Recent Promissory Note Payment

Ritzcharlton

About the bond swap fiddle thing that took place last week. I admit I was delighted to hear the brief head line on the radio last Thursday, it sounded like the Trokia approved deferral of the loan, but looking into it a bit more it hardly seemed to be the coup that Michael Noonan (or a lot of the media) was making it out to be.

Without getting into the nitty-gritty of the deal, as it stands I believe we have honoured the promissory note with a loan from NAMA, which will be taken over by Bank of Ireland pending approval of the shareholders. So I have a couple of questions about this, please forgive my ignorance on matters economic:

Where did NAMA get this sizable pile of cash? Assuming it’s been raised from selling distressed property etc. wouldn’t it make more sense for the buck to stop here and have NAMA just destroy the bond- as the money has been raised through acquiring the loan book of Anglo et al, on the back of Government Bonds.

I assume the merit of getting BoI to chip in is that the state gets access to E3.1bn to squander as it pleases, without drawing down from the bailout fund, or having to go to the markets. I was always of the opinion that we will inevitably have to default in some fashion, assuming is a reasonably likely eventuality- wouldn’t it be more prudent to minimise the exposure of the countries only non-state controlled bank?

Why Bank of Ireland, why not some other fund? Would any other financial institution touch this?

I know that when you’re in debt it can be a good idea to jumble it around to suit your circumstance, but if some kind default is a likely outcome of this mess, wouldn’t it be better (if you were cynical) to keep drawing down from the bailout fund and eventually default on the EU/IMF?

beeftotheheels

My take on it.

A number of academics brought an idea to gov on restructuring which the ECB couldn't buy into. Not wouldn't, couldn't.

But the meedja had already picked up on these amazing proposals.

Anger was high about the household tax and the gov was worried about the referendum.

So they created a fudge to defer the payment for a year.

They could have created a fudge which didn't involve NAMA or BOI by PIKing into commercial paper (issuing 12 month paper to satisfy the interest rather than a 13 year bond) which could then have been repoed with a foreign bank (since said paper would mature while we're still in program and thus carries an implicit guarantee from the EFSF).

The Gov must have weighed up the political capital to be gained from talking about a 2025 bond (which necessitated the use of NAMA and BOI as no non-Irish investor could be guaranteed to want to hold a 13 year Irish Gov bond) as opposed to making clearer that all we can do without ECB agreement is to defer the payment for a year (which would have been obvious had they used 2013 paper).

We can't get ECB approval on the substantive issue until the role of the ECB is changed.

So yes this was a fudge, but a fudge necessitated by de meedja and academic economists.

Since most of the debate around the notes in Ireland, including by our esteemed academic economists, demonstrates a fundamental misunderstanding of what those instruments are and what they're ultimately going to cost us (the hole in IBRC whatever that turns out to be, no more and no less), the Gov must have hoped that any fudge would be as misunderstood as the notes it was fudging.

Personally I think it was worth a try.

Scofflaw

Ritzcharlton wrote: »

About the bond swap fiddle thing that took place last week. I admit I was delighted to hear the brief head line on the radio last Thursday, it sounded like the Trokia approved deferral of the loan, but looking into it a bit more it hardly seemed to be the coup that Michael Noonan (or a lot of the media) was making it out to be.

To be fair, I don't think Noonan made it out to be all that big a deal. The media cheering seemed to be on the misunderstanding that this was "the deal", and the trenchant criticism from elsewhere seemed to be based on the same error.

Ritzcharlton wrote: »

Without getting into the nitty-gritty of the deal, as it stands I believe we have honoured the promissory note with a loan from NAMA, which will be taken over by Bank of Ireland pending approval of the shareholders. So I have a couple of questions about this, please forgive my ignorance on matters economic:

Where did NAMA get this sizable pile of cash? Assuming it’s been raised from selling distressed property etc. wouldn’t it make more sense for the buck to stop here and have NAMA just destroy the bond- as the money has been raised through acquiring the loan book of Anglo et al, on the back of Government Bonds.

