May 5, 2011

EU now being threatened by its own central bank

Posted in Banks · 258 comments ·

IN the late 1980s, while studying at the College of Europe in Bruges, I was struck by just how pragmatic the European project appeared to be.

Many of the lecturers and professors were deep EU “insiders” — distinguished academics from all over Europe who had excelled in their own fields. They seemed to be the pinnacle of cosmopolitan sophistication, enlightened and aware of the various strands that had to be pulled together carefully to make the EU work.

Back then, any moves towards more European power were characterised by patience and prescience — a little move here, a pull back there, never overplaying the hand and, above all, the entire process seemed to be non-ideological.

Over the past 10 years, this has changed. European wisdom has been replaced by EU dogma; lateral thinking exchanged for tunnel vision. The ECB is to blame.

Those who, during the boom, pointed out that there was a central problem at the heart of the euro were dismissed as cranks. Now there appears to be a realisation that, from Ireland’s point of view, the entire euro project might not have been the smartest thing to do. And from an economic perspective, it is becoming apparent that we can’t get out of this mess quickly in a single currency with low inflation.

Historically, when a country has been hit by the bursting of a property bubble, a bank crisis and the destruction of the national balance sheet, this has been followed by a massive devaluation of the currency.

This allows three things to happen. First, the country becomes internationally competitive quickly and the exporting sector — not only the multinational sector but also the domestic exporting sector – gets an immediate boost. Second, the subsequent inflation allows a drop in public sector salaries and the wage bill without huge pay cuts — which is politically easier to achieve. And third, the same inflation begins the process of inflating away the huge debts built up in the boom, reducing the need for debt forgiveness and reducing the likelihood of default.

That’s the way the economy works. It is what happened in the Asian Tigers in the late 1990s and Finland and Sweden in the early 1990s. It is not that complicated really.

However, in a currency union, this process can’t happen. What happens instead of the currency falling is that people’s wages are supposed to fall. It is important to remember that we are flying blind here. We are in a trial and error process because there has never been a currency union without political union, so we don’t know for sure where this will end. But what looks likely is that the dogma of the ECB will cause successive Irish governments to try to grind down wages and prices in order to be competitive. This will take years and much strife.

What does this “drawn out” grinding process do to an economy? In an economy that is facing a balance sheet meltdown — where the middle classes’ balance sheet is bust — such an approach will result in more financial insecurity, causing people to spend less, not more and result in higher unemployment. Higher unemployment results in a higher social welfare bill, which combined with less taxes causes the budget deficit to explode. This increases the default risk. This is exactly what the financial markets are saying to us. The rate of interest on Irish bonds is over 10pc because the market thinks that the “ECB” approach will make default more, not less, likely.

Unfortunately, our deep establishment — the political, the academic and the media — has adopted a position which sees any questioning of the euro project as being “unpatriotic” and “dangerous”. Therefore, debate on the currency and the likely trajectory for the Irish economy and people is being actively quashed because to question the wisdom of European central bankers is being seen as unpatriotic. When did questioning a German or French banker’s motives and intelligence become anti-Irish?

But this is what has happened. The ECB — which is only a central bank after all — has a veto on Irish economic policy. Isn’t it time for all of us to question just who are these people, who has mandated them and who are they to dictate anything to anybody?

These guys are there to represent the banking industry, not the people. If the banks’ interests and the people’s interests move in tandem, then the ECB’s world view might reflect our world. But when that changes, as is the case now, we should change and they should listen. But will that happen? Not likely.

Anyone who actually cared to think about it and had any experience with European central bankers would have known that giving a faceless bunch of central bankers the veto over economic policy might have resulted in problems. In the boom, the legates of the ECB in Ireland — top brass of the Irish Central Bank and the Regulator — failed miserably and the ECB did nothing. In fact, the ECB presided over a financial crack house with banks in the core lending recklessly to banks on the periphery.

Now the ECB is behind the policy of paying bank bondholders every cent, while the real people of countries like Ireland have to endure deep reductions in their living standards. The logic is that all this austerity will somehow lead to economic growth.

But we know that the Irish economy is shrinking, bank lending falling, insolvencies rising and unemployment rising. This is not growth; it is the opposite of growth. The problem with the ECB is that it seems to believe that there is no economic problem that cannot be answered by austerity.

So, for example, when the economy is growing and in danger of overheating, the solution is cuts in public expenditure and increases in taxes. But when the economy is moribund and in danger of depression, the answer is again, more cuts and increased taxation.

When there is inflation, the answer is austerity and when there is deflation the answer is austerity and when there is stagflation the answer is — yes, you guessed it, austerity!

So these guys are stuck in an intellectual cul de sac. They have only one policy solution for every economic problem.

For Ireland, the end of the cul de sac is a sovereign default. In addition, by reducing people’s wages we involve ourselves in a race to the bottom. If every peripheral euro country cuts wages as the way to growth, we will cannibalise each other. This would truly be a one-way ticket back to poverty on the periphery of Europe — which was precisely what the EU regional funds and years of regional policy were supposed to arrest.

The EU is waltzing up a financial, economic and ultimately political cul de sac. It is now threatened, not by the likes of Ireland and Greece, but by its own central bank. Students of the 1920s and 1930s, when overly powerful and ultimately stupid central bankers helped destroy the world economy, might not be too surprised by this.

