pudsey wrote: »

Even if we cut Civil Service wage bill by another 10-15% reduce dole by 30% and delete extra to pensioners we cannot recover we need growth and it will not happen for the next 3-5 years if we continue as we are doing.

For every 1% of Government spending taken out of an economy, growth is cut by .5/.6%. I can't see any alternative to little or no growth in the next few years and what growth we have will be exports, that don't create much jobs, this isn't the 80's and early 90's anymore.

.We now have an effective top rate of tax at 53% Vat is at 23% for a country with no public transport we have expensive fuel ( I know France ,Germany GB etc are more exensive) but we depend on out cars more and as much tax as we can put on drink and cigs

I'd agree with that, we are getting close to 80's levels of taxation which everybody knows failed. Highly paid Public Servants are paying over 60% marginal tax, PRSI etc., not good.

Even if the household charge gets off the blocks and at present I cannot see it suceeding or if it get going it will be at a low rate for a long time the reality is that if you take 100 euro out of a worker's pocket at present he will cut back other expenditure by that amount

He/she will, as will a SW recipient, PS payroll staff etc.because they know more cuts are coming.

Scofflaw

makeorbrake wrote: »

You raise an interesting point - and one that can be drawn upon when taking the Bloomberg synopsis of the situation into consideration. I am referring specifically to the 'people vs. markets' section of that article. Please also be aware that it wasn't just people vs. markets - but people vs. the political establishment - as if memory serves me correctly, the people went against the advise/recommendations of their political leaders in not one but two refernda.

To be fair, this:

Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

isn't actually "people versus markets". I'm speaking as someone with friends who would have lost their life savings in Icesave had the UK government not stepped in.

It's "people versus other people". I can understand Iceland acting to save the money of their own citizens at the expense of those of other countries, but I wouldn't regard calling it "people versus markets" as anything but incorrectly glorifying a nationally selfish decision.

cordially,
Scofflaw

makeorbrake

Scofflaw wrote: »

To be fair, this isn't actually "people versus markets". ......I can understand Iceland acting to save the money of their own citizens at the expense of those of other countries, but I wouldn't regard calling it "people versus markets" as anything but incorrectly glorifying a nationally selfish decision.

Depends on how you look at it. You deem it to be a "nationally selfish decision". I would be of a mind to consider it people acting in the national interest - and yes, that is their interest - and there's nothing selfish about that given what was at stake for them.

Scofflaw

makeorbrake wrote: »

Depends on how you look at it. You deem it to be a "nationally selfish decision". I would be of a mind to consider it people acting in the national interest - and yes, that is their interest - and there's nothing selfish about that given what was at stake for them.

Had the activities of the Icelandic banks been of no value to the Icelandic economy - and thereby to the Icelandic people - and had their decision to let foreign depositors of those banks go hang had no adverse consequences for those people, I might agree.

As it is, it's as I said - this was a selfish decision which is being lauded as some kind of David and Goliath battle, but whose effects would have been to destroy the life savings of ordinary people who put them in Icelandic banks in good faith.

One can agree with the decision or not on that basis, but celebrating it without any reference to its effects on others is setting up a false idol.

cordially,
Scofflaw

makeorbrake

Scofflaw wrote: »

One can agree with the decision or not on that basis, but celebrating it without any reference to its effects on others is setting up a false idol.

Yes, I appreciate that this debacle involved ordinary decent people in the UK. However, lets relate this back to Anglo - which is essentially what this thread is concerned with. Are Irish people of a mind that they benefited from the upswing at Anglo in the same way the Icelandic people benefited from the upswing (for the purposes of relating this back to the original subject, I won't dispute this with you...despite the fact that I would imagine there would no doubt be a proportion of Icelanders who wouldn't agree with you on this) of their banks? Furthermore, following the banks demise, are they of a mind that they should pick up the tab for anonymous bondholders who knowingly speculated at their own risk?



A referendum on this would have given you - in no uncertain terms - an emphatic answer.

Liam Byrne

Scofflaw wrote: »

makeorbrake wrote: »

You raise an interesting point - and one that can be drawn upon when taking the Bloomberg synopsis of the situation into consideration. I am referring specifically to the 'people vs. markets' section of that article. Please also be aware that it wasn't just people vs. markets - but people vs. the political establishment - as if memory serves me correctly, the people went against the advise/recommendations of their political leaders in not one but two refernda.