I presume they can't do that directly - NAMA is an off balance sheet vehicle, and I take it that the government, while it can get NAMA to loan the money, cannot get them to absorb the loss.

I assume the merit of getting BoI to chip in is that the state gets access to E3.1bn to squander as it pleases, without drawing down from the bailout fund, or having to go to the markets. I was always of the opinion that we will inevitably have to default in some fashion, assuming is a reasonably likely eventuality- wouldn’t it be more prudent to minimise the exposure of the countries only non-state controlled bank?

I don't think we'll default, but if we did so, there's no particular reason to default on BoI. Not, in the event of a default, that that would be top of the list of concerns, I think.

Why Bank of Ireland, why not some other fund? Would any other financial institution touch this?

Where else is our credit good?

I know that when you’re in debt it can be a good idea to jumble it around to suit your circumstance, but if some kind default is a likely outcome of this mess, wouldn’t it be better (if you were cynical) to keep drawing down from the bailout fund and eventually default on the EU/IMF?

That's probably the single worst possible outcome. It's like saying "wouldn't it be better to default on the Revenue than your landlord?", and the answer is no, not at all, not even slightly. It's far better to default on private sector debt, for exactly the same reasons as it's a better idea to default on your landlord than the Revenue.

Ireland is a country. We can't move it to the Cayman Islands under an assumed name. When all this is over, we still have to deal with the EU and the IMF.

cordially,
Scofflaw

later12

I agree with most of what Beeftotheheels has said, although perhaps not the point that we can't get movement from the ECB until the role of the ECB has changed. After all, the terms have been altered already before this latest deal (first in relation to interest) and I think the possibility of a deal which would preserve financial stability is not out of the question (though we are talking about a restructuring, not the possibility of a write-down)

Just in relation to one more point.

Ritzcharlton wrote: »

Where did NAMA get this sizable pile of cash? Assuming it’s been raised from selling distressed property etc. wouldn’t it make more sense for the buck to stop here and have NAMA just destroy the bond- as the money has been raised through acquiring the loan book of Anglo et al, on the back of Government Bonds.

NAMA got this money from the ECB last November when the EFSF was going through a bumpy period on the markets, on a request from the Government, who was wary of a small funding gap emerging on its timeline.

So this 'NAMA money' is ECB money, in effect.

beeftotheheels

later12 wrote: »

I agree with most of what Beeftotheheels has said, although perhaps not the point that we can't get movement from the ECB until the role of the ECB has changed. After all, the terms have been altered already before this latest deal (first in relation to interest) and I think the possibility of a deal which would preserve financial stability is not out of the question (though we are talking about a restructuring, not the possibility of a write-down.

Are you talking EFSF or ECB (LTRO)?

If EFSF then that entity can move, of course it can, but that entity can do nothing to help hinder or otherwise alter the amount of ELA which IBRC has drawn down and which we need to keep collateralized and need to repay. Okay, maybe it could get us a better quality of collateral in the shorter term meaning smaller haircuts, but ultimately we need to plug the hole in IBRC to ensure that the ELA is repaid. Whatever that hole turns out to be.

The ECB has shown great flexibility on rates through the LTRO (which BoI gorged itself on) and which no doubt helped the bond rollover into 2015s. But the ECB cannot, absent the Teutonic contingent wresting control of it from every one else, do anything about the size of the ELA. I saw someone lauding Weber for being the man who saved the EZ at the time LTRO was announced (by resigning as head of BuBa and thus allowing someone else replace Trichet).

The ECB can give us wiggle room on timing of cash leaving the system, but not on the total amount of ELA which needs to be repaid.

later12

beeftotheheels wrote: »

Are you talking EFSF or LTRO?