But what was that they said about history: “Those who don’t learn from it are destined to repeat it”.

  1. paddyjones

    Whats the alternative to austerity? spending more, accumulating more debt? I think David is only looking at this from an Irish perspective. Most of Europe ( well the top half ) are having wage increases e.g. the Germans at 3.5% and inflation has reappeared hence the rate rise.
    We must tighten our belts our spending is 50 billion and our income is 30 billion thats a huge gap, in fact the budget deficit was 9.9 billion for the first 4 months.
    Its hard to believe that the rest of Europe excluding the PIGS are back in business and doing ok. Unemployment in the eurozone is below 10% and alot of that 10% are PIGS. In Holland unemployment is 4.3% in Bavaria its 4%.
    For us PIGS austerity is the only answer , we must right size our economies, after all what is produced in the PIGS compared to the rest of Europe ….not alot.
    We allocated all our capital into non productive property assets and for the next 20 years we will be paying down debt. we PIGS sold our soul for a boom.
    David is crying over spilt milk, kicking out at the only friend we have left …..the ECB.

    • imithe

      I think David’s logic makes more sense.
      Less spending => more unemployment => higher dole bill and less income tax => sovereign default

      • paddyjones

        I believe in the ECB theory
        Austerity=> balanced budget=> repayment of debt=> no default

        • Rory

          Paddyjones of the Dept of Finance would of course say that. The spending 50 while earning 30 argument is always trotted out as an explanation for the present austerity. It is cant. It deliberately ignores the 100bn+ debt of the banks. If we did not have to pay the gambling debts of the banks we would be able to borrow at a much lower rate and with much less pain. Go ask the markets what would happen if we dumped the debt. Has anyone asked the markets? Do we know the cost if we dumped the gambling debts which we, the people didn’t accrue? Having to pay 100 on top of the 20 difference is what is killing us.

        • Philip

          Austerity => balanced budget? I just cannot see how a dwindling number of private sector employees with lower and lower wages and higher insecurity will ever make this happen.

          • +1 comment left


            Property tax is a good joke. Germany manages its property sector carefully and has avoided bubbles over the past ten years with prices kept stable partly by a property tax. We’re contemplating a property tax in a market holding on by its fingers against mortgage default and factored against bubble prices?


            The Authorities will complete a comprehensive review of expenditure which will form the basis for the allocation of binding multi-year expenditure ceilings by expenditure vote group with the aggregate expenditure envelope underpinning the governments’s fiscal targets under the EU/IMF financial assistance programme and the Stability and Growth Pact provisions..”

            Translated from stoogespeak, “we’ll force multi-year interdepartmental budget cuts required of us by the terms of financial assistance programme and the Stability and Growth Pact provisions and we will comply with all similar directives from the Borg Collective”

            The only way the above can be achieved is by massive redundancies in the Public sector, if wages are to be protected!

            So economy is on track for stasis, stagnation, and death of the domestic economy, ..hope exports pick up:)

    • irishminx


      I can not agree with you and if you think the ECB is the only friend we have, then I’d wouldn’t like to see our enemies!

      Go smell reality soon, please.

      • Nina Ogden

        The “students of the 1920′s and 1930′s” know that the stupid bankers were challenged by FDR’s Glass-Steagall act,which separated commercial banking from speculative banking. That Glass- Steagall Act was the model for banking, not only in the U.S., but throughout the world. until it was taken down in 1999. Now, Ohio Congresswoman,Marcy Kaptur, and her cosponsors, have put the reinstitution of Glass-Steagall back into play by filing HR 1489. If this bill is passed. and we will make sure it is, the ECB will not have a leg to stand on when they try to squeeze their banking debts out of the people of Ireland… or Portugal… or Greece. The ECB is worried about the True Finns and the Iceserve No referendum, now they should be frantic about the return of Glass-Steagall.As irishminx said, “The ECB king has no clothes” Glass-Steagall strips their power away.

        • uchrisn

          Yes legislation seperating the commercial banking from speculatibe banking should be re-introduced. The lobby against it will be strong and wealthy and unfortunatly may prevail in the US due to the democrats need for election money in ’12. They have cosied up to the bankers since the Republicans got all the finace funding money in Novemebers mid-terms.

    • dshelton

      If I was obese I certainly be austere in my eating habits but if I was too thin I would stimulate growth.
      An economy thats Anemic can only be further damaged by withdrawing it’s “food” We need a prudent policy of managed recovery and growth.

      • +1

        Austerity always was and still is the means of the IMF banking mafia and now the EU Commission for extortion of peoples assets.

      • Bamboo

        Exactly. Now the GOV is saying “Live Register falls slightly”.

        The way it is done is quite simple. People’s dole payments are stopped and they are taken off the live Register without any notice and voila!!! Problems solved.

        • Praetorian

          Austerity is implemented because it works for elites, it keeps the rabble in line and under pressure, reduces wages, benefit and roles back the progress from labour struggles and negotiations. Social engineering 101. The rich are untouched by austerity.

