November 22, 2010

There is a way out of this

Posted in Irish Economy · 286 comments ·

Travelling on the 11am Aircoach from Cork to Dublin, wi-fi working fine, hurtling down a new motorway, it’s difficult to imagine that the International Monetary Fund (IMF) is already here.

At a certain level, the place seems almost prosperous.

Granted, over the past year the type of person on the bus has changed, but apart from that, not much else screams ‘bankrupt country’.

Last year, the bus was full of students, immigrants and the elderly. Last Friday, there was a significant increase in the proportion of swankier commuters, many well-heeled types, with quite posh luggage, heading to Dublin Airport.

This proves the point that, in a recession, it’s not that the middle classes don’t go on holiday, it’s just that they take the bus and fly Ryanair. It also suggests that, for some people, austerity hasn’t begun to bite.

But it will be felt, and the IMF will make sure of that.

The question we need to ask is will they – the EU and the IMF – make things better or worse.

Let me paint a picture of how they could make things immeasurably better. In order for this to happen, we, the Irish people, must show our government that we support the option which applies the basic rules of capitalism in such away as to strengthen Ireland as fast as possible.

Again, the solution begins and ends with the banks and the nature of the bank bailout.

If the IMF/EU simply follow the course of action that the present shambolic government is pursuing, we are doomed.

That policy of paying every creditor in full is flawed and will lead to a further crisis down the road.

The only way out of this banking mess is to have a bank resolution or law passed which turns the existing creditors of the banks into shareholders, whether they like it or not.

At a stroke, the huge debts of banks disappear and are borne by the creditors – which they should be – and we start again.

The Irish taxpayer is no longer on the hook and we do what the US did in the savings and loans debacle in the early 1990s: we apply a market solution to a market problem.

This will not be pretty, but it will work.

Are we too far down the ‘pay all bondholders’ road to do this?

No, we are not; in fact, the arrival of the IMF makes a reversal of the financially suicidal policy easier.

Why might that be?

There are four reasons: one based on law, a second on the reality of the bond market, the third based in the reality of corporate finance and the fourth based on personal vanity and ambition.

First, we have no bank resolution law in Ireland, so we can do what we want from here. We could now pass a law that says the Irish approach to bank resolutions will be based on debt/equity swaps, where shareholders and subordinated debt holders take the first hit.

Anyone who knows anything about banks will know that the only things of value in a bank are core deposits.

The reason is very simple: core deposits are what makes a bank a bank.

And when all the fancy stuff is done, the only things a bank will buy from another bank are deposits, because deposits are the type of capital you want: steady, cheap and largely sticky.

A bank with a good deposit base has strong foundations.

This is why Anglo Irish Bank was a boiler house: it had little by way of a real deposit base, at least as we traditionally understand the term deposit.

So the resolution law protects depositors with an ECB-backed deposit insurance scheme.

Once the law is passed, expect some legal challenges, but as these challenges will be in Irish courts, it will be difficult for us to lose.

Creditors will then split into realistic creditors, who take the deal constituting the new reality and get on with the business of forward-looking capital, and rogue creditors, who will try to drag us to court threatening all sorts of sanctions.

Well, frankly, let them at it.

This will not matter after awhile.

The second reason we can do this under the umbrella of the IMF is that the IMF’s involvement here means we don’t have to go back to the bond market for at least three years. So it gives us time to sort out our house, without having to worry about bond traders determining our next move.

Don’t forget that the markets are not wise, they are bullies, and the way to stand up to a bully is to threaten him.

We threaten him with a new debt/ equity-based bank resolution law and he will be brought to heel.

In addition, after the debt/equity swap, the overall financial position of Ireland becomes immeasurably stronger.

Our balance sheet becomes much more attractive and the consequent risk of investing here diminishes.

This means that the bond yields will fall rapidly, not rise. The third reason that there might be a way out for us relates to corporate finance. Think about what is happening.

The IMF/EU are injecting fresh capital into Ireland. The rules of capitalism say that new capital always takes precedence over old capital.

This means that IMF money will be ‘senior’ to all the other money invested by anyone up to now. As a consequence, the process of dilution of old creditors is already under way.

So the ECB and the bondholders who are already in the game now realise that they are ‘junior’ to the new capital and this means in plain English that they won’t get their money back on the terms they originally thought they would.

Not pretty, but no one said lending to a bankrupt country would be pretty.

Finally, there is the issue of vanity and ambitions.

The president of the IMF is Dominique Strauss-Kahn and guess what job Domo wants next? Yes, you got it: he wants to be president of France.

Now wouldn’t it be great for Domo if he saved Ireland and in the process saved the euro with a sensible debt/equity deal which allowed Ireland to grow, penalised hedge funds in the subordinated debt market and made bondholders realise that there are risks in reckless lending?

By saving the euro and Spain from contagion, Dominique could appear to be what all French presidential hopefuls want to be: a great international statesman.

We could facilitate this for him, if only he’d see the wisdom of a large IMF and EU sponsored debt/equity swap.

The course of action outlined above is one way the humiliation of the IMF can be turned to our advantage. Can we do it?

Yes we can. But it can only be executed by people who have the interest of Ireland at heart, who can see clearly in the crisis and who understand that, in these negotiations, everyone needs away out. We need a way out, the EU needs away out, the ECB needs away out and the IMF needs a way out.

The above is one such way.

By the way, government ministers reading this, you can have the advice for free. It won’t cost you tens of millions in fees.

Yours, a concerned citizen

David McWilliams starts the Outsiders national tour in Kilkenny on Saturday and in Cork on Sunday.

  1. Malcolm McClure

    Debt/equity swap? Can we do it? No we can’t. Not if WE means Ireland operating as a sovereign nation. The penny hasn’t dropped yet, David?

    • paddyjones

      The Irish banks are too big, they are unmanageable. The real solution is to downsize them significantly, but David wont say that because it means redundancies and he is a populist.
      Mergers and takeovers will happen there will be approx 10,000 less people working in the banks this time next year.
      Some banks like Irish Nationwide will disappear while AIB will be merged with Bank of Ireland or perhaps sold to a foreign buyer.
      Thats how you solve the banking crisis.
      Davids mantra about burning bondholders is not going to happen these have largely already been paid of what left is small.
      There is no easy way out economists have got it all wrong in the past its up to the accountants now.

  2. michaelcoughlan


    It remains to be seen whether the idiots in the Dail will take the above advice once the ECB is on the hook. Then it will become an ECB problem as opposed to an individual German, French or English bank problem.

    It seems so simple: the markets won’t lend to Irish banks because they don’t feel they will get their money back. Why do the IMF and ECB think it will? And we are supposed to pick up the pieces.

    If we continue to pay these ridiculous debts then worse our problem will get not better. The deficit will in actual fact widen after the cuts not get better because we will be losing the multiplier effect.

    • shtove

      I appreciate what DMcW advocates, but putting the Irish on the hook for these loans in respect of the banks must be resisted.

      Here’s Jim Rogers on precisely this point, and he’s the guy who’s been calling the Fed idiots for years. He’s right (video at the link):

      “It would teach everybody a good lesson, and in the end Europe would be stronger for it, and the EUR would be stronger… You can not spend staggering amounts of money that you don’t have of other people’s money that you don’t have because somebody has to pay the piper. This is ludicrous. This will cripple the Irish economy for years to come. In the future Ireland will be crippled because everything they earn will go to pay off old debt. There is no reason why taxpayers around Europe or in Ireland should pay for other people’s mistakes. The bondholders and the stockholders of banks should lose money”

  3. goldbug





    THIS IS WHY WE ARE “where we are”!






  4. Lius

    Unfortunately Ireland is stuck with idiots like Brian Lenihan and the Department of Finance officials negotiating with the EU/IMF who will take us on another unpleasant ride like the Banks took us.

    The EU are just offering us a lifeline to save themselves, they are only buying time for themselves until they figure out how to cut us loose from the Euro and our dumb Government is being led up another painful path.

  5. Gege Le Beau

    Don’t think the government will break the tradition, they are determined not to do the right thing. At least Vincent Browne got to put it straight to Cowen. Got to go.

    As for trying to block the emergence of dynastic politics (which plays a role in making a mockery of the Dail), seems some in Labour are getting it, but long way to go.

    • Deco

      Oh, so ILP selection conventions are weaning themselves off nepotism…they are proposing only one candidate who is a son of a previous politician instead of two…this is so absurd it must be true…and only to provide a favour to somebody who is already in the clique. Unbelievable. If there were two nepotists going for election, it would look too obvious…but one and a bit should be safe enough..

      • Gege Le Beau

        More things change, more they stay the same.