The restructuring of terms I'd meant was the flexibility shown by the interest holiday extended to the Minister for Finance by the ECB in relation to the PNs.

On checking the facts however, it appears that this interest holiday was inbuilt in the 2010 agreement, as opposed to something that was re-addressed some time later.

Nevertheless, this holiday may be reflective of an acknowledgement of the benefit of allowing Ireland to gather itself before attempting to settle the PNs. Whether this is by straightforward restructuring with the ECB alone (less likely) or the use of a bridging loan from the ESM (more likely)

beeftotheheels

later12 wrote: »

The restructuring of terms I'd meant was the flexibility shown by the interest holiday extended to the Minister for Finance by the ECB in relation to the PNs.

On checking the facts however, it appears that this interest holiday was inbuilt in the 2010 agreement, as opposed to something that was re-addressed some time later.

Nevertheless, this holiday may be reflective of an acknowledgement of the benefit of allowing Ireland to gather itself before attempting to settle the PNs. Whether this is by straightforward restructuring with the ECB alone (less likely) or the use of a bridging loan from the ESM (more likely)

The ECB has flexibility on the cash leaving the system. They haven't shown us much but that element is dogma rather than law.

They don't have flexibility as to value of the collateral required so even deferrals of payments could become valuation issues so aren't a slam dunk win.

They should give us some flexibility, and if they believe that their medicine will work then perhaps they could accept GDP growth warrants or other elements to the note to increase valuation while reducing near term payments. But we have to acknowledge where their red lines are.

1. Valuations sufficient after hair cuts to collateralize ELA, and
2. Guarantee that ELA will be repaid.

beeftotheheels

We have an update via RTE http://www.rte.ie/news/2012/0403/promissory-note-deal-could-be-reached-in-may.html

and already the "economists" are rubbishing it because they don't understand the notes so they're asking how the Bundestag is going to agree a deal before we vote on the compact.

This presupposes a real benefit to us as opposed to a cash flow/ timing/ political benefit. The hole in IBRC must be filled, whatever it turns out to be. If the interest rate on the PNs would result in this hole being over filled the excess lands in either IBRC (which we own) or the CBI (which we own) so there is no risk of us over paying.

The PN has to be honored to prevent the ECB hitting a wall of pain and the EFSF already know this. So, if they lend us the money to allow us plug the hole in IBRC quicker, what is the downside for them?

Nothing, nada other than the cash flow advantage we're being given and the price of raising the funds now rather than later.

Why? Because if we were to default like Greece, the PN couldn't be touched because of the ECB involvement. So lending us money to remove the PN actually helps their seniority, not reduces it.

Yes there's the potential for timing advantages which could help us grow.
Yes an EFSF bond is much higher quality collateral and thus subject to less hair cutting, hell the ECB themselves if they agree to allow IBRC borrow from them directly again (which they don't at the moment) could accept it. So we could reduce both the principal of the bond and the coupon and claim a win.

But at the end of the day had the original principal or coupon been too high we'd never have paid them (once the hole in IBRC was filled we'd have stopped). And if the new principal and coupon are too low to fill the hole then we'll still have to step up for the excess.

So there's no reason why the EFSF won't want this. There's two reasons why the ECB will 1. it removes a national central bank lending against a non-standard government bond and 2. Its a kind of European solution to banking bailouts ahead of Spain which goes beyond the Commission's proposals on bail ins. It sets a precedent for the EFSF/ ESM being there for banks.

Yet we're already being warned that the Germans won't want this, as though "this" somehow drastically improves the Irish situation, or drastically dis-improves the European one.

Slydice

Not sure where this bit about Academic Economists is coming from. The ones I've read didn't seem to be yaking on about any specific proposal to bring to defer the promissory notes.