To be fair, this:

Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

isn't actually "people versus markets". I'm speaking as someone with friends who would have lost their life savings in Icesave had the UK government not stepped in.

It's "people versus other people". I can understand Iceland acting to save the money of their own citizens at the expense of those of other countries, but I wouldn't regard calling it "people versus markets" as anything but incorrectly glorifying a nationally selfish decision.

cordially,
Scofflaw

The problem is that it's not about "saving" the money - it's about getting others to pay it back in, and in general those are people who don't have it to share.

If the FF & Green decisions had "saved" money, there would have been little objection.

It's the fact that they forced the rest of us to pay for losses incurred - particularly in a cesspit bank that no-one dealt with - that sickens people.

Scofflaw

makeorbrake wrote: »

Yes, I appreciate that this debacle involved ordinary decent people in the UK. However, lets relate this back to Anglo - which is essentially what this thread is concerned with. Are Irish people of a mind that they benefited from the upswing at Anglo in the same way the Icelandic people benefited from the upswing (for the purposes of relating this back to the original subject, I won't dispute this with you...despite the fact that I would imagine there would no doubt be a proportion of Icelanders who wouldn't agree with you on this) of their banks? Furthermore, following the banks demise, are they of a mind that they should pick up the tab for anonymous bondholders who knowingly speculated at their own risk?

And that, in turn, is another reason why drawing parallels between Ireland and Iceland doesn't necessarily work. Anglo had neither small Irish depositors to protect, nor small foreign depositors to harm.

makeorbrake wrote: »

A referendum on this would have given you - in no uncertain terms - an emphatic answer.

I'm sure it would - but as the Icelandic referendums could be said to show, the result would be about the benefit of those voting.

cordially,
Scofflaw

makeorbrake

Scofflaw wrote: »

And that, in turn, is another reason why drawing parallels between Ireland and Iceland doesn't necessarily work. Anglo had neither small Irish depositors to protect, nor small foreign depositors to harm.

Sure - but in looking at that aspect of it, does that not make it even clearer - the action that should have been taken? i.e. burn the bondholders!

Scofflaw wrote: »

I'm sure it [a referendum] would - but as the Icelandic referendums could be said to show, the result would be about the benefit of those voting.

I agree completely that the result would be about the benefit of those voting! Isn't that what government is supposed to do - represent the people, and more specifically, act on the clear mandate the people have given them? You seem to feel that there would be something wrong in the Irish people acting in their interests - that this is somehow selfish? I don't see it in any way as selfishness.

Scofflaw

makeorbrake wrote: »

Sure - but in looking at that aspect of it, does that not make it even clearer - the action that should have been taken? i.e. burn the bondholders!

Sure, my only objection to that route has been based on practical consequences. Had Anglo been immediately separated from the other banks and clearly been slated for a resolution process, then we could probably have achieved senior bondholder haircuts here with Icelandic levels of consequences. Unfortunately, the government didn't have the necessary knowledge of either Anglo's position or the extent and duration of the crisis to make such a call at the necessary time.

makeorbrake wrote: »

I agree completely that the result would be about the benefit of those voting! Isn't that what government is supposed to do - represent the people, and more specifically, act on the clear mandate the people have given them? You seem to feel that there would be something wrong in the Irish people acting in their interests - that this is somehow selfish? I don't see it in any way as selfishness.

I can see you don't, but foreigners are people too - and that's not something it should be necessary to say, but it appears it is.

cordially,
Scofflaw

makeorbrake

Scofflaw wrote: »

Unfortunately, the government didn't have the necessary knowledge of either Anglo's position or the extent and duration of the crisis to make such a call at the necessary time.

When this current administration took over, they had that knowledge - and they were elected on a mandate to roll back from that position. As I eluded to in an earlier post, they played heavily on this in both of their respective election campaigns.

Scofflaw wrote: »

I can see you don't, but foreigners are people too

'Foreigners' have nothing as such to do with it. Large european institutions who clearly engaged in highly speculative risk have everything to do with it.

Scofflaw wrote: »

foreigners are people too - and that's not something it should be necessary to say, but it appears it is.

Once again, looking after our national interests is positive - and not some sordid act or deed taken against the citizens of another european country. Furthermore, it's naive in the extreme to think that other member states would act in such an altruistic fashion - at the expense of their respective national interests.