        Despite everything, people think it is business is usual. It cannot be but then there is a reason why ‘we are where we are’. A sleeping Dail is not for waking.

        Labour have also taken PDs of all people, and some FG opportunists, carpet baggers lining up once again, this country at the top is not for turning, and I suspect decent people don’t get involved in politics for that reason.

        • Deco

          You know was absolutely amazed when I heard of tentative overtures being made by Gilmore to get former PD Noel Grealish to become a bureaucracy socialist. I would say that even the Great Socialist Leader, sitting on his stoool in Fagan’s in Drumcondra must have been spilling his Bass on his ManU jersey, over that one.

          The dominant ideology in Irish politics -”opportunism”.

          The entry of Grizzly into Louth (which will go from 4 seats to 5) is another example. He has decided to come because the crisis demanded. It is an economic crisis, and Grizzly makes Coughlan look like an Economist. This is pure opportunism.

          • Gege Le Beau

            Yes, seems like few people actually represent anything these days, serious rot at the top.

            Joe Higgins always struck me as an honourable man, took the average industrial wage and gave the rest of the salary to his party, we need people of integrity like that.

          • Deco

            Yes, in fairness to Joe Higgins he actually did exactly what he said he would do.

          • coldblow

            Gege, “these days” = wha’?

          • Gege Le Beau

            @ coldblow – haha, wondered if someone would pick up on that. There were people who represented something, especially in the early days. But I was also thinking of Joe Higgins, Tony Gregory, Michael Collins, Countess Markievicz, James Connolly, Roger Casement, Michael Davitt, Parnell, O’Connell, the men of 1916 – they all put the people first, there is a tradition there.

  6. Philip

    Frankly, I really do not care about the nature of the meachanics of the bailout if the net result does not allow the typical business to have credit. It seems to me that we are owing a lot more, the banks will be paying a hell of a lot more which will decrease their ability to fund business growth in Ireland. And bear in mind that all we are doing is stopping a run on the banks so that foreign banks do not get roasted too much.

    You see, the IMF are playing the same game as the ECB and indeed FF/FG. They think a few years of imposed austerity will prop up the mainland european institutions long enough to assuage the fears of already sensitied bond market. But, they still do not understand that once the shorting gets underway, it starts to speed up once they smell blood. Sorry for all the clich̩s Рbut you get the idea. Portugal is the next target and then Spain. And given that Greece is still showing no signs of improvement, I suspect the laws of bogus precedent will be applied to ireland and so on to dominoe for once and for all onto the the Euro itself.

    Get out of the Euro fast. OK so the PUNT is traded 10 to 1 euro and we are seriously in the doo doo…but the effect on the Euro will drive it to oblivion – and ditto to all euro debts…This is the key reason the IMF and ECB came in. This Nuclear option has been removed from us…so guys we are going down.

    If you have Euros…dump them. Buy useful stuff. Plant, Machinery, Farm equipment.

    • Paul C

      the Punt never floated – it was always pegged to Sterling. Maybe we should revive the Punt, peg it to the Euro, and just devalue whenever we need to. Paper currency looks a bit doomed at the moment anyway ($,£,€) so it almost doesn’t matter so long as we reclaim the levers labeled “devalue” and “print more” ….

  7. BrianC

    Hi David

    Really nice idea. Only one problem it will not work. The reasons are simple.

    Firstly look at the track record of the Irish Government that should say enough and no need for me to rehash.

    Secondly this is all about those who lent wrecklessly to Irish banks getting their money back and have leveraged the means to do such firstly securing sovereignty to private commercial transactions then orchestrating the top up loan to take out that which they originally lent.

    Thirdly the guys who are running this show have all in hand and they intend executing their pay back.

    Did you notice the back tracking of those in the EU talking about increasing the corporate tax. They were told to back off because because they were going to be taxing the revenues of some of those controlling the show. Did you notice the really clever bit ‘if you alter this rate once you impune its integrity for the future in other words it looses its anchoring meaning it is no longer a baseline to make strategic investment decisions in other words no guarantee to future return on investment. They need to control the asset to sweat it.

    Yeah your idea would work if you had a revolution and the state was overthrown and ‘You’ took control. But that will not happen.

    However, there is another way but that may be for another day.

  8. murray

    Citizen of the Ireland here are
    a few quotes from John F. Kennedy
    Who was shot on this day – November 22, 1963

    “The great French Marshall Lyautey once asked his gardener to plant a tree. The gardener objected that the tree was slow growing and would not reach maturity for 100 years. The Marshall replied, ‘In that case, there is no time to lose; plant it this afternoon!’

    “Change is the law of life. And those who look only to the past or present are certain to miss the future.”

    “We need men who can dream of things that never were.”
    John F. Kennedy
    speech in Dublin, Ireland, June 28, 1963

  9. Any chance you could give Brian a call this morning and ask him to step down so that we can get on with this?


    Asda carpark in Enniskillen was packed with southern cars yeaterday, since the nominal value of the punt broke through nortward parity with £ in Spring 08, the economy has collapsed, quit the euro, or elase a permanent depression will be in place.Honahan is overrated-supports euro membership, said bailout was affordable, no better than the rest of the unsackable clowns in the C Bank.

  11. David’s suggestion requires collaboration! Where is it?

    Morning Folks,

    I am with David on DSK’s vanity aspect, but I fail to see how this would play a part for our decision making, I understand David’s line but I do not think that this places any form of leverage into our hands.

    Concerning debt/equity swap, I am less hopeful here, and I am not aware that there is any precedence where the involvement of the IMF would have caused debt for equity swap of bondholders. Am I wrong here?

    However, only because this would be a first, of course this is no reason in itself to not consider this as a possible option.

    But do you really believe this is even remotely considered? This is not a cynical question, I just do not think the forces at play have any “interest” – Pun intended – in such a solution, which in essence burns bondholders.

    I find it more likely that we would succeed to sell the Cliffs of Moher and a couple of Islands to Sheik Mohammed bin Rashid Al Maktoum.

    David, I think your solution would need parties at large to collaborate on this, I can not see this remotely to be on the table with the EU/IMF sitting in front of us. On the contrary, they are here to make sure bondholders will be paid, or the IMF is not the organization anymore that I know.

    The franco-german axis is calling the shots in the EU now, and they all, including the british, want their money back. The notion of shared responsibility is not existing in their world, the idiotic ECB and CB policies are to be paid for by the Irish citizen for decades, and yes, this means we are doomed.

    People have a very blurred understanding on the policies the Merkel Government is implementing, and need to be reminded where this sorry excuse of a politician is coming from. During the Honecker regime, she was FDJ secretary for AGITPROP (Agitation and Propaganda) She is the german “Thatcher Version 2.0″ and easy prey for Joseph Ackerman.

    The germans plan to make it even easier for weapons manufacturers to make their deals, already being number 3 in global arms trade. Let’s remind everybody that they had a vested interest that the biggest military spender in Europe, the Greeks, would have access to credits and can continue to place orders for Tanks, submarines and other multi billion Euro weapon systems.

    She also destroyed one of the best constitutions that ever existed, the German Grundgesetz, twisted and bend it to make it fit into this sorry piece of shit of a paper called the Lisbon treaties, formerly known as the European Constitution.

    Your suggestion implies that the ECB would not get their money back, what are the chances that they would agree to debt/equity?

    Having said all that, you did not go into specifics, and may be I am missing some stuff, or simply do not understand it.

    I honestly believe the EU/IMF is here for one reason only, and they are having a party already, to make sure bondholders get paid.

    • Deco

      Ireland, is in effect providing justification for the Icelandic approach.

      Iceland did it’s own thing. Ireland followed instructions.

      • BrianC

        Deco ++++++++1
        So few words so much meaning

        • Georg – I agree .How long will it take for the EU to categorise Ireland as a pariah state like UK did to Iceland .We may have an Irish version of a Cod War with EU next.
          Brian Lenihan is the Irish Petan to the Irish version to a Vichy Regime as the Germans did to France.What will the Irish Regime be called?

          • BrianC


            That is really hurtful wow that is very deep pierces the soul never mind the heart. Let us give him the benefit of the doubt. I think he was given a poison challice which he could not pass on.

          • shtove

            If they try that the treaty of Rome collapses – Ireland has rights within the EU, Iceland doesn’t.

      • Dilly

        The problem we have, is that the people in charge here and their minnions, still want to be closer to Wall St and Liverpool St than Berlin or Reykjavik. Greed is still good in Ireland. The status obsessed classes will let this country burn, if thats what it takes to keep things as they are.