The most vocal anti-promissory note people I've seen are probably the Ballyhea / Charleville people who have marched every weekend against the bank bondholders and now the promissory notes. Mainly I think they are still focusing on the bondholders. I think this site is something related to them (and definitely worth a read): http://bondwatchireland.blogspot.com/

Academic news seemed to be pretty much reactionary:
Before the deal on Irisheconomy.ie 1: http://www.irisheconomy.ie/index.php/2012/03/23/moodys-on-promissory-notes/
Before the deal on Irisheconomy.ie 2: http://www.irisheconomy.ie/index.php/2012/03/27/promissory-note-news-roundup/
After the deal on Irisheconomy.ie: http://www.irisheconomy.ie/index.php/2012/03/30/prom-note-news-roundup-redux/

Before the deal with Karl Whelan: http://karlwhelan.com/blog/?p=218

After the deal with Seamus Coffee: http://economic-incentives.blogspot.com/2012/03/much-ado-about-nothing.html

A baffled Constantin Gurdgiev trying to figure out the deal just after it happened: http://trueeconomics.blogspot.com/2012/03/2932012-promissory-note-deal-2012.html

Welcome to the wonderland of wonderlenders.

NamaWineLake gave a pretty good decryption later on:
Banana Republic status comes a step closer with Anglo promissory note deal
March 30, 2012 by namawinelake
http://namawinelake.wordpress.com/2012/03/30/banana-republic-status-comes-a-step-closer-with-anglo-promissory-note-deal/
Quotes selected by me:

Here’s why we have taken a step closer to Banana Republic status yesterday.

1. There is no “deal” with the Troika consisting of the EU, ECB and IMF. In particular the ECB has given nothing and taken everything.

2. There is no “putting off” or “deferral” of the payment today of the €3.1bn to IBRC. The money is being taken from NAMA and will pay back the loan from the Central Bank of Ireland today.

3. The payment today of the €3.1bn was originally going to be funded by the Troika who charge us 3.5% per annum for our €67.5bn bailout. Instead, Ireland is issuing a bond repayable in 2025 – we think, the Government yesterday merely referred to a “long dated” bond – and which will pay 6.8% per annum. In other words we will fund the payment with an instrument which costs us twice the rate the Troika would charge us.

4. Minister Noonan made the statement in the Dail yesterday and then disappeared. There was no debate or elaboration of the details of the “deal”. I understand from sources that attempts were made by Opposition parties to get further information from the Minister and the Department of Finance but phones were not answered and the Government seemed more pre-occupied on the prospect of a three week holiday which began yesterday.

5. NAMA has in the past invested a small sum – less than €50m – in short dated Irish government debt as part of, what NAMA calls, its “treasury management”. NAMA sold that debt last summer though it recently told an Oireachtas committee that it had €4.3bn of cash at hand with €2bn on deposit with the Central Bank and €2.3bn “is invested in short-term investments pending the use of the cash to redeem NAMA bonds, which we expect shortly”. What NAMA is being called on to do now is to invest €3.1bn in long dated government bonds which represents a significant departure for the Agency. The stated intention is for Bank of Ireland to take the bond off of NAMA’s hands, but that requires Bank of Ireland shareholder approval, and it is not clear why Bank of Ireland would take on a deal which would only pay it a 1.35% margin when it could theoretically buy one-year Irish government bonds today at 4% and exchange these for 1% loans from the ECB, thereby making a 3% margin. So this “deal” with Bank of Ireland, which now needs shareholder approval, has potential to unravel.

6. Why is the money now being taken from NAMA? The Government already has a piggy bank, the National Pension Reserve Fund (NPRF) which has access to over €14bn, and it is normal practice for the Government to direct the NPRF to make specific investments. So why not use the NPRF? The answer is probably that this “deal” is so last minute that the NPRF cannot liquidate investments it has made in time to meet the ECB deadline today.

7. What is the cost of the “deal”? We still don’t know.

8. As for the Irish media and its “winning”, “deal”, “deferral” – the Financial Times calls the arrangement announced yesterday “a bit more bonkers”, it is one of the few international media organisations to report yesterday’s development, which given the headlines in the Irish media noted above, seems curious.