Scofflaw

makeorbrake wrote: »

When this current administration took over, they had that knowledge - and they were elected on a mandate to roll back from that position. As I eluded to in an earlier post, they played heavily on this in both of their respective election campaigns.

Eh, election promises.

makeorbrake wrote: »

'Foreigners' have nothing as such to do with it. Large european institutions who clearly engaged in highly speculative risk has everything to do with it.

To do with Icesave depositors in the UK and Holland being stiffed? I don't think so.

But then, if you're claiming that's what was at stake in respect of Irish banks, I'd be very interested to see the evidence for what you're saying, because I've done a lot of research on the topic and any major role for "large European institutions" in Irish banks remains without evidence.

makeorbrake wrote: »

Once again, looking after our national interests is positive - and not some sordid act or deed taken against the citizens of another european country. Furthermore, it's naive in the extreme to think that other member states would act in such an altruistic fashion - at the expense of their respective national interests.

Apart from little things like lending billions of euro at less than market rates, of course.

cordially,
Scofflaw

makeorbrake

Scofflaw wrote: »

Eh, election promises.

Sure - election promises. So you except that they were given said mandate by the people and simply chose to ignore it? Given that you have aluded to a 'sense of fairness' as regards Ireland Inc honouring its commitments (regardless of affordability), maybe you can focus it on this aspect. Why should it be acceptable that the current administration can simply ignore the electorate in relation to a key and principal issue which led to their election?

Scofflaw wrote: »

To do with Icesave depositors in the UK and Holland being stiffed? I don't think so.

Ok, your returning to the Iceland scenario...thats fine. You have highlighted that 'foreigners are people too'. On that basis, please place yourself in the position of an Icelandic national - at the time they were faced with this decision. I don't disregard the effect that this could have had on ordinary UK/Dutch deposit holders. However, does that mean that as an Icelandic national, you would agree to do the honourable thing regardless of affordability and the direct consequences??

Scofflaw wrote: »

But then, if you're claiming that's what was at stake in respect of Irish banks, I'd be very interested to see the evidence for what you're saying, because I've done a lot of research on the topic and any major role for "large European institutions" in Irish banks remains without evidence.

Fair enough - so I guess the first step here is disclosure, right?

Scofflaw wrote: »

Apart from little things like lending billions of euro at less than market rates, of course.

Less than market rates? And has anything discussed here contributed to said market rates? Furthermore, has anything discussed here contributed to the need to borrow?

View

makeorbrake wrote: »

Once again, looking after our national interests is positive

I suspect that members of our democratically elected Oireachtas probably believe that they are "looking after our national interests".

Obviously your opinion of what this entails would seem to differ from (a democratic majority of) theirs.

makeorbrake

View wrote: »

I suspect that members of our democratically elected Oireachtas probably believe that they are "looking after our national interests".

Obviously your opinion of what this entails would seem to differ from (a democratic majority of) theirs.

Can I per-chance draw your attention to the irony in this? The current administration chose to carry out an immediate u-turn on not just something they were passively in favour of (i.e. renegotiation) - but something that they actively campaigned for. They were elected on the back of it. You draw particular emphasis to them being 'democratically elected' - and perhaps you think that I believe otherwise? That is not the case - I completely agree with you here - in fact, I emphasise it - as it makes the point - the point being - they were elected on the back of that mandate (to renegotiate) and the moment they were elected, they said they wouldn't.

K-9

makeorbrake wrote: »

Can I per-chance draw your attention to the irony in this? The current administration chose to carry out an immediate u-turn on not just something they were passively in favour of (i.e. renegotiation) - but something that they actively campaigned for. They were elected on the back of it. You draw particular emphasis to them being 'democratically elected' - and perhaps you think that I believe otherwise? That is not the case - I completely agree with you here - in fact, I emphasise it - as it makes the point - the point being - they were elected on the back of that mandate (to renegotiate) and the moment they were elected, they said they wouldn't.

When challenged on it by FF and others they admitted any settlements would have to be within an agreed European approach.

Scofflaw

makeorbrake wrote: »

Sure - election promises. So you except that they were given said mandate by the people and simply chose to ignore it? Given that you have aluded to a 'sense of fairness' as regards Ireland Inc honouring its commitments (regardless of affordability), maybe you can focus it on this aspect. Why should it be acceptable that the current administration can simply ignore the electorate in relation to a key and principal issue which led to their election?