    • SeanOC

      @paddyjones – I agree with you on this. David Mc is peddling the same tune i.e. default is inevitable and the only game in town. BTW you may have noticed many of the US hedge funds who have bet the house on a Euro default are increasingly crying-out for a default. Becareful what you wish for.

      These opinions are being given without fully assessing the likely consequences and alternatives. If you assume that the debt is unsustainable the options are:

      (A) default on sovereign debt (making the hedge funds rich in the process – best of luck to them) and causing a chain reaction which will make Lehmans look mild by comparison. The largest sovereign default in modern history was Argentina, a default by Greece alone would be 5 times larger and this is before taking into account the cascading effect into its banking and corporate sectors AND before including Ireland, Portugal and others who will follow. Anyone who thinks an involuntary default can be contained or “draw a line” or “improve the current situation” for Greece or any of the other PIGS is just not credible OR

      (B) alternatives such as voluntary debt repurchases and offering investors asset switchs, but in each case working with our ‘friends’ in the ECB, who – more than ever – have an extradorinary vested interest in dealing proactively with the PIGS. Greece has already started a process of buying back its own debt taking advantage of prevailing discounts albeit only out to 6 months so far. If they had the support of the ECB et al they could escalate this activity further and critically impose voluntary losses on bondholders without triggering CDS contracts and incurring the substantial risks associated with an involuntary default. This is one of many alternatives (in itself not sufficient) which should be explored well before the nuclear switch is hit and sooner rather than later!

      • JohnD15


        Not friends in the classic sense. More like a mutually dependant relationship – which by the way should be exploited more by Ireland!!! I agree with your views on the default scenario….woudnt be pretty and maybe not necessary i.e. other avenues to explore first.

        I have to laugh at PIMCO and others Wall Street parties (as well as many in the British media) demanding a eurzone PIGS default and an end to the ‘hardship’ for indebted countries. Is it possible that they have an ulterior motives/conflicts of interest!?

    • Deco

      kicking out at the only friend we have left …..the ECB.

      With friends like this…who needs enemies ?

      The ECB is protecting the bondholders.

      Google “Anglo Bondholders Revealed” and make sure you don’t get scelped twice !!!

    • doflynn

      Anyone out there got a whip for self-flagellater PaddyJ – I think he missed a few spots on his back.

    • mcsean2163

      Agree with pj. The eu didn’t force us to guarantee the banks.

      Phase 1: eradicate deficit – we can’t default on the eu and then turn around and ask them for mo money. We haven’t got a leg to stand on when we’re still paying our public astronomical wages and finding ourselves 18bn in the red each year.

  2. irishminx

    Brilliant David, I concur. The ECB has NO mandate from the people. What I truly don’t understand is why we are not shouting from the top of our voices, The ECB king has NO Clothes! Or maybe that’s the problem, that the ECB believes it is King?!?

    Power corrupts, absolute power corrupts absolutely!

  3. This discussion parallels the excellent “Fight of the Century” video (between Keynes and Hayek), but there may be a synthesis that would pull the best parts of both views together –

  4. David,

    I agree with you that European dogma has replaced Europeam pragmatism in the last decade or so. Having worked as an intern within the European Commission a few years back, I also believe that the EU Dogma syndrome is also quite prevalent throughout the Commission, and must therefore, also be partly to blame. It is almost like as if a large self-sustaining bubble exists within Brussels & Frankfurt and those who are followers of this “Euro-bubble”. This Euro-bubble has taken on a life of its own and is now fundamentally disconnected with the people(s) it is supposed to serve. This disconnect needs to be redressed if the Euro project is to have any chance of surviving long-term. The only way to do this I believe is that if citizens within Member States work together and call for root and branch reform of the Euro-project so that it regains its pragmatism and concentrates on key areas of strength (e.g. Single Market; Competition; Environment; & Security) and leaves other issues which I don’t think that the EU institutions should be dictating policy on (e.g. monetary afairs; fiscal policy; foreign policy etc.)to individual Member States. By all means, if smaller groups of Member States want to co-operate on such issues they should be given the right to do so, but equally, Member States that do not want to participate should be allowed to opt-out without any negative repercussions.

    • doflynn

      Far too much common sense in there Michael for any self-respecting official or politician to take on board.

  5. Good article. Could it be true to say that ‘austerity’ is a financial tool to transfer more of the real resources away from the ordinary workers
    just to be handed to the dirty selfish oligarachs & elites.

    • Yes, most certainly, Scania! It’s this to which David says “Enough!”, but few governments worldwide are listening to their people. They’re in the hands of the plutocrats.

    • Rory

      Yes Scania, spot on. I read Naomi Klein’s Shock Doctrine at the start of the bust and everything she said that was inflicted on various economies around the world by the IMF is now being inflicted on us by the troika. It is a Friedmanite neo-liberal ideological transfer of wealth from the people to the elite. The reason it makes no sense is because it is ideology, a failed ideology, just like communism, which transferred wealth from the people to the elite. The reason none of the propaganda makes no logical sense is because it is ideology, not logic.

      • You have to ask further…. so what happens after the wealth transfer, this fucking heist, is finished?

        Guess why all over the world people in main positions are exchanged for no brainers, compliant YES sayers…. see german central bank.

    • Could it be true to say that ‘austerity’ is a financial tool to transfer more of the real resources

      100% correct!

