Ireland got a raw deal over debt

The Clown Man

Article over on RTE.

Global investor George Soros has said Ireland got a "raw deal" over its debt.

Speaking at the World Economic Forum in Davos, Mr Soros compared Ireland with Iceland, which did not accept the liabilities of the banks.

He said he felt Ireland's demands for debt relief would be met but only at a minimum.

The philanthropist earlier said that "euro is here to stay" but warned that complacency about the future of the euro zone is misplaced because its fundamental problems have not been fixed.

While the European Central Bank last year managed to halt market turmoil that threatened to break up the euro, its fundamental imbalances "have been papered over," Soros told journalists.

He said the currency's government debt crisis has split it into creditor countries such as Germany and debtors such as Greece, with the creditors in charge and demanding what Soros calls misguided austerity - cutbacks in spending to reduce deficits.

He said the policy of cutbacks for indebted countries advocated by Germany and Chancellor Angela Merkel "is just simply counterproductive" and "is pushing the entire euro zone into recession."

Soros said Germany had agreed to do the minimum to stop the euro zone from breaking up. Merkel went along with plans by the European Central Bank to offer to buy bonds issued by indebted countries if they agree to reduce deficits.

The offer reduced bond market borrowing costs that threatened to push Spain and Italy into financial ruin.

Soros said that Germany has since begun backing down on its commitment to build new euro institutions such as a centralised EU system of banking supervision and a way to restructure banks without increasing national government debt through bailouts.

"The outcome is what I was afraid of, which is a euro zone divide into creditors and debtors, with the creditors in charge and advocating a policy of austerity which is just simply counterproductive, because you can't reduce debt by reducing GDP, " Soros said.

"So it's a wrong policy at this time and it's hurting the debtor countries more than Germany, but it is pushing the entire euro zone into a recession," he added.

Soros said a slumping economy would worsen the political tensions between countries and that the creditor-debtor divide risked breaking up the European Union itself over the long term. "So the financial solution is politically unacceptable, in fact in the long run intolerable," he stated.

Soros made a fortune running investment funds and founded a global network of foundations that support democracy and open societies.

He's refreshingly acute in how he describes it and is pretty damning over Germany's role. He might as well be pointing and screaming "They're at it again!"

tenton

I suppose what do you expect. Who did we have leading the government the night of the bank guarantee for example, at 2am? Had he a few drinks in him? Remember the morning he came on the radio hungover after singing songs in the pub all night? And his secoind in command, the young Mary Coughlan - what did / does she know? I suppose they knew how to look after themselves, look at the big pensions they are all on now, worth 5 or 6 times the average industrial wage. Given the calibre of the people we had making the decisions, leading the country, regulating the banks, running the central bank etc, is it any wonder " Ireland got a "raw deal" over its debt " as Soros says? Mind you our opposition would'nt have done any different / better, and did nothing to curtail spending / the bubble either. As someone else said, we are not capable of self-government.

Duggys Housemate

tenton wrote: »

I suppose what do you expect. Who did we have leading the government the night of the bank guarantee for example, at 2am? Had he a few drinks in him? Remember the morning he came on the radio hungover after singing songs in the pub all night? And his secoind in command, the young Mary Coughlan - what did / does she know? I suppose they knew how to look after themselves, look at the big pensions they are all on now, worth 5 or 6 times the average industrial wage. Given the calibre of the people we had making the decisions, leading the country, regulating the banks, running the central bank etc, is it any wonder " Ireland got a "raw deal" over its debt " as Soros says? Mind you our opposition would'nt have done any different / better, and did nothing to curtail spending / the bubble either. As someone else said, we are not capable of self-government.

Rot. We need to change the electoral system, we are fully capable of "self government" however.

Scofflaw

He's quite correct about Germany's perpetual reluctance, which resulted in a series of bare minimum actions until the ECB finally stepped up to the plate. There's a bit of a balance in that, though - who will put Germany back in the box if they're once persuaded to lead?

cordially,
Scofflaw

Rebelkell

Duggys Housemate wrote: »

Rot. We need to change the electoral system, we are fully capable of "self government" however.

That's true but won't happen . We are stuck with the sh1te system we have

View

Rebelkell wrote: »

That's true but won't happen . We are stuck with the sh1te system we have

Nonsense, we are a democracy and are free to use the democratic system to change it as we see fit.

Of course, if we don't bother trying to do so then we will end up facing the consequences of our inactivity sooner or later.

melekalikimaka

View wrote: »

Nonsense, we are a democracy and are free to use the democratic system to change it as we see fit.

Of course, if we don't bother trying to do so then we will end up facing the consequences of our inactivity sooner or later.

the issue is the public not the politicians, they're good ones out there, but people vote with the wallets/heart..then brain in that order here sadly