No, I'd point out that they were clear it would only happen as part of an agreed Europe-wide strategy, and that they'd be paying back the outstanding bondholders because the amounts involved were (relatively speaking) too small to make it worth undoing any good paying back the previous 95% of bonds had achieved.

makeorbrake wrote: »

Ok, your returning to the Iceland scenario...thats fine. You have highlighted that 'foreigners are people too'. On that basis, please place yourself in the position of an Icelandic national - at the time they were faced with this decision. I don't disregard the effect that this could have had on ordinary UK/Dutch deposit holders. However, does that mean that as an Icelandic national, you would agree to do the honourable thing regardless of affordability and the direct consequences??

I'd find it pretty hard to look my British friends in the eye afterwards if I didn't.

makeorbrake wrote: »

Fair enough - so I guess the first step here is disclosure, right?

Most of the information necessary is already available. You won't get names, but you can get locations.

makeorbrake wrote: »

Less than market rates?

Average of 3.7% last time I looked, on bonds with a 7.5 year average maturity. Not sure our rates have ever been that low.

makeorbrake wrote: »

And has anything discussed here contributed to said market rates? Furthermore, has anything discussed here contributed to the need to borrow?

The banks, obviously, although far less than is usually made out - but what has that to do with those lending us the money at less than market rates?

cordially,
Scofflaw

makeorbrake

K-9 wrote: »

When challenged on it by FF and others they admitted any settlements would have to be within an agreed European approach.

scofflaw wrote:

No, I'd point out that they were clear it would only happen as part of an agreed Europe-wide strategy...

From the Fine Gael election manifesto.

scofflaw wrote:

I'd find it pretty hard to look my British friends in the eye afterwards if I didn't.

I'm sorry but you and I will have to agree to differ on this one. If it was a burden that could be easily carried, then fine - but what was being asked of Icelandic nationals was outrageous. Depositors have gotten stung before and they will again. It's regulation that needs to be looked at (as we know to our own cost) as indebting a generation of ordinary decent people is not an acceptable solution. I accept that ordinary decent savers being burned is equally unacceptable - but joe public cannot be saddled with the burden - that's not an acceptable fix.

scofflaw wrote:

Most of the information necessary is already available. You won't get names, but you can get locations.

You have any links?

scofflaw wrote:

The banks, obviously, although far less than is usually made out - but what has that to do with those lending us the money at less than market rates?

Perhaps it would negate the extent to which we needed funding in the first place?

View

makeorbrake wrote: »

Can I per-chance draw your attention to the irony in this? The current administration chose to carry out an immediate u-turn on not just something they were passively in favour of (i.e. renegotiation)

It is up to the government to decide what constitutes a "renegotiation" - not you or I. It is also up to them to decide both if and when they should seek to engage in any renegotiation. You seem to have a view of what the government "must" do that is at variance with what is specified in the constitution.

makeorbrake wrote: »

- but something that they actively campaigned for. They were elected on the back of it. You draw particular emphasis to them being 'democratically elected' - and perhaps you think that I believe otherwise? That is not the case - I completely agree with you here - in fact, I emphasise it - as it makes the point - the point being - they were elected on the back of that mandate (to renegotiate) and the moment they were elected, they said they wouldn't.

When exactly did they state "they wouldn't" (i.e. rule out completely the option of a renegotiation)?

You do realise that a renegotiation is not a unilateral procedure and that all parties have to agree to any new terms, such as interest rate reductions etc. (which have happened I believe)?

Were the government to find that - for instance, France - has set as a negotiation condition that Ireland must raise its corporation tax rate to, let's say, 30%, what are you suggesting the government do? Immediately call a general election in order to get a new mandate (i.e. not to renegotiate) or go "Well, the electorate instructed us to renegotiate so we'll just have to raise the corporation tax rate, I guess" because it "must" secure a renegotiate agreement even if it thinks it is not something they should accept?

Scofflaw

makeorbrake wrote: »

From the Fine Gael election manifesto.
I'm sorry but you and I will have to agree to differ on this one. If it was a burden that could be easily carried, then fine - but what was being asked of Icelandic nationals was outrageous. Depositors have gotten stung before and they will again. It's regulation that needs to be looked at (as we know to our own cost) as indebting a generation of ordinary decent people is not an acceptable solution. I accept that ordinary decent savers being burned is equally unacceptable - but joe public cannot be saddled with the burden - that's not an acceptable fix.