  12. On another note….

    This government has NO RIGHT to decide on a budget or 4 years plan anymore, days before they are reduced to nothing, imposing foreigners interests on irish citizens for decades.

  13. Oh… these slime bags of Greens are trying to pull a stunt now? Yet, supporting the budget!

    I suggest we lock up Gormley and Healy Rae in a 25 m2 flat for the rest of their lives.

    Oh and while we are at it, put Harney together with Ryan on the second floor.

    • Deco

      I think it would be safer if Harney is on the ground floor. I would throw in Michael Lowry and a pack of cards or maybe a noisy slot machine for good measure. So that Lowry can “bring gambling into the 21st century”.

      Basically, everytime that the FF backbenchers get stroppy and start to attack Cowen, the GP releases some sort of pious statement to the effect that the GP are not happy with FF. A hint of an election is dropped. This scares the FF backbenchers into shutting up. The GP are more supportive about Taoiseach Biffo than anybody in the FF backbenches at this stage. The message is that FF replace Cowen, the GP might pull out of government. This is because Cowen gives the GP whatever they want. In the circumstances the GP need a weak leader of the government.

      This routine has been played out for the last two years.

  14. ouldbegrudger

    David, it’s all very well in theory but shouldn’t the question be: Why are we allowing FF to conduct the negotiations with ECB/IMF, in secret, when they have no credibility, mandate or moral authority to do so? Given that they have not acted in the best interests of the citizens thus far, they cannot be trusted, even a little, to do the right thing for the people of Ireland. I say: Suspend the IMF talks for two weeks and hold a snap election. That way, the austerity and hardships imposed on us will at least have some democratic authority. Failing that, there’s going to be a riot….

    • Gege Le Beau

      The contract with Shell should be declard null and void, if they object, let the courts sort it out, if there isn’t 400 billion in natural resources, say there is half or a quarter maybe we could borrrow against that instead of taking out money with the IMF boys. If Cowen doesn’t step down or isn’t forced out by his party then there will be trouble, people will not stand for it. Think we are seeing the thickness of their necks, astonishing, no getting through, even now after all this. Cowen managed to tarnish the images of his fellow ministers, like tweedledum and tweedledee (Ahern & Dempsey), the absurdity of it all. Micheal Martin is the one man out of the frame, possibly next leader of Nua Fianna Fail who hopefully will be out of power for at least a decade if not wiped out all together, I suspect they will lose more than the 40 seats, people are rightly seething.

    • Colin

      There’ll be no riots. Pensions and all other welfare and public sector wages will continue to be paid. No evidence there to back up your claim. 15% of the population will still vote FF. Every Paddy for himself will be the order of the day – plus ca change. Irish people are too conservative and self-centered, therefore they couldn’t care less about their neighbours – in general. Why risk getting a criminal record from rioting when it may block the path to emigration abroad, and with it the only chance of success for some people? We could teach the Americans a thing or two about individualism.

      • Deco

        { Pensions and all other welfare and public sector wages will continue to be paid. }

        Depending on whether or not we can continue to borrow the money….

        • Gege Le Beau

          I agree with your overall points Deco, that the public service has to be reformed, the overpaid have to see their pay cut, triple jobbing in the HSE with managers all over the place have to be dealt with, high paid Union officials have little credibility, but let us not thrown the baby out with the bath water, I know plenty of good people in the Public Service, often the most lowly paid, who want to work, want to make a contribution, that is a major asset, but it is like kicking a dog when the service is treated like some lazy monolith.

          Plus reform has to start at the top, Taoiseach should see his salary reduced to 100,000, same for President, cabinet etc, then they can talk of reform. The country is walking on ice, the next crowd better get it right, Leo Varadkar should be kept far from a microphone. The Head of the DAA is making €600,000, look at the other semi-states, it is very wrong. Reform it and build in a fair rewards system for the bright, capable, decent people.

        • Colin

          Isn’t that why FF have brought in the EU/IMF? Its their last chance of survival. Money will flow in from the EU/IMF to pay all that welfare and public sector wages. FF will then go to the electorate saying they did everything in their power to keep house prices artificially high (NAMA), and everything in their power to pay the welfare and public sector salaries (EU/IMF Bailout), and many property owners, civil servants and pensioners will swallow it and vote FF, and who knows, they might remain in government albeit as a junior partner.

          • Deco

            You are right, because FG have moved to the right, and are representing IBEC.
            And ILP still represent ICTU.

            FF are trying to be a proxy for both.
            So, the real power in the land, IBEC and ICTU will decide which of their proxies will take the dominant role. There is a term for it – “the radical realignment of Irish politics”.

            In other words, same nonsense, just a different brand on top.

    • Zaphod

      A riot would play right into the elites hands.
      Allowing stricter controls, harsher responses thus a police state is imposed.
      Not too worried about our police, the Gardi are Irish people, you can’t be one without Irish language instruction/examination.
      The european police are/will be the problem.
      We’re just a small part of a common purpose.
      European arms manufacturers/bankers are at the controls, and on a mission.

  15. Gege Le Beau

    Well game on it seems, Gormley has called for a General Election to be held in the second half of January 2011. He has explained the position of the Green party to Cowen. All over.

    Some two weeks in Ireland politically, socially, economically. If Bruton had got rid of Kenny…..Gilmore may get majority, Gerry Adams in the Dail, possible return of Joe Higgins, goodbye 40-50 FF’ers, including Mary Coughlan, Lenihan lucky to hold his seat……

    Everything that once seemed permanent is falling away, the centre cannot hold and thank God for that….

    John Gormley calls for election date to be set

    • Colin

      Its a welcome development, yet I know the motivation for Gormley is political survival – not the wellbeing of Irish democracy. He’ll call out to the nation, “Look, I brought down the most corrupt government the world has ever seen”. Its his last gamble, he’s nothing to lose at this stage, he may even get re-elected as the only surviving Green.

      • Gege Le Beau

        Whatever his motivations, it is happening now and it is needed. FF will be slaughtered.

        • Colin

          I do hope they get a good slaughtering, but I do not have faith in the Irish electorate to execute it. Lenihan, the most incompetent Finance Minister ever WILL unfortunately get re-elected! Same with at least 40 other FF TDs. It’ll be a case of “They haven’t gone away y’know”.

          • Gege Le Beau

            January, cold, long month, right after the Budget and the bailout, everything fresh in people’s minds, you could not get a worse time for an election for FF, Gormley took crap for 3 years, well he got them in one move right there. Got to love politics, literally revenge served cold.

        • Harper66

          ” it is happening now and it is needed” +1

          Pure political survival from Gormley. Signing off on the comming budget would be like signing his (political) death warrant.

          I think if find the greens more odious than FF(and believe me I loathe FF). I cannot take Gormley and his scantimonious attiude. He and his party are as guilty as FF.

          Found it almost unbearable to listen to Lawlor and Healy-Rae on the radio.They really represent the rot in Irish society.

          • Harper66

            Lowry not Lawlor!

          • Gege Le Beau

            Timing is everything. Gormley timed all this to do the maximum political damage, some coalition, still came across as haphazard and what in the name of God was Paul Gogerty doing bringing his infant along to the press conference??

            Time for them to all go. As for Healy-Rae, I only hope the international networks do not pick up on him, it would add serious insult to injury.

          • Gege Le Beau

            From the Guardian

            9.12am: One of the most bizarre spectacles in this morning’s papers is the photo of a sombre-looking Green party TDs (MPs) lined up behind a desk in Leinster House yesterday.

            It was the most important press conference the Irish Greens have ever called and second from the left was one “bizarre” guest. Lise Hand in the Independent explains:

            When the line of Greens walked into the room, there was a gasp from the gobsmacked press.

            For Paul Gogarty had managed to upstage his party leader’s most dramatic ever announcement by arriving into the press conference with his 18-month-old daughter Daisy in his arms.

            The camera went berserk as the curly-headed poppet blinked in surprise as she clutched her teddy bear.

            It was truly the most bizarre sights of a most surreal day. One impressed observer muttered: “That’s the first time I’ve seen a politician kiss a baby before the election begins.”


          • coldblow


            Lisa Hand’s got a good BS detector. This is something David Brent would do. If I start laughing now I’ll get nothing done today. FFS!

  16. Deco

    News just in. The GP have called for a General Election.

    Unfortunately, the options available for forming a new government are not great. No single party or block has given us any clear policy framework. In essence, any new government will give us another series of fudges. So it is highly possible that we will go from one quagmire to another.

    This is possibly a bad time to make such a move, considering the IMF deal has yet to be finalised. An election will also make it highly possible that FF backbenchers will refuse to support the budget, so as to preserve their own seats.