9. As for so-called “debt sustainability”, the governor of the Central Bank of Ireland had a go at explaining the concept to the Oireachtas finance committee earlier this week, and he claimed that even though our national debt might increase, if the interest rate or duration for repayment improved, then “debt sustainability” may also improve. The Troika loans are repayable, in the main, by 2022 so substituting a Troika loan with a bond repayable in 2025 pushes out the duration, but a bond paying 6.8% is, on the face of it, more expensive than the 3.5% loans from the Troika. So at this stage, it is unclear if our debt sustainability has in fact improved.

All in all, yesterday was not a good day for the reputation of this country.

This all seems to have been for political points... which says politicans pushed it... As per the start of the post though... anyone know which academic economists were cheerleading this? [citation needed]?

beeftotheheels

Before the deal on Irish economy

http://www.irisheconomy.ie/index.php/2012/01/19/whelan-time-for-a-deal-with-super-mario/

might be an alternative example!

Slydice

beeftotheheels wrote: »

Before the deal on Irish economy

http://www.irisheconomy.ie/index.php/2012/01/19/whelan-time-for-a-deal-with-super-mario/

might be an alternative example!

what? this?

It is time for the Irish government to declare that it has no intention of putting €3.1 billion towards repaying ELA in March and that it has arranged an agreement in principle with the Central Bank of Ireland that the state will repay this debt when it has fully recovered from its current crisis.

Jaysus, Whelan saying to burn the promissory note is hardly a bunch of academic economists bringing an idea about restructuring to the Government. Of course burning the promissory note wouldn't be accepted by the ECB. :rolleyes: "Here lads, how about we don't pay you that money we made out of thin air but said you would back us up on" I doubt the Governments negotiations were based on that idea.

beeftotheheels

The full quote

It is time for the Irish government to declare that it has no intention of putting €3.1 billion towards repaying ELA in March and that it has arranged an agreement in principle with the Central Bank of Ireland that the state will repay this debt when it has fully recovered from its current crisis.

If my understanding of the legal situation is correct, then Patrick Honohan would only require the support of seven other members of the ECB Governing Council to proceed with this plan. This could easily be achieved with the support of Mario Draghi. Ireland has borne a heavy burden in the name of European financial stability. It’s time for a quid pro quo from super Mario.

which combined with this

http://www.irisheconomy.ie/index.php/2012/01/27/presentation-on-ela-and-promissory-notes/ is certainly starting to look like cheer-leading in my book.

Cheer-leading which ignores the actual legal position of the PNs and the ECB.

Slydice

beeftotheheels wrote: »

which combined with this

http://www.irisheconomy.ie/index.php/2012/01/27/presentation-on-ela-and-promissory-notes/ is certainly starting to look like cheer-leading in my book.

Cheer-leading which ignores the actual legal position of the PNs and the ECB.

I don't get it. Karls idea is about burning the notes. You think the government took the idea on board and tried it on with the ECB? I thought Sinn Fein and the ULA were the only parties even talking about burning anyone.

Is there any evidence actually linking Karls idea to the Government? Is Karl one of the governments trusted academic economists?

This is news to me but I'd be interested in reading the links. It's often pretty complicated trying to figure out who's pushing which agenda and I hadn't got Karl in the Government backed camp (in my head ).

Is there any evidence linking Karl to the government?
Is there any evidence linking the government to Karls idea?

beeftotheheels

Slydice wrote: »

I don't get it. Karls idea is about burning the notes. You think the government took the idea on board and tried it on with the ECB? I thought Sinn Fein and the ULA were the only parties even talking about burning anyone.

Is there any evidence actually linking Karls idea to the Government? Is Karl one of the governments trusted academic economists?

This is news to me but I'd be interested in reading the links. It's often pretty complicated trying to figure out who's pushing which agenda and I hadn't got Karl in the Government backed camp (in my head ).