      • Deco

        I think you are correct.

        Debt gets transferred to the people.

        Public assets like the ESB and Coillte get transferred to private sector interests who provide directorships to The Drumcondra Ditherer, in order to pay the debts.

        Real capitalism is where Anglo fails, and all the idiots who believed all the drivel coming from Seanie Fitz get burned for their stupidity.

        In our ECB based system, the cost of stupidity gets transferred to the obedient taxpayers.

  6. stiofanc02

    Another way to look at is ” what we learn from history” is that “we learn nothing from history”. Get as much social welfare and dole assistance as you can as this is the only way to break even, more or less.This is the “new dole” peoples attitude. Can you blame them? Then when we do get back to growth, they can start earning enough without assistance. This is the mantra on the Irish street and I dont blame those “new dole” people one little bit.Do you? However, some of these will never work again and we are creaing a new branch and permanant “new dole” 4th class of people. Formerly lower to middle class now “new dole” 4th class with a taste for decent wine and formerly self employed. Its actually sad and tragic.Use to take a foreign holiday. Coming to Ireland soon! Sooner than you think! Higher crime rate, obese children, more drug use, more divorce,lower IQ’s, cancer, smoking, alcoholism, endless Nintendo playing, excessive television watching, marginalized folks who should be doing better than their fathers, will not.Lucozade will replace the wine but will be a Centra knock off that is more affordable. God help these and me to keep my kids away from them. Thank you ECB. Thanks a lot.

  7. adamabyss


  8. ahimsa

    This excerpt from Karl Polanyi about the tensions leading up to Word War I provide a foreboding about the current global system:

    “For another seven years peace dragged on but it was only a question of time before the dissolution of nineteenth century economic organization would bring the Hundred Years’ Peace to a close…….The true nature of the international system under which we were living was not realized until it failed. Hardly anyone understood the political function of the international monetary system; the awful suddenness of the transformation thus took the world completely by surprise…..The dissolution of the system of world economy which had been in progress since 1900 was responsible for the political tension that exploded in 1914.”

    • Agree entirely. Britain’s aristocracy was spoiling for a fight with Germany to ‘remedy’ its economy.

      If the west can’t emerge quickly from the current trough, you can bet the plutocracy will be gunning for China – nuclear weapons notwithstanding. They’re mad; but they’ll still promote a ’cause’ which the sheeple will dutifully follow.

      For that matter, interesting to consider whether a Hitler could have arisen had not the depression come to overlay Germany’s impossible WWI reparations?

      As the Marshall Plan was to the Treaty of Versailles as day is to night, maybe we do learn some lessons?

      • Gege Le Beau

        @ Bryan, its an interesting one, the factors that gave rise to Hitler/Nazis which were multi-factorial. Versailles Treaty, seen by Hitler as a ‘stab in the back’ by the ‘November criminals’, lunatic reparations, loss of territory, reduction of the proud armed forces, political corruption, Wall St. crash, massive levels of unemployment, run away inflation (where overnight savings were wiped out, people bringing wheel barrows of notes to purchase bread and other essential items), the list goes on.

        Today, it is interesting to note the rise of the right in Europe and the US (even the Economist is covering the story which has been in the pipeline for a decade or so), the demonising of immigrants, criminalisation of the poor, the attack on the public sector, austerity across several countries ‘in order to stimulate the economy’ when in actual fact it is designed to drive back Labour gains and workers rights, in France it was deemed part of Sarkozy’s attempt to ‘Americanise the French economy’, fortunately French workers showed him the limits of his power as they had done with De Villepin.

        Interesting article yet again from Chomsky, doubt it will be discussed at Davos any time soon.

    • Deco

      There was also an issue of all countries having an aristocracy which one had one career path….”war”. Well, maybe in Germany and Britain there were some who were more interested in science, commerce, and imperial administration. But over time even there the aristocracy were trying to solidify their importance to the society with an increase in militarization within society.

      Be wary, within your society, of those who can profit, or who rely upon their priveleges, for war to come into existence.

  9. MT25

    How ready are we to revert to punt if we have to? I’m sure our German neighbours have Deutch Mark II at the ready. Angela knows which button to press on meltdown day, but does Enda have such a button?

    • uchrisn

      Germany going back to the Deutchmark suddenly would be completely impractical. It would be much easier for a small country like Ireland to leave the Eurozone.
      Just on one point, if Germany were to start the Deutchmark, the subsequent demand for the deutchmark and selling/crash of Euros would make German exports incredibly expensive around Europe.

      • MT25

        I agree that Germany as the main beneficiary of EMU is unlikey to leave the Euro (unless we see out of control inflation etc.) I would be very surprised, however, if they don’t have a back up plan in case of total EMU collapse (e.g. in the event of peripheral countries defaulting and leaving). I have never heard of an Irish hypothetical worst case strategy. this would be useful for many reasons – not least to bolster our debt negotiating position.



    This is so important for everyone to understand, and I pledge to David to go the extra mile and write a dedicated article from his point of view on the entire Issue of central banks, and not to scratch only on the surface.

    YOU, as in the people, have to do some homework and educate yourself further on the structure, history and even more so recent changes in central banks around the world. You own this to yourself to look behind the smoke screens, and it is no rocket science either.