    This makes the passing of a difficult budget, probably including welfare cuts, PAYE increases, and property taxes, impossible. This will affect the market, given that the state needs 20 Billion per year to meet day to day spending.

    I expect this to actually make things worse on the markets.

    • Colin

      When, in your opinion, is the best time to hold a much needed election then? FF are part of the problem. You can’t be part of the solution if you are part of the problem.

      • Zaphod

        Offer them money to squeal on their leaders.
        Kind of thing the low lifes may go for.

      • Deco

        Firstly, we are in negotiation with the IMF. Lying to the IMF might have been better than lying to the people.

        We have no solution to the problem. Richard Bruton knows more about economics than anybody else in the Dail – and he invested his own savings in Anglo shares….

        • Colin

          I don’t give a monkeys what Bruton did with his own private money. He’s entitled to do anything he likes with it, including pissing it up against the wall like many of his fellow countrymen if he so wishes.

          There’s a solution outlined by David in the article.

          We know FF will not take advice from David. We live in hope others will.

          If you can’t find a good candidate to vote for, then stand for election yourself.

        • Zaphod

          loooooool, lets put him incharge then

    • Zaphod

      Do alot of people just ignore SF ?
      Because of their links to armed struggle I suppose.

      No fan of IRA/PIRA, ex Ballymurhpy resident who’s family were told to leave Ireland due to disagreement with policy of burning out protestant neighbours and older brothers then service with RN.

      But socialism is the holy grail in my mind.

      Time to move forward, as murray reminded us earlier in this page, “We need men who can dream of things that never were.”
      John F. Kennedy
      speech in Dublin, Ireland, June 28, 1963

      Labour should be the way, but their not.
      SF should be no way but the world has changed, we should change too.

      The old bastions of power and influence are being eroded, and they don’t like, they don’t like it one bit. War is the normal path for these people to fix this. They can continue to control what’s left after it.
      They start the wars, they end the wars, they profit from the wars.

      If we want to play in a global market we have to look to the whole world, not just eu/us.
      There are things happening in countries we consider banana republics, through socialism, that make you have pride in humans.
      Look to the south american counties, Hugo chavez and similar people are doing what has to be done.

      My comment on you post is that SF have put forward a clear policy framework, infact that’s too many words, SF have put forward a crear policy.
      We seem to get lost in language too often, many times not understanding what wasn’t said anyhow.

      • BrianC

        SF they have merits but to be honest GA knows nothing about economics.

        They are rooted in the past and the vacuum that has emerged needs to be filled with an ether the people are happy to breathe new life into Ireland. All that was before is tainted and will contaminate the future.

        Ireland needs new policien new thinking a new way of doing things and relying on the existing parties will only deliver the same only self interest thinking.

        • Zaphod

          Sorry about the other link, this has english subs

          • BrianC


            Many thanks had a look and yes I would do everything to stand behind Chavez.

            But there is no Chavez in Ireland and our situation is very different.

            I do not think Adams is of the same stature not because of his past. He just does not have it. Besides we do not need such an individual spear head. And I acknowledge you point regards falling into the trap of violence permitting the powers that be enforce their will by their superior means to access violence.

            We need a new political force expressed through a political front comprising of well chosen respected people who are already there but need the support to step up to the task.

            So as we blog away in our insular worlds the chains of enslavement are being put on our futures. Simple as that and it is sad to watch the politicians in Ireland disgracing the Irish Citizen and it is not about sovereignty we signed that away with Maastrict it is about integrity and respect. I could go on but what is the point.

          • Zaphod

            Not so different, look at the similarities.
            Natural resources given away.
            Large empire wanting to control our country.
            Corrupt politicians/public servants/business men as the ruling elite.
            Not so different.

          • Zaphod

            Do you think it was ok for the eu to promote the yes vote in lisbon 2, spend money on the campain, frighten the people into reversing(with some vote fraud) their decision.
            Nothing wrong with that eh?
            Nothing underhand going on at all.
            Nothing to see here, move along……….

          • Zaphod

            All this talk of giving up sovereignty is laughable, QMV….it’s all down to qualified majority voting.
            We have 1% vote and 70 decides the argument.
            We have no say since lisbon.

          • BrianC

            Hi Zaphod

            Hey don’t get angry at me. I am not happy with the situation either. But there is a big difference between Ireland and Venezuala.

            Firstly once agiain Adams is no Hugo Chavez.

            Secondly Ireland did not give away its resources it negotiated the majority of them away. We favoured agriculture to maritime and the Irish Farmers were well paid. Off shore oil exploration is very expensive and there were not too many takers at the time plus a lot more.

            We have a sort of democracy in Ireland and we kept voting in the dynasty families who became corrupt as power corrupts. And if the Irish electorate used it intellect we could have performed better.

            Lisbon was a non entity fudge the minute we signed Maastrict you know the one currency suits all we dissolved our sovereignty not that we had much as an open economy so small it was always pegged to another currency.

            Yes we do have a say this is the real point but we need to find the people big enough to say NO.

            Listen I understand what you are saying in many ways and it is important to realise that we can still say No. But the bad news is those who represent us are not big enough to do it so they feed us veiled truths outright lies and unless we step up to the mantle and elect those who will deliver the change we need then we are destined to get ditched the same dross we deserve.

            Now I have nothing against Adams or Sinn Fein and perhaps they have good points but for me they would need to strengthen their political front with stronger economics. If they could do that then I would vote for them but I can assure you they frighten most others away because they are light weight. In fact Adams is worse than Kenny and everyone knows Kenny is as useful as a mules tool in a stud farm. The labour party is seriously lacking any intellectual credibility listen to Gilmore 4.5 billion instead of 6 billion and we will have to make the Croke Park Agreement work better. He is just looking to put his ass into a well paid position.

            Change is required and voting in those already tainted will destroy the future.

          • Zaphod

            What I am pointing out is simple, there is a socialist alternative.
            There is no magic entity emerging to vote for.

            Why can’t SF employ people to deal with economics?
            How about reform to a list system?

            I’m not saying GA is chavez, nor that SF’s past isn’t tainted. I point out that all parties past is tainted.

            But if you want socialism vote for socialism.

  17. Gege Le Beau

    Great to see the flexibility on RTE-PRAVDA, easy listening music now playing on the radio in the midst of one of the biggest political events in recent history.

    Newstalk right on the money.

    RTE-PRAVDA never heard of “we interrupt our regular broadcast to bring you……………”

  18. BrianC

    We could form a new political entity and step into the arena. It would require a lot of work.

    But I would have more faith in my ability and that of those who blog here as to that already in the forum.

    Nation building is not easy but at least the electorate would have a choice. No more talk and a little action. Do it ourselves or team up with others who have started to enter the field to deliver the change Ireland wants and needs.

    Ask this simple question Do the Irish people really want more of the ff fg duopoly. If so then we deserve what we elect.

  19. wills


    Article sets out step by step solution.

    Question though, how is it that it s not been carried out?

    • coldblow

      Excellent interview, covers a lot of ground, lots of insights. The bit in the middle about India backs up Crotty’s thesis. I have had reservations about Chomsky but this seems very reasonable, and the interviewer (Bhatt) has his own point of view too. Confirms much of what I’ve been thinking myself.

  20. mediator


    “If the IMF/EU simply follow the course of action that the present shambolic government is pursuing, we are doomed.
    … will lead to a further crisis down the road.”

    This is the actual plan. This is an engineered crisis. Surely you cannot believe that Cowan and Lenihan are so stupid that they thought we could afford to pay the bondholders.

    The only explanation that fits the facts is that they are following orders.If either loses their seat (highly unlikely given our peasant like respect for out betters) they will land a nice sinecure with some Bank or supranational organisation as a payoff – watch this space…

    The next stage is EU bails out individual Euro countries until eventually the EU will face a confidence cris that will precipitate the fall of the Euro.

    Meanwhile the Dollar will also be in turmoil following QE2 and

    et Voila

    New Global Reserve Currency(Heres one we prepared earlier) with Global Central Bank and Global monetary union

    Big picture David Macro not Micro

  21. mcsean2163

    Would be great but means we have the cut our losses. Government is not prepared to cut its losses. They can’t write off the billions they put in the banks already. It should be done, but they can’t!

    New government please.

  22. malone

    A very good point actually in that the goverment were following orders. But the question is whose orders?
    The EU bosses ? If you go back to an article some weeks ago by Mr McWilliams in which he mentioned about the goverment could be protecting some big fish I think it is the big fish that are behind this giving those orders but who are not necessarily EU bosses . I thing it is the very wealthy who have big stakes in the banks not in Ireland but right across the EU who stand to lose a right packet if thse loans were not to be paid. And we all know that the US power elite have also a big stake in Euros affairs and probally have a hand in this too and we all know about the relationship where good old Uncle Sam is involved.