Is there any evidence linking Karl to the government?
Is there any evidence linking the government to Karls idea?

He's not actually suggesting "burning" anyone. He's suggesting deferring payment but failing to understand the impact of that on the value of the collateral held by the CBI, and failing to understand that Art 123 causes issues because he's insisting that the issue is dealt with under domestic law governing the CBI rather than the Treaties. Actually, he quotes Noonan on that if you read down through the thread I posted but misses the point that Irish law applies if we're compliant, the second we try not complying then its the TFEU.

Karl, Stephen Kinsella and Brian Lucey all appeared before the Oireachtas Finance Committee by which point in time Karl had made sure his proposals were in the public domain, including being promoted by at least one independent TD, and of the three he has the most substance.

http://www.irisheconomy.ie/index.php/2012/02/15/briefing-paper-for-oireachtas-finance-committee/

This coincides with talk of a deal being talked up.

His briefing paper to the Oireachtas contains the same flaws as does everything else he wrote on the PNs in advance of the ECB appearing to say no, and the viciousness with which he's attacked both the ECB's position and the Government's "fudge" suggests to me that he was personally invested, because the Government's fudge is exactly what some of us though was possible at the time. But not him.

I wasn't shocked, as I said at the top of this thread I think it was worth the political gamble of making the fudge, its a victim-less crime and may make Irish people feel slightly less bad about the fact that the Greeks haven't had to repay their own debts while we've had to repay our banks'.

Indeed in the days before the fudge the ECB made clear that any "renegotiation" was within certain parameters, a matter between the IBRC and the Gov which I read as them telling us if we could find a fudge that didn't impact on them they wouldn't object.

Slydice

Really though? Karl Whelans idea on working something out on the promissory notes is what you think swayed the government?

NamaWineLake noted Noonans interest in them at least as far back as September last year:
Noonan to use Anglo promissory notes to deflect focus from Anglo bonds. Confused? Maybe that’s the idea!
September 17, 2011 by namawinelake
http://namawinelake.wordpress.com/2011/09/17/noonan-to-use-anglo-promissory-notes-to-deflect-focus-from-anglo-bonds-confused-maybe-that%E2%80%99s-the-idea/

But what is amazing is that Minister Noonan yesterday raised the possibility of changes to Anglo’s promissory notes which might, according to RTE, “would be more valuable than an agreement that losses could be imposed on senior unsecured bondholders in the bank”. Minister Noonan is reported to have said – and don’t give up reading here, it gets easier! – that the Anglo promissory notes cost us €3bn a year, enjoy “an interest-free holiday” until 2013 and are then set to cost us interest of €350m per annum rising to €2.1bn by 2025, according to Laura Noonan writing in today’s Irish Independent who goes on to quote Minister Noonan : “I would like to open a conversation with the authorities here to get a less expensive solution to the promissory notes”.

I see Karl was talking about it in May 2011:
Who Owns Senior Irish Bank Bonds?
This post was written by Karl Whelan
http://www.irisheconomy.ie/index.php/2011/05/02/who-owns-senior-irish-bank-bonds/

In relation to the cost of the banking bailout, an issue that may loom larger in the future than senior bonds is the policy the Irish government should adopt in a potential sovereign default situation to future payments on the Anglo and INBS promissory notes, keeping in mind that their major creditor is a certain Frankfurt-based institution.

followed by:
Promissory Notes: The Movie
This post was written by Karl Whelan
http://www.irisheconomy.ie/index.php/2011/05/02/who-owns-senior-irish-bank-bonds/

The text below is a secret draft of the opening scene of an upcoming Hollywood movie. The movie opens at some date in the near future with a conversation between a finance minister, let’s call him Baldini, and a European bureaucrat of Scandanavian origin, let’s call him Wally. (Any resemblance between the characters below and real individuals is purely intentional.)

and

Baldini: Indeed, there’s nothing funny about it. No, I’ve been talking with the brains trust here at the Ministry and they’ve explained to me that apparently we’re going to be writing a cheque every year for €3.1 billion until two twenty three and then a bit more after that. Now I’ve been trying to get my head around this business, but I’m just a simple fella, and I can’t figure out for the life of me what we’re getting in return for this money. So, I’ve decided to cancel it. I hear your Eurostat boffins have been counting all of these payments as part of our national debt, so we’ll give them a call in the morning to let them know they can forget about that.