    David’s article scratches only on the surface of a much larger and for once truly systemic problem of the so called democracies around the world!


    I shall give you some ideas where to start.

    According to a triennial central bank survey by the Bank for International Settlement, BIS, the average DAILY 2010 turnover has risen to 4.000,000 billion compared to 3.300,000 billion in 2007.

    The above describes the global foreign exchange market, FOREX. This is a 20% increase to 4 trillion.

    With the end of the Gold standard central banks were implemented all over the world.

    Use the Internet to do some research on the matter. How? Here is an example and a quote:

    In 2008, the New York Fed advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed and participated in the secret weekend negotiations. In September 2008, the Federal Reserve did something even more unprecedented, when it bought the world’s largest insurance company. The Fed announced on September 16 that it was giving an $85 billion loan to American International Group (AIG) for a nearly 80% stake in the mega-insurer.


    Be honest with yourself! Ask yourself, what do you really know about the central banks, their history, their powers, and the recent changes in the past few years?

    You have a choice, you die stupid, or you die knowing, but you will die, the choice is yours.

    If you understand what the problem with central banks REALLY is, you will understand why our democracies are failing to be democracies, you will understand how true power dynamics is executed, and you will start to ask the right questions, and eventually, you will tell your children, and so it starts….


    • Deco

      Before the crisis erupted, they managed to catch the evidence necessary to bring about the resignation of Eliot Spitzer, NY Attorney General.

      Why were the cameras not watching who the bankers in Wall Street were screwing ? Why was the media only interested in bringing down their nemesis ?

      • Praetorian

        @ Deco – Business run society, you take it on, you get taken out.

        You run with it and you get looked after especially if you make generous political contributions.

  11. HAC


    FACT! Ireland voted “NO” to Lisbon!

    FACT! Ireland voting “YES” when unduly pressured!

    Is Europe a Democracy for Banks or a Human Collective Society?

    The Treaty establishing a Constitution for Europe is preceded by a Preamble which recalls, among other things, Europe’s cultural, religious and humanist inheritance, and invokes the desire of the peoples of Europe to transcend their ancient divisions in order to forge a common destiny, while remaining proud of their national identities and history!

    FACT! Article 27 Irish Constitution States!


    Reference of Bills to the People

    Article 27
    This Article applies to any Bill, other than a Bill expressed to be a Bill containing a proposal for the amendment of this Constitution, which shall have been deemed, by virtue of Article 23 hereof, to have been passed by both Houses of the Oireachtas.

    1. A majority of the members of Seanad Éireann and not less than one-third of the members of Dáil Éireann may by a joint petition addressed to the President by them under this Article request the President to decline to sign and promulgate as a law any Bill to which this article applies on the ground that the Bill contains a proposal of such national importance that the will of the people thereon ought to be ascertained.

    2. Every such petition shall be in writing and shall be signed by the petitioners whose signatures shall be verified in the manner prescribed by law.

    3. Every such petition shall contain a statement of the particular ground or grounds on which the request is based, and shall be presented to the President not later than four days after the date on which the Bill shall have been deemed to have been passed by both Houses of the Oireachtas.

    4. 1° Upon receipt of a petition addressed to him under this Article, the President shall forthwith consider such petition and shall, after consultation with the Council of State, pronounce his decision thereon not later than ten days after the date on which the Bill to which such petition relates shall have been deemed to have been passed by both Houses of the Oireachtas.

    2° If the Bill or any provision thereof is or has been referred to the Supreme Court under Article 26 of this Constitution, it shall not be obligatory on the President to consider the petition unless or until the Supreme Court has pronounced a decision on such reference to the effect that the said Bill or the said provision thereof is not repugnant to this Constitution or to any provision thereof, and, if a decision to that effect is pronounced by the Supreme Court, it shall not be obligatory on the President to pronounce his decision on the petition before the expiration of six days after the day on which the decision of the Supreme Court to the effect aforesaid is pronounced.

    5. 1° In every case in which the President decides that a Bill the subject of a petition under this Article contains a proposal of
    such national importance that the will of the people thereon ought to be ascertained, he shall inform the Taoiseach and the Chairman of each House of the Oireachtas accordingly in writing under his hand and Seal and shall decline to sign and promulgate such Bill as a law unless and until the proposal shall have been approved either

    a. by the people at a Referendum in accordance with the provisions of section 2 of Article 47 of this Constitution within a period of eighteen months from the date of the President’s decision, or

    b. by a resolution of Dáil Éireann passed within the said period after a dissolution and re-assembly of Dáil Éireann.

    2° Whenever a proposal contained in a Bill the subject of a petition under this Article shall have been approved either by the people or by a resolution of Dáil Éireann in accordance with the foregoing provisions of this section, such Bill shall as soon as may be after such approval be presented to the President for his signature and promulgation by him as a law and the President shall thereupon sign the Bill and duly promulgate it as a law.

    6. In every case in which the President decides that a Bill the subject of a petition under this Article does not contain a proposal of such national importance that the will of the people thereon ought to be ascertained, he shall inform the Taoiseach and the Chairman of each House of the Oireachtas accordingly in writing under his hand and Seal, and such Bill shall be signed by the President not later than eleven days after the date on which the Bill shall have been deemed to have been passed by both Houses of the Oireachtas and shall be duly promulgated by him as a law.