    There has been a lot on the radio about the IMF coming in and bailing us out but I have heard nothing or very little that we are getting a LOAN
    This money has to be paid back plus interest. So realistically how is this going to help us ?: Is it not the case that Ireland has just become a lot more in Debt because of this to tune of 90 Bn euros .
    Its almost a case of getting a bank loan to pay off a credit card. You still are in Debt and the bank manager now says when are where you can go to the toilet until that money is paid off. Robbing Peter to pay Paul so to speak

    I heard a very good comment on the news regarding the British offering to give us 7Bn sterling and the fact that the British Chancellor of the Exchequer will have to persuade the House of Commons to approve this loan.
    The comment was
    ” he will have a hard time in persuading them as there are those in the House of Commons that believe that Ireland should be helped out of the Euro not to become futher attached to it”

  23. CONVERSATION WITH BIRGITTA JONSDOTTIR – MEMBER OF PARLIAMENT ICELAND Message to the Irish people….Remember where you come from!

    Let me know if it works.

    With Birgittas consent I am posting this here, it is an excerpt from a private long conversation with Birgitta in early May this year.

    I also want to repeat my call for whistleblowers in Ireland with special knowledge on Anglo Irish or any other Bank to publish their knowledge on Wikileaks.


  24. The Reform Group

    The Reform Group supports your economic analysis and solution to this national crisis, but as Eoghan Harris tells us:

    “For far too long that green flag has been a convenient cover for gangsters of all hues. From the Famine to FitzPatrick, the most noxious class of exploiters were and are the nationalist bourgeoisie. And if any of their successors are standing on a platform outside the GPO in 2016, they should have ropes around their necks.”

    • Harper66

      If your the reform group I am thinking of,I had the misfortune to stumble across your website once.

      Your a truely insidious, odious group and have no place in a rational debate on modern Ireland.

      Please do not try to hang on the coat tails of this crisis to further your own dirty little agenda.

      • adamabyss

        Who are they?

        • Harper66

          Dont bother Adam. They are a bunch of cranks and sorry to say I took the bait.Should have ignored the comment. They have a list of aims such as Ireland rejoin the common wealth, and all clocks in Ireland rewound to anytime around the 1840′s….

    • coldblow

      I spotted this from Harris too and he’s right to finger the homegrown bourgeoisie (though not necessarily the nationalist ones – why let the others off the hook?). I remember he made a similar point nearly 20 years ago in a studio discussion about the Famine (re land grabbing) and he made a couple of references a year or two ago about the big farmers keeping their heads down.

  25. DC

    Can anyone please tell me what effect this bailout will have on mortgage interest rates.

    i.e. the banks were funded by the ECB @ 1%, this will now be switched off – the bailout funding will be @ 5% provided by the irish govt.

    The difference of 4% will have to made up somewhere.

    Is this an over simplification of what will happen to funding arrangements for the banks?

  26. Malcolm McClure

    John ALLEN: Maybe there’s no point in worrying. St Columba prophesied that ‘Seven years before the last day Ireland will be submerged beneath the sea.’
    Nobody imagined that it would be a sea of debt. …Roll on 2012.

  27. malone

    sorry to quote from Pravda but it goes to show that you can´ t believe a word from the politicans

    Ireland no longer a ‘low tax economy’ – Rehn

  28. Fellow debt slaves,

    I agree with David’s position as he outlines it presuming though he means to include senior bondholders taking write down. Subordinated debt is
    already being targeted at around 85% markdown, so its already part of the plan.

    In the political chaos unfolding, we shouldn’t lose sight of the principle focus of IMF negotiations currently taking place. This is that ‘rescue’ is targeting bank restructuring.

    But from reports this morning, in spite of Noonan arguing the IMF are in favour of senior bondholders taking a hit in delinquent banks, appears the ECB position, again in spite of recent comments by Merkel, will be, they won’t.

    Have FF once again saved their croney Anglo that, like a preying manthis that has just devoured both FF and Irish citizens, now sets its sights on the euro, courtesy of the IMF.

    Having sucked the lifeblood from the economy in a failed banking policy,’our negotiators’, who brought this debacle on us all, have negotiated a €90 bn backstop that will give our ‘hole in the bucket’ banks IMF rescue money!

    We await confirmation of this over the coming days.

    Who’s being rescued here, the banks or Irish taxpayers?

    So far, it would appear from the touting of Lenny that the ECB support the FF position on the banks and NAMA, that FF negotiators have succeeded in getting the ‘rescue’ flipped into another bailout for Anglo.

    If this is true, this result far from reassuring markets, can bring down the euro.

    From listening to Lenny this am, any restructuring that will take place will not be allowing banks such as Anglo to fail.

    There will be some restructuring presumably involving amalgamations and banks will end up smaller.

    Overall, the bailout will act as a vast backstop for the banks to draw on to plug further losses at the expense of taxpayers.

    Some secondary bondholders in Anglo, for example, will take a write down of 85%, but senior bondholders will remain untouched.

    The mess doesn’t end there. It appears the Croke Park Agreement will remain in place.

    More disasterously, NAMA will continue to make a mess and continue to cryogenically support inflated values of Irish commercial and residential property. To protect FF financial cronies.

    Deflated market place will still be lifted by NAMA to a false level that will be paid for indirectly by Irish business, high commercial rates including high rent/lease costs making us just as uncompetitive as before.

    What is the total cost of the damage, the total cost of the bailout? Will it be €100 bn, €200 bn?

    Where are the Quango hammer cuts to support the new IMF and ECB loans?

    Where are the cuts in numbers of td’s, high salaries, blank cheque expense? Will we find out in the budget? When will the information on bank restructuring be made available?

    Why don’t we have a team using the leveRage of Merkel’s recent comments, that bondholders be required to take a loss, why are they not negotiating on this position for us.

    Why can’t we pass a law in support of this position along the lines of David’s suggestion above?

    Hopefully I’m wrong and Shane Ross and Nick Webb are right:

    “The arrival of the IMF in Dublin means that “only half of Ireland’s six big banks may be there this time next year”, according to Conor O’Kelly, the boss of NCB –one of the country’s top stockbrokers.

    Listing AIB, Bank of Ireland, Irish Life & Permanent, Ulster Bank, Anglo Irish Bank and the EBS as in the firing line, the stockbroking chief is among many leading financiers who see a watershed in Irish banking, following the arrival of the IMF and European Central Bankers last week.”

    With this mess, I wouldn’t give much hope for the longevity of the euro now that Clown and Co have their zombie fangs into it.

    On that matter, crazy FF hope to present a budget and 4 year plan and leg it straight after. Perhaps an all party interim budget could be agreed followed by an election and a second budget early in the New Year by whoever gets in!


  29. Deco

    I can’t believe this.

    I am here thinking – after all that we have been through as a result of various property booms, and gambling and speculating – Have we learned anything from the various Ponzi schemes over the past fifteen years ?

    And then there were all the allegations about bad planning, and about money being the main influencing factor. Have we learned anything ?

    And now you have Michael Lowry delivers for Two Mile Borris.

    Something very fishy about this. From the politician who was going to clean up CIE until we found out he was getting a house extension built with help from a millionaire retail king.

    • Gege Le Beau

      Yeah, this thing has been knocking around for a while, a hotel looking like the White House, Mary Harney will be delighted, she can stay over night.

  30. Gege Le Beau

    Default and some kind of debt forgiveness is the only way out of this fiasco.

    A severly indebted country taking on €80 to €90 billion in more debt at 5% is hardly a solution, the soon to be departed government is merely kicking the can down the road. The societal pressures can only increase, a bit like Germany after the Versailles Treaty (1919), we are entering our own Weimar Republic, high unemployment, savings etc wiped out, age of austerity, emigration, social unrest with no Bauhaus period.

    Game is up for Europe, euro looks in doubt as does the entire European ‘project’ but when you have unregulated, reckless lending by so many so called financial institutions what do you expect.

  31. Gege Le Beau

    My mother always said it, “you always get caught out when you lie so best to shame the Devil and speak the truth, because when you are caught no one will ever believe you again, even when you tell the truth”

    4.17pm: George Osborne has just stood up in parliament to give the statement on financial support for Ireland.

    The chancllor starts by explaining that it is in the UK’s national interest for Ireland to have a stable economy and banking system:

    The current Ireland situation had become unsustainable

    Osborne also reveals that the UK government has been working behind the scenes with the G20, the International Monetary Fund, the European Union and the Irish government in recent weeks – in case Ireland had to apply for financial help.