Except when it happens to other people, apparently.

makeorbrake wrote: »

You have any links?

Central Bank: http://www.centralbank.ie/polstats/stats/cmab/Pages/Money%20and%20Banking.aspx

Table A.4.2 is the aggregated balance sheets of the bailed out banks.

makeorbrake wrote: »

Perhaps it would negate the extent to which we needed funding in the first place?

Not by very much. For some reason people look at borrowing €24bn to put into the banks, and see it as higher than an annual deficit of €20bn, without stopping to recall that one is a once-off cost while the other is recurring, and has now been happening for 3 years.

If we had never had any problems with our banks, I imagine we would have had an easy ride in the markets, but the solution to that involves a time machine rather than default.

cordially,
Scofflaw

K-9

makeorbrake wrote: »

From the Fine Gael election manifesto.

Its a manifesto!

Its why we have political debates and other parties to pick holes in them, FF picked holes in the FG manifesto relating to bondholders.

I keep having to point this out on threads to posters who keep treating manifesto's as gospel!

makeorbrake

K-9 wrote: »

Its a manifesto! I keep having to point this out on threads to posters who keep treating manifesto's as gospel!

Manifesto: A written statement declaring publicly the intentions, motives or views of it's issuer.

scofflaw wrote:

Except when it happens to other people, apparently.

Referring specifically to what? Based on assumption or fact?

scofflaw wrote:

Not by very much.

I understand and appreciate that the running deficit is the bigger problem by a country mile. That said, I don't think we should treat €24Billion as chump change.

antoobrien

makeorbrake wrote: »

Manifesto: A written statement declaring publicly the intentions, motives or views of it's issuer.
Referring specifically to what? Based on assumption or fact?

It's nice to see somebody use Intentions rather than pledges or promises regarding the elections because that's what happens at elections: parties specify what they intend to do based on their current knowledge (which is incomplete in opposition).

When the "knowledge" that the original intention was made based on changes, the intentions can (and should) be reviewed.

I've no doubt that the government believed before the election that what they intended doing was practical, but that quickly changed when they got the objective facts of the matter.

I'd rather see this happening that a government blindly keeping to something they know to be impractical. Burning the (senior, unsecured) bondholders is far more trouble than it's worth.

K-9

makeorbrake wrote: »

Manifesto: A written statement declaring publicly the intentions, motives or views of it's issuer.

In a country with coalitions, rather redundant!

makeorbrake

K-9 wrote: »

In a country with coalitions, rather redundant!

so....if the intimation is that Labour weren't up for this, what did E.G. mean by 'Labours way - not Berlins Way'?
They both held this as a cornerstone of their proposition for government.

K-9

makeorbrake wrote: »

so....if the intimation is that Labour weren't up for this, what did E.G. mean by 'Labours way - not Berlins Way'?
They both held this as a cornerstone of their proposition for government.

But again when challenged on it by FF mostly, they admitted it would have to be in a European context. This is why people should watch debates, so opponents uncover any bull.

View

Perhaps we could adopt the following article from the French Constitution:

Article 27.

No Member shall be elected with any binding mandate.

It's clear cut and should reduce any confusion.

later12

As much as I disagree with Fine Gael and Labour's acquiescence in relation to Ireland's perceived responsibility in honouring some banking debt obligations, this matter is something we really need to move away from.

There is a far more serious and far more pressing issue which ought to be on the agenda concerning the Irish Government and the ECB, and that is the issue of how best to deal with ELA and the promissory notes going into Anglo/IBRC.

The next (second) such payment of €3.1 billion is due, I think, on March 31st and as a bilateral amendment to its terms and the terms surrounding our ELA obligations can in no conceivable way be said to directly threaten Ireland's sovereign standing, its immediate renegotiation is something that we ought all be pressing for, since it affects the debt sustainability of the Irish state in a way that renders the payment of remaining unsecured senior bondholders in all of the Irish banks relatively insignificant.

makeorbrake

Scofflaw wrote: »

There isn't anything the ECB can threaten to do to Ireland that doesn't hurt the ECB and the rest of the eurozone much much worse than it hurts Ireland.

There was though, wasn't there....