    • MT25

      Know anyone who’ll stand for President who will envoke our constitutional laws? It would be nice to have someone to vote for. This may be Bertie’s last chance!

    • @Hac,

      The problem I have with above is the blurred lines that are drawn between membership of the EU and membership of the EURO PROJECT or the EMU.

      I’m a supporter of membership of the EU but not a supporter of membership of the failed euro project, which I believe is proving to be a disaster for the EU PROJECT as a whole.

      No doubt some will point out the technical clauses in the EU Treaty binding us to the euro through our membership of the EU, so that currently it is difficult to reverse out of the euro project without reversing out of the EU.

      But we can negotiate our way around this:)

  12. All treaties between great Nations cease to be binding when they come in conflict with the struggle for existence.

    - Otto von Bismarck -

  13. Excellent article. Yep the ECB is doling out stasis, stagnation and moribund pills to the periphery to follow its crack from a crack house lending policies.

    The message needs to be strongly shouted from the roof tops that the greatest threat to the EU, is the ECB itself. ECB is sowing divisions of impoverishment and reckless incompetence across the EU.

    The true Finns will become a tidal wave against the ECB. They’ve pointed out the bailouts are not working and EU money is being poured down the drain.

    As Ken Feinberg says above, “Europeans are slowly figuring out they got royally screwed by bankers. Assuming bank debt, taking responsibility for bankers’ recklessness – is simply not in the public’s interest. I wonder when Americans will reach the same conclusion . . .”

    DmcW column above is in the tradition of Abraham Lincoln, interested readers interested in the subject would do well to read the link below.


    “Let them beware of surrendering a political power which they already possess, and which, if surrendered, will surely be used to close the door of advancement against such as they, and to fix new disabilities and burdens upon them, till all of liberty shall be lost …. ”

    American industry and enterprise is being ransacked by the banks. Our country has been left bleeding to death by a wound caused by the ECB and its corrupt stakeholder allies in Ireland aided by incompetent brown paper bag politicians.

    It was so in Abraham Lincoln’s time, see here his Dec. 26, 1839 speech on banking


    We need more people like DmcW to wake up to the real threat against the EU, of which I’m a great supporter, that is represented by Europe’s greatest democratic deficit, the ECB.

  14. conor_obrien

    Hi David,

    Superb article. I am currently a student over here in Leuven in Belgium at the moment and it’s blatently obvious that the heads in Brussels are not calling the shots anymore. This is a terrible situation. I believe what we need is intelligence reform. I refer here to Malcom Gladwell’s story ‘connecting the dots’ about why the Israeli failed to predict the Yom Kippur War, very interesting story and strong parallels with the Irish, and European response for that matter, to the crisis.

    • uchrisn

      There is a real danger that people will confuse the ECB with the European Parliment Commission or council.
      It is an independent organisation. The ECBs undemocratic technocrats who are in no way representitive of the people of Europe can and are causing great damage to European solidarity.

  15. BnB

    When the ECB chief Jean-Claude Trichet was a top official in the French treasury in the 1990′s, he signed off on Credit Lyonnais’s accounts which hid the bank’s huge losses. At the end of the subsequent trial in 2003, three men from Credit Lyonnais were found guilty of fraud but Trichet was cleared.

    Credit Lyonnais had lent extravagently and when it could not recover the bad loans, it had to be bailed out at a cost of tens of billions of Euro by the French government. Does that sound familiar?

    Now, let’s give Jean-Claude the benefit of the doubt about his role in that affair. After all, he was found not guilty of criminal involvement, and anyone can make a mistake. You would expect, however, that the experience of his trial and the huge cost to the state would have focused his mind on the dangers of reckless lending and would have made him very suspicious of banks. ‘Au contraire’, in the following years he led the ECB which turned a blind eye to all sorts of lending that was clearly unsustainable and often backed up by false accounting.

    Of course, none of this will stop the glowing tributes to Mr Trichet and his wonderful career when he retires later this year.

    • MT25

      very interesting comment

    • Deco

      very interesting indeed.

      He seems to fit the description of “a safe pair of hands”. Exactly the sort of banker that our advertising sponsors would want in charge of matters.

    • BnB

      According to a BBC website article from the time of Trichet’s appointment to the ECB top job, “Crucially, he also commands the almost universal respect of the financial community”.

      He appears to have earned that ‘respect’ in the last few months when the ECB refused to consider that the banks’ senior bondholders would suffer any losses, as both Brian Lenihan and Michael Noonan have said.

  16. VincentH

    Sorry I must disagree. We tore the arse out of the economy not the ECB. And then compounded the error with the nod wink and wave of the old school tie.
    Within a currency union the only way for things to rejig themselves is for the banks to go to the wall. It would be the same as if a Limerick bank went bust, you would let it die. This reduction in wages and social welfare is doing nothing more that frightening the horses.
    What needs to happen soonest is a mechanism for a homeowner to buyback his mortgage at a discount of say 50%. And the only way this can happen legally speaking is for those comatose banks to go into examinership.
    Whats going on at the moment is the status quo of 2000 along with the status quo of ’08 and that of 09 ’10 and this years tinkering. Two pillars my arse.