  32. Maire

    My advice to anyone who is in Government now, or in the future is “DO NOT UNDER ANY CIRCUMSTANCES TAKE ONE TO ONE ADVICE FROM David Mc Williams” after all it was he who gave the Finance Minister Brian Lenihan advice on the Bank Guarantee in his front room. Lenihan took his advice and here we are. I can not get away from that fact. I do not like FF and I blame them for everything but I also blame David for sticking his nose in, he should have minded his own business and we might not be in this mess. Back off David and let the IMF do their thing.

    • Rubbish. Guarantee was a safe harbour to allow the bank fleet to be fixed. The gombeens instead of dry docking and taking out Anglo, set out to sea with croney Anglo leading the fleet into a hurricane.

      It has always been the view of David that Anglo should have been allowed to fail. We’ve had chance after chance to allow this to happen and didn’t take it.

      Now the whole fleet including Ireland Inc is sinking as we speak!

      • Guarantee was extended ludicrously and absurdly as recently as last September.

        This was our last chance to be smart. We chose to be dumb and extend the guarantee and therefore ‘we are where we are’ and ‘the negotiators’ are as we speak making the mess worse inside a storm of political incompetence and chaos.

        What else could we expect from them?

    • ouldbegrudger

      Marie, strong stuff indeed. Can you post a link to backup your assertion?

    • Johno

      Im sure more informed bloggers here will correct me if Im wrong , but Lenihan went to David for advice on what to do. David came up with an idea to get the goverment breathing space to stop a run on the banks which I think was fairly succesful , I know the bank I work for recieved a hell of a lot of deposits becasue of it. But it was then down to goverment to come up with the next step which they didnt. Now the Imf are here and I feel the venurable are going to get screwed.

      You may not agree with what David suggest but atleast he has the balls to start thinking outside the box which is needed for us to get out of this mess.

      • @johno

        Look no further than above article for the evidence

        “That policy of paying every creditor in full is flawed and will lead to a further crisis down the road.

        The only way out of this banking mess is to have a bank resolution or law passed which turns the existing creditors of the banks into shareholders, whether they like it or not”

        Guarantee gave opportunity to assess the banks and arrive at an informed position on how to deal with them. Unfortunately, Government exploited the guarantee to ignore moral hazard and put taxpayers
        on tap for the insider financial circle.

        This FF banking policy was doomed from the start.

        Those in the NTMA and DoF including Honahan and Matthew Elderfied, head of Regulation for Central Bank, should be asked to resign, those with tougher alternative policies based on shared loss by bondholders and taxpayers, should be placed into position as negotiators with IMF.

        • Johno

          Was listeing to Anton Savage ( filling in for Ray Darcy ) on today fm and he was saying a report in 2008 by someone is the dof more or less predicted what was going to happen but it was ignored. SO there is atleast 1 in The dof who can think for themselves!

          • Deco

            He probably got relocated to the OPW or Udaras na Gealtachta, so as to let the rest of them keep the consensus untarnished….

    • Deco

      What would have happened if Lenihan and Cowen took no advice ?

      I mean we know what they are capable of, on their own.

    • Colin


      What rock have you just crawled out under from? Please inform yourself at least just a little bit before you make statements which we all know are false.

      David came up with the idea of a temporary guarantee, to allow a few months to go in to the banks and find out what the true losses were. Lenny grabbed it and bastardised it, by not finding out what was happening in the banks. If you don’t believe me, this site has an archive to prove to you what David said and when he said it.

    • coldblow

      Hi Maire. I remember you raising this here, tentatively, once or twice over the past year or so and now you’ve obviously reached a considered opinion and have returned to deliver it. Fair enough.

      I don’t agree with it myself as without the guarantee there would have been chaos. It looked like a liquidity problem at the time, although David among others knew it went beyond that. So the guaranteeing of bondholders (snr and jr) seems a mistake in retrospect. Morgan Kelly was very critical at the time. But then again the guarantee could have been allowed to expire and a deal forced on the bondholders. Beyond that I am a bit confused as to what would have been possible and I doubt if anyone can say they really ‘know’ 100% what could have been (and should be) done.

      Certainly, the point of the present loan is to recoup the ECB’s and the big Euro and GB banks’ money (just to keep the wider banking system show on the road a bit longer), while Merkel sounds warnings about future (not present) bondholders being left to carry the risk in the future – which isn’t much use to use right now of course.

      Without the guarantee in Sept 08 and without at bail out now my belief is that savers would be wiped out to a greater or lesser extent (probably greater).

      • coldblow

        Actually, thinking about nobody being 100% right, revise that to 80 or 70%. “Pace” Malcolm but those saying you can’t do x, y and z don’t know it all either. I think David is being provocative here with his talk of selling deposits (he means their value to a bank to keep it a going concern rather than the fact that they represent liabilities rather than assets of course) following on from the stick that Brian Lucey got for making the same suggestion a while back. My guess is he’s throwing some petrol onto that one again for the fun of it. We have to keep reminding ourselves that these people don’t really know what’s going on.

        One thing I know (or think I do) is there’s too much debt and it will have to be written off. How and when that’s done, and how well positioned Ireland will be when it happens, is the issue.

  33. [...] McWilliams again says There Is Another Way – as I’ve said here before. IMF/EU intervention is a blessing, not a curse. It will [...]

  34. uchrisn

    David’s advice has been spot on all along and I think we should follow it again. At this stage people have got to realise that now we are activating the rescue fund, whats the difference for us if the senior bonholders pay up? The market rates will go up, so what?
    I actually sent an email to my local TD, Minister for Finance, and Taoiseach earlier today suggesting the same ideas as David, though not as eloquently or in such detail.
    Clearly the Irish people are being asked to sacrifice themselves for the well being of Europe. Thats all well and good if its for some benfit.
    The theory is that if the Irish ask the banks credtors to take their losses then rates will go up for Portugal and Spain, and Europe can’t afford to bail out Spain.
    However it may well be that they are just pushing things down the road.
    Ireland needs to show the example in dealing with the issue now.

    • Means less rescue money goes to the banks to pay their loans. Bondholders need to be burned now to keep our bailout costs low. Markets don’t matter because bailout means we are covered for next 3 yr.
      If it works, markets will reflect a new economy rebuilt and efficient and will price bonds accordingly. If it doesn’t, we collapse along with euro. Either way, we have nothing to lose in getting bondholders to take their fair share of loss.

  35. Deco

    “It is time for Fine Gael and Labour to show that they are ready to take power, that they can exercise responsible leadership.”

    What is Lowry playing at ? Trying to swap sides, trying to pass comment on Cowen’s “leadership”, or making a sneer of Kennylite and GimmeMore ?

    Probably, only trying to feather his own nest…

  36. eamondo

    So royal bank of scotland are in deep too in ireland, or in too deep.

    UK (ltd) bung an additional few bob into the package and twitter (not in a social networking way) on about Ireland being “neighbours”, “valued export market” etc.

    What cost to Ireland this “neighbourly” gesture???

    Answers please to J. Healy Rae, c/o any funeral parlour in Kerry where he spends most evenings attempting to look mournful over the coffin of some one he neither knew or ever met. Nor their family.

  37. Pastor of Muppets

    Maire says:
    November 22, 2010 at 5:26 pm

    “My advice to anyone who is in Government now, or in the future is “DO NOT UNDER ANY CIRCUMSTANCES TAKE ONE TO ONE ADVICE FROM David Mc Williams” after all it was he who gave the Finance Minister Brian Lenihan advice on the Bank Guarantee in his front room. Lenihan took his advice and here we are. I can not get away from that fact. I do not like FF and I blame them for everything but I also blame David for sticking his nose in, he should have minded his own business and we might not be in this mess. Back off David and let the IMF do their thing.”

    Maire, I’ll cross your bridge, provided you get back under it, like a good little troll. To suggest DMW is the party at fault for the currently intensifying financial and socio-economic disaster we find thrust upon ourselves is a little silly, now isn’t it?

    You’re not a closet Fianna-failurite with your attitude of ‘don’t let the little people stick their nose in things they don’t understand, like their right to self determination, individual thought, etc, are you?

    You could get a great job with our national broadcaster as head of the censorship bureau with an attitude like that…

    I do dislike engaging in ad-hominem attacks but I can’t not call you on your comment.

    • Maire

      Hello muppet, “if you are fit to read”, then you should read my comment again, it says, “I do not like FF and I blame them for everything but I also blame David for sticking his nose in” What a very mature response resorting to name calling, what age are you. I repeat what I said, David should have minded his own business and we would be a lot better off. Go raibh maith agat Maire.