So... do you maybe think they've been in it together since mid 2011 hatching this plan?

beeftotheheels

All talk was vague and unspecific prior to the last couple of months when suddenly there has been talk of optimism, suggesting that at roughly the same time that KW came up with his plan (and you'll note CMcC trying to defend the flaws in it on places on the thread) the rhetoric we were hearing changed.

The "deal" done could have been done at any time which evidences nothing, clearly the best time to announce was at the 11th hour. But the ECB announcements in that week suggest that the Irish Government was pushing a specific proposal (i.e. not the fudge done) which the ECB couldn't agree to. All they could agree to was to acquiesce to to the fudge.

So yes, the Irish Gov might have been pushing an entirely different deal with its own flaws which the ECB couldn't agree to, but this was the deal being talked about by serious economists and financial journalists around Europe.

later12

beeftotheheels wrote: »

He's not actually suggesting "burning" anyone. He's suggesting deferring payment but failing to understand the impact of that on the value of the collateral held by the CBI, and failing to understand that Art 123 causes issues because he's insisting that the issue is dealt with under domestic law governing the CBI rather than the Treaties. Actually, he quotes Noonan on that if you read down through the thread I posted but misses the point that Irish law applies if we're compliant, the second we try not complying then its the TFEU.

Yes but Karl Whelan is an economist. A humble(d) species more comfortable with differential calculus than community law, I should surmise. I think you're quite correct about his ignorance of the legal obstacles to what he was proposing (a position I can often sympathize with!) but when he speaks with his economist's hat on, we should only take his word for what he is saying in his capacity as an economist.

The Irish public sometimes seem to be searching for their own Bruce Wayne, a sleek caped crusader and the world's greatest detective; an all round hero who almost found shape in the character of Morgan Kelly. I think we'll have to be be content with a lot of little Robins (and a few jokers!) instead.

While economists have been very forthright in expressing opinions about the Euro debt crisis - and that's all well and good - it is rather curious that there has not been greater input by legal professionals. After all, the macroeconomic story is easy to narrate. The legal complexities appear to be rather more, well, complex.

beeftotheheels wrote: »

But the ECB announcements in that week suggest that the Irish Government was pushing a specific proposal (i.e. not the fudge done) which the ECB couldn't agree to. All they could agree to was to acquiesce to to the fudge.

So yes, the Irish Gov might have been pushing an entirely different deal with its own flaws which the ECB couldn't agree to, but this was the deal being talked about by serious economists and financial journalists around Europe.

Hmm, I'm not sure, I think there was always something more ambitious in the pipeline, which was and is being examined by the ECB:

Prof Honohan before the Oireachtas Committee seemed to make a discreet reference to the mortgages issue (unfortunately, that portion of the session where he laid his soul bare before Pearse Doherty et al. was made private)

http://debates.oireachtas.ie/FIJ/2012/03/27/00003.asp

What I am concerned about and what it is correct to be concerned about are the underlying economic costs to the State which can mainly be measured in terms of the long-term cash flows. That is what we are structuring around. Can the structure be improved and can the issue of non-core assets of going concern banks also be dealt with? This is the ambition of the larger analysis which has not yet been completed. When will it be completed? I believe it will take several more months. It is hard to reconcile the objectives of the different players involved. The transaction proposed in respect of the end March payment is one half of a step towards the larger scale.