  17. wills


    I Agree with the articles main points.

    The political disenfranchisement of the citizens of the *euro* is a key point.

    The euro project itself is a pOnzi scam.

    The euro is a paper money pOnzi scam.

    The ECB is the hub of its operations.

    Perhaps back in the day, before the fall of communism, the rise of China, teh rise of the internet, etc the euro seemed like a positive idea.

    ANd the euro had its positives.

    But, I reckon its the fact that the euro has been so successful because of a multitude of reasons like some of the ones above there I mention that it sucked the greed out of people.

    So the PIIGS went beserk in greed and the main euro insiders did too but their greed is of a different order.

    Also, the EU is a front for old empire.

    The structures of the old empires of France, Germany and Spain are still in place.

    The old empires are still in command behind the ECB, behind BASEL, etc.

    The EU project is a european empires *train set.*

    The euro is the *train set’s* electricity.

    So, you make a spectacular train set so you make a reason to have to make a spectacular electric company to run the train set and so we get the euro.

  18. wills

    Jeffery D Sachs the shock doctrine boy genius just penned an article the other day. In it he asserts the west is drowning in corporate fraud.

  19. Colin

    Great article David, agree with everything you say here.
    Another example of the EU gone mad is their long term goal to admit Turkey into the EU, against the wishes of most of the people in the EU. Turkey moans about being on the outside and calls the EU a Christian Club. Well we’re only Christian by the grace of God, after key battles down through the centuries which forced back Muslim armies on 3 different southern European Peninsulas, including the Balkan peninsula invaded by Ottoman Turks.

    • wills

      Whatever else about Islam etc all I know is where there is an invasion there is economic self interest and swag and plunder to be had.

      • Colin

        Yes, so why would you invite an invasion on your own territory? Its self defeating unless you have a death wish.

        And before the Osama Bin Laden sympathisers get on their high horse, I want to see those countries like Turkey, Egypt, Tunisia, Syria etc… prosper and thrive and enjoy as high a standard of living as possible so that they’ll no longer advise their own young people to go and make a better life for themselves in Europe.

  20. hughsheehy

    This is quite a bizarre article.

    Advocating inflation as an economic solution – without mentioning the well known downsides of inflation – is hardly giving an honest presentation of the possibilities.

    Inflation has historically proven to be a terrible plague on economies and on people. Presenting it as if inflation would give everyone in Ireland a free pass is (IMHO) deeply disingenuous. Inflation has a habit of causing austerity too. Having lots of paper in your pocket doesn’t help buy imports.

    Similarly, for the Irish state to try to fund even its own deficit in a new Irish punt would be a huge struggle and the inflation would likely be horrific for the economy.

    Does anyone imagine that – once we had defaulted and moved to an Irish pound (which is difficult or impossible anyway) – that we could somehow have a once off inflation and that then we’d suddenly have a nice neat stable currency again immediately after that? Dream on. Inflation is a difficult genie to put back in the bottle, particularly if you’re a small open economy with an ongoing fiscal deficit.

    In the meantime, much of David’s article depends on things that just aren’t reality. (i) we don’t have an Irish pound to devalue and (ii) we don’t owe money in Irish pounds.

    • uchrisn

      Hugh perhaps you could google the Hong Kong Dollar. HongKong actually does so much trade with the states the Chinese Yuan is not useful for it. It pegs itself to the US dollar. Due to its large balance of trade it has enoug US dollars to use as a resevse against its currency. So if you go to the bank they will always be able to exchange you HK dollars for American at a rate of about 8-1. So the currency is stable.
      I would suggest Ireland pegging our currency to a combination of the Euro, Pound and US dollar. It might be complicated to set up and run, however it would be possible.

  21. donal jackson

    I believe it’s time to look for Mr Triches’ resignation. You should broach subject on a national stage David. This guy is wrong and he doesn’t know it.

  22. uchrisn

    As Dr. Stiglitz pointed out in 2004 when addressing the UN on the subject of European Integration, one of the main dangers for the Euro and Europe in General was the lack of representation of the ECB of the poeple of Europe. He felt that the represented the interests of the financial industry first and the workers second. He suggested that representitives from workers unions should sit on the executive board as in some Latin American countries.
    Actually apart from being from a banking or finacial industry background the 6 members of the executive board are exclusively from Germany, France, Italy and Spain. There is an informal agreement in place that they are replaced by people of their own nationalities when they step down. The complex system of the governing council also favors the larger countries.
    A recommendation for a better way to appoint them is here
    Mr. Stiglitz, Mr. Pisani-Ferry, David have all been proved right in their opinions.
    Why are they not being listened to now?
    I suppose you would have to agree with Dr.Sachs article above.
    In any case we now find ourselves in a monetary system which in unrepresentitive of European people in General and Irish people in particular.
    No wonder there is 14% unemployment.
    We have been extremely agresively threatened by the ECB. There is no stronger threat than not giving us any more Euros, bar invading Ireland with Military force.
    We should step out of the Euro and remain in the single market.
    We should make very clear our reasons for doing so and I’m sure Dr.Stiglitz and other leading economists would support us.