      • StephenKenny

        Your previous statement didn’t say that if David hadn’t got involved we’d all be better off. When I initially read it, that wasn’t even what I thought it meant. I assumed it was a political comment suggesting, in effect, that David shouldn’t get involved in politics.

        Although we have no way of knowing, it has always seemed unlikely to me that David’s kitchen table chat was the cause of the guarantee to be put in place. Ministers have many advisers, and my take what that the visit was partly PR by the government (talking to a high profile popular commentator etc), and partly to get his view on the guarantee.

        Even were it the case that without David’s intervention the guarantee wouldn’t have been put in place, it seems slightly unreasonable to ‘blame’ David for all the missteps that have taken place since then. The guarantee itself stopped runs on the banks. After that had been achieved, there was time to implement policies that would have started to correct the problems. e.g. an organised, orderly, negotiated, default.

        It was undoubtedly unfortunate that the government chose to implement none of them, and instead, effectively, sat on it’s hands hoping everything would pass.

        • Fergal73

          As I recall, DMcW advoctaed for the guarantee, but NOT as implemented by the government. He did not propose guaranteeing bondholders.
          The guarantee was supposed to be temporary, it was not intended to convert private debt (bondholders) to public debt.

          Blaming DMcW for how FF have successfully destroyed the Irish economy is ridiculous. It is that type of irrational thought process that allowed people to continue to vote for FF – even after CJH and his unexplained wealth, Bertie’s wins on da horses, the Galway Tent, the Flynns, Jackie-Healy Rae…..

          A democratic nation deserves its government. The Irish people were complicit in the nod and the wink, the parish pump politics. Projects were delivered late, and massively over budget, Port Tunnel, LUAS, the new terminal and it didn;t matter, because there was always more money.

          Asides from placing blame firmly at the feet of FF, don’t forget, Irish people elected them.

      • Zaphod

        Maire your a dipshit.

        I am 44 years old.
        Your a dipshit.

        • Maire

          What word would I choose to describe someone who is “44″ years old and speaks as you do and thinks that is a mature contribution?, let me see now, hmmm, words fail me. Keep up the good work, you should apply for a job in PR.

    • joxer

      agree, mc williams is a bolox

  38. Cowen is making a statement on Radio One and has just said, “We have entered into discussions with European partners ,,,on basis of € 6bn cuts……..this is the context of the budget.”

    Look, this FF shipwreck has no authority to negotiate with any ‘partners’ in Europe on behalf of the Irish people.

    The arrival of the IMF took away any credibility remains they had.

    FF do not have any authority except Gombeen arrogance to try to impose their budgetary will on the Irish people. Least of all a FF 4yr plan? WTF.

    They should just step aside and allow others sofar untainted with their mess to try to begin a cleanup.

    By all means send their budgetary notes to others.

    But others should decide the budget.

    An election should be called immediately. The elected representatives of the Irish people should obtain their authority to prepare a budget from the Irish people.

    None of this messy, incompetent and zombie nonsense that FF are trying to enforce down our throats against our will.

  39. Gege Le Beau

    Easily the worse government statement in the history of government statements.

    Appalling acoustics, old wooden looking podium, beaten looking ministers including Coughlan who liked she was at a funeral, a Taoiseach barely visible behind the microphone, a late and absurdly short statement. Absolutely humiliating.

    In the name of God what does it take for these people to go!

    • Consider the lunacy of allowing these sheisters to map out a four year plan for the citizens of Ireland considering where they’ve led us over the last four years, and the four before that!

      We should’ve asked Seanie Fitzpatrick to set out his 4 yr plan for Anglo just before he left Anglo:)

      He’s a night club comedian on shudder island!

      • Gege Le Beau

        Tonight was the night to bring this thing to an end.

        Cowen was supposed to give the statement at 7pm, it didn’t, was another 15 minutes or so and he opened it by saying ‘good afternoon’. Whoever thought holding a press conference on the steps of that building with the stain glass window behind them and journalists shouting questions at Cowen should think again. There was no control, very poor organisation and all this was broadcast around the world, I can only imagine world leaders looking at the haphazard nature of it all in sheer disbelief.

        • Colin

          Where was the microphone for the journalists, that is normally passed around in press conferences the world over? Ah, not here, this is the way we’ve always done it here shure, don’t be causing problems, who wants to hear what the questions are anyway? …..ah jaysus, my head hurts now.

    • Deco

      Here’s a prediction for Coughlan.

      The FF Senator in Donegal won’t get elected in the by-election.

      But he will take her seat in the General election !!

      • Gege Le Beau

        Unlikely, she has precedence in terms of party selection, think the point is FF will lose entirely, with Sinn Fein and Labour taking the spoils in the General Election.

  40. Deco

    A debt for debt swap.

    Basically, some anglo bondholders have already settled for an 80% haircut. It is not 100%, and I am not sure if legally we could have got 100% of a cut.

    Currently AIB bonds are 50% off face value.

    It looks like the DoF are finally starting to use their brains.

  41. Deco

    Just regarding competitiveness, a lot of people in Ireland regard themselves are good at construction.

    Maybe we might need to learn how to get better ?

  42. Pastor of Muppets

    Deco, I *think* we don’t really need more hotels knocked up every 6 days but maybe we could all chip in and get the Chinese to stick up a nice big lunatic asylum, say in northern Greenland. :-)

    I know a couple of political parties and their apologists who could be relocated there, basically detained at the pleasure of all the thinking individuals of Ireland. (ie for a very, very long time) I’m all for occupational therapy, so maybe they could break rocks by day and spend the night listening to their own spin and waffle at ear splitting volumes on a constant loop as part of the media skills training programme that, based on tonight’s effort at a press conference by our esteemed leader, appears to be sorely needed.

  43. michaelcoughlan


    I have read the article above several times now and I am convinced that what is going on in Ireland is not an exercise in saving even bank bondholders it is an exercise in saving the Euro. It is the only possible explanation and of course the citizens of Ireland are going to be massacred by the maxim guns of the IMF and ECB.

    I just can’t believe what is happening. I really feel that the commentators on this website are like the group led by Morpheus in the Matrix trilogy where only a handful of us have the clarity of vision to see what is being done before our very eyes. This so called bail out is the most ridiculous of all. If you add the interest payments of the 5% demanded this time to the capital repayments of the €100bn and the margin demanded by the living dead in charge of the IMF and ECB onto all the other promissory notes and interest and capital payments we are already committed to what do any of you think will happen to us sooner or later? For my next sentence I choose to use an expletive to bring home to all of you the appalling reality of what is being visited upon us: WE ARE GOING TO BE FUCKED WITHOUT VASELINE. Make no mistake about it. We simply won’t be able to pay it all off. The figure would be an absurd tens of thousands of Euros owed by every citizen of the state for the next thirty years.

    I just hope and pray to God that the there is at least a handful of the soulless life forms who masquerade as people left in the Dail who have the courage to pull the rug out from under the IMF and ECB and trigger default once we have them in the kill zone of assuming all the responsibility for the reckless lending of the incompetent German, French and British banks whose liabilities they will now be responsible for if the content of the above article is true which states that new capital replaces old.

    We could then use our own national deposits of 85bn plus the national reserve fund to fund a new bank focused on lending to small business’s AFTER the ECB and IMF were told to go F*CK themselves.

    I really hope that the scenario outlined above or something like it is what the Muppets in the Dail have in mind because election or no election the sums simply don’t add up and if we are still expected to pay off all this debt then it will well and truly be GOD help us all.

    • Gege Le Beau

      Sezie control of the gas and oil off the Western coast, no way we can pay this bill, default is the only way.

      • michaelcoughlan

        Hi Gege,

        Seizing control is one thing but asset stripping the country to pay for reckless banks is not something I would support. In any event the state can’t become a thief just because Ray Burke raped his country.

        • Gege Le Beau

          I wouldn’t support that either but we have to assert ourselves and at the very least fully control our natural resources in this unprecedented crisis, ‘everything is on the table’ we are told, really?

  44. Mother of Three

    Great article David…you say it like it is. Now how do we put it into action? And how do we get rid of all the politians? And why are we still paying Brian Cowen and his cronies more than Barack Obama???

    • johnpryan

      Ireland Inc
      Bottom line is that Irish Democracy is DEAD

      What we do not need is a new Government – we need to treat this small country as a company with an elected board of directors – not politicians.

      We need qualified people who can actually manage and whose job it is to get results.

      Does anyone seriously believe that any of our politicians care about anything more than their own eogs and getting themselves reelected ?

      Does anyone believe that FG/Labour will make a difference – one a party that was in turmoil a few short months ago, the other a ‘left wing’ party who will sell their soul & core beliefs just as the Greens did in order to get into power…..

      There are companies out there as big as Ireland – kick the politicians to touch – Let’s elect say a dozen suitably qualified individuals to run the country on a 4 year mandate – let elected mayors and councillors deal with local issues not politicians who are supposed to be running the country.
      Lets turn the role of President into a CEO/Chairperson.

      Let’s do something radical because our Political Parties and processes are fundamently flawed.

      We need Ireland Inc – even if we are broke it might just be the light at the end of the tunnel.

  45. StephenKenny

    I don’t think that any of those involved believe for one moment that Ireland will ever have to pay off this loan.

    Cast your minds back to 2007/8. We know now that there was absolute panic in all departments of finance, as the financial system fell apart around them. On the surface, of course, we were told that it was all sort of OK, the problems had been contained, and that $750bn (TARP) wasn’t really a large amount of money anyway. Underneath, there was real panic.

    They keep on launching bailouts, giveaways, and heaven knows what, trying to keep the banks afloat, while all the time saying that things are getting better, we’re pulling out of the recession, and so on.

    My feeling is that the EU are just trying to hold things together so that they can organise an orderly default on the Euro. This won’t be a technical default, but a slow, grinding, back door default via inflation.

    It’s always seemed to me that politicians have neither the brains, strength of will, strength of character, or leadership, to do anything but inflate these things away over time. This, it seems to me, is what everyone is trying to do.

    My old dad told me how they used to watch out for poverty: Watch dog food sales. When dog ownership falls, and dog food sales rise, you know what you’re looking at. Old people buying dog food for their dinner is an image that has lived with me ever since. And yes, I know that it’s very nourishing, but ……

  46. Fergal73

    Default will happen. It’s either that or debt forgiveness, but there will have to be some suffering to prevent “moral hazard” from encouraging other states in the future from taking the Irish road of “Spend, spend spend, shure someone’ll bail us out”.

    Without either debt forgiveness or default, Ireland will never recover. The tax burden will be so high that people will simply emigrate as soon as they can. Ireland will be left with the oldest population on earth as every school-leaver college leaver simply packs their bags and goes.

    Why stay in Ireland earning say $27K and paying 60% of income in tax when you can go to any other European nation and pay less?

    Advice for parents : Make sure your children learn a modern language. They are products for export in the new Irish economy.
    Spanish – Lat Am
    Portuguese – Brazil – one of the most positive-looking markets globally.
    Mandarin – China.

    If you can, EMIGRATE.

  47. paulmcd


    Population – 1925 [1] est. 62,411,000

    “As part of the Treaty of Versailles that ended World War I, Germany was required to make reparation payments to the Allies to compensate them for costs and losses incurred during the war.

    In today’s dollars they were expected to pay just short of $400 Billion, and would have been making payments until 1984.

    This was a significant debt owed to foreign countries.”

    $400 billion = €293 billion


    It is not beyond the bounds of possibility that Ireland today with just 7% of the population of the Weimar Republic could be liable to sum equivalent to 100% of the sum payable by the said republic over the 1919 to 1984 period.

    The 65-year duration of debt repayment proposed for Germany in 1919 is the same as the duration of liability of the Irish State for debts associated with AIB’s Insurance Corporation of Ireland debacle in the mid 1980′s (0.5 bn in today’s currency.) which will continue until the year 2050.

    To the best of my knowledge the scale of our debt obligations per head of population will greatly exceed that of any nation in history.


    • paulmcd

      For Ireland to be on a par with the Weimar Republic we should be required to repay no more than €20 billion to the banks which were lending.

      At the end of September last, Lenihan secretly arranged a €55 billion repayment to French and German banks.

      • Gege Le Beau

        I don’t think the parallel with the Weimar Republic unfair, I think it is very accurate, and as a student of history, that society torn itself apart and enabled a strong man to emerge.

        I notice Declan Ganley doing the rounds of the networks last night, was featrued on Sky News at 19.30, very long interview.

      • coldblow


        I think it’s a fair comparison. It’s interesting to compare the spin now with then. The story is that GB and France but the squeeze on Germany after WW1 and this is true, but what is generally not known (see M. Hudson, Super-Imperialism) is that it was the US’ refusal to waive any of the war debts incurred by their ALLIES (GB and France) in WWI (before US intervention in 1917) that was at the root of the problem. Let us hope that our allies or ‘partners’ are more enlightened. I am not convinced. The EU/ECB wanted us to save our banks in 2008 because they didn’t want the EU banking system brought down by it. Now they appear eager for the Irish state to take on full responsibility for the consequences of the bank rescue. I know this can be argued both ways, and is, but the role of the US in laying low Weimar is not an encouraging historical precedent. In other words, “this is what they say is happening now” versus “this is what did happen then”.

    • Deco

      The hysterics of some people are unbelievable.
      This is not the Weimar Republic. I don’t see people starving on the streets, burning paper notes to keep warm, or trying to get foreigners to buy pianos, in order to be able to buy an apple.

      However, it is a cause for concern to see that complete all round know-it-all Aengus O’Snodiagh making an ass of himself in Merrion Square. He was accompanied by a mob of “patriots” carrying the national flag, loaded up with aggression, (possibly fuelled by alcohol) and wearing scarves of a sectarian Scottish soccer club. They were shouting “traitor”.

      At the same time we have seen SF activists takeover the offices of FF council members in Cork City, and cause other incidents of vandalism. No word yet from the soft spoken Mr. Mild himself, Gerry Adams about all of this thuggery.

      It is very obvious that SF have several issues with regard to hypocrisy, and general respect for public property.

      • paulmcd

        Deco, there are no hysterics here. We have German and other “interests” to cater for. Some Germans will understand, I believe, the destructive nature of debt.

        I am sure it was not debt alone which was at the root of unleashing the evil forces which came to power during the Weimar era.


      • Deco

        Nonsense. Weimar Germany was so broke, that it could not pay to feed itself. Our GNP statistics are still above those of 2001.

        We are insolvent. Basically, we have overallocated resources in property, and we borrowed to do this. In addition we spent an absolute fortune on lifestyle, which is money that will never return and has no return rate.

        The Irish people, spent and borrowed and created this debt mountain. We are responsible. And we must take responsibility for fixing it. This means that we stop whining moaning, whinging, bitching etc…and we start doing practical things that will get it right. That includes shafting bondholders, making the state more efficient, and smaller. It closing down quangoes, including NAMA.

        With freedom, comes great responsibility.

        We have been shirking the responsibility. Ireland needs to switch off the tendency towards delusion, and become responsible.

        • paulmcd

          Deco, I am making a simple cold calculation of debt per capita which foreign powers expect us to repay – adjusted for passage of time – and in that simple cold statistic Ireland “wins” hands down.

        • Gege Le Beau

          Give it time Deco, give it time, Weimar went from 1919 to 1933, it was years into it before things really kicked off, massive unemployment, huge external debt, appalling political leadership, the parallels are there. It was 1928 when things really kicked off, Hitler came to power in 1933, 10 years after his Munich Putsh.

          As the German Finance Minister, Gustav stresemann, at the time said, “Germany is dancing on the edge of a volcano”, the same can be said of Ireland.

          For Ireland: an external debt of a quarter of a trillion euro, shocking political leadership, massive democratic deficit, oppressive institutions which has been exposed, all adds up to a nasty but potentially liberating cocktail.The only thing preventing Irish deposits of 100,000 or less from being wiped out is the government/EU guarantee, there is a reason however why AIB has lost €13 billion in corporate desposits. Country has been broken open. There are stories on the ground of people turning to St. Vincent De Paul for food and money plus the big elephant in the room is the issue of mortgage default, which is possible the final item which will put the Irish boat over the waterfall.

      • michaelcoughlan

        You said it in one all property will be public propeerty if they get their way.

      • joxer

        All you westbrits are scared shitless of Sinn Fein, they are the only people who are speaking up for the ordinary people who are being shafted for the corruption and incompetence of the current goverment and the crimes of the banksters.
        Ireland needs leadership,and needs it right now,pearse doherty will win the by-election in Donegal and Sinn Fein will gain many seats in the forthcoming general elction and more power to them.

        We meed to stand up and say stop,the people will not carry the burden for the corruption and incompetence of fianna fail and their buddies the banksters and big developers
        Sinn Fein Abu

      • Zaphod

        loaded up with aggression, (possibly fuelled by alcohol)……..

        all facts then.

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