  23. uchrisn

    On the point of workers in Europe. There doesn’t seem to be any pan-european workers representation. I wonder if the trade union leaders in Ireland have made any effort to contact their European counterparts as part of their response to the crisis.
    Europe really needs strong workers representation now to make sure they are treated fairly by multinationals and company owners. By the way we are in a sinlge labour market.
    Imagine a EU wide strike against bailing out bankers and the rich? Certainly from reading comments in Spanish and Italian newspapers there are many middleclass europeans who are just as angry as us at Ireland bailing out bankers.

  24. uchrisn

    I should say that the integration of Europe has been a very positive experience and has helped and is helping many countries to grow and develop. However the idea that Europe is an Optimal Currency Area should be analysed more closely in repsect to the cause and response to the crisis. The fair representation of the ECB of the European people and regions should be made a priority by the EU commision and Parliment.

  25. notmydebt


    I totally agree with you on the issue of the problem caused by our inability to devalue and I covered alot of what you say on the subject in my post of a couple of weeks ago, . There is also a suggestion there of how we might address this.

    The issue of the ECB, an unelected, undemocratic organisation, now controlling strategic government policy as illustrated by their forcing the Portuguese government out of strategic state assets, is one not just of lost sovereignty but also one of lost democracy.

    In order to see what we are allowing to happen to Europe it is worth taking this to its logical conclusion and imagining what kind of Europe we would be left with.

    Once upon a time dictatorships were achieved by military means, now it seems it could be happening by financial means.

    • In order to see what we are allowing to happen to Europe it is worth taking this to its logical conclusion and imagining what kind of Europe we would be left with.

      A totalitarian corporate kleptocracy!

  26. John Q. Public

    Create a couple of new Irish banks (all deposits guaranteed by government). Watch the deposits flow from BOI+AIB etc. to the new banks. This is what happened with Anglo a couple of months ago, in fact AIB now hold the old Anglo deposits. Allow the old banks to collapse without hurting deposit holders and say ‘tough luck’ to the ECB and tell them it’s called capitalism. Who loses? the ECB but they can print more money, is that not how the fractional reserve system works? The bond holders get a double whammy because they are being bailed out by the ECB and can lend to the clean and healthier new Irish banks that will be better regulated. Makes sense to me.

    • uchrisn

      John, nice idea, the ECB have threatened to stop sending Euros to Ireland completely. They would give you the same threat again. How would you respond to them?

      • John Q. Public

        You mess with me and I’ll mess with you! David says below to bring the whole thing forward and it’s the best option.

  27. Breaking news: Entire Nations prepare for the day of the MEGA CRASH OF CURRENCIES

    Within two months, central Bankers in Mexico oprdeed 93,3 tons of Gold according to FT, this is the equivalent of USD 4,5 billion, approx 7250 Gold bars and round about 4% of the entire reserve fund of Mexico’s central bank.

    This is not a single event, China, Russia, Iran and India bought massive Gold reserves as well.

    These events indicate an end to the era of foreign government bond Investments. Silver is still on it’s way down, loosing 22% within a week.

    The Dollar is finished, so is the Euro, all that is left is to maintain status quo at all cost, and this they do, the FED and ECB et al.

    We witness the slow death of the global dollar hegemony, and inevitably, more wars and more war profits will be the consequence.

    The next war coming live to you over your cable TV will possibly be on the stage in Iran, such are the plans and wishes of the House of Saud, these god damn desert bandits and other interests form USA to Israel. …Watch that space, it might not take much longer than a year…

    • Georg
      I hope everyone reads your comments on this blog with attention. You are waltzing around plutocracy and the elites behind the private central banks. Rory like me was enlightened on reading Naomi Klein’s Shock Doctrine as I have stated here before the Irish people are are a classic case of a “state of fear” IMF package included. Listen to Lenihan on how a political G20 meeting made the decision. Geopolitical financial warfare coupled with resource wars is happening in front of our eyes we are not even a pawn on the big chessboard. Our greatest asset is we life on an agricultural island with only 4m people. Watch the game unfold over the next few months between the big players. Meanwhile we will be complaining here when the IMF instruct the puppets to cut the welfare bill, the croke park deal and move on privatization.

  28. uchrisn
    Here is a recent speech by a ECB executive board member where she talks about asset bubbles with reference to Ireland at the Uni of Vienna.
    I doubt these guys are planning many trips to Ireland. They should certainly be invited, perhaps by our Universities to try to explain to Irish people what they are at. It would be great to be able to ask them questions directly.
    Her solution to future asset bubbles- higher captial reserves and more stress tests for banks basically. Stress tests have not been working very well. Beijing failed to cool their house prices using controls on lending capital.
    Know what worked for Beijing in cooling their asset bubble? They made a law recently that 1 person can only own max 2 properties.

  29. Kevin Lyda

    I work in the tech sector and get paid quite well. I contribute a rather large amount every year to the public purse – and as I like a social safety net, a health system, public transport, roads, police, food inspectors and so on, I’m happy to do so.

    If the government wants to push wages down they are free to try. However I can pretty much work anywhere in the world. I am already underpaid compared to my counterparts in the US, the UK and so forth.

    Irish public services are also subpar compared to those of the rest of Europe. The rail network needs to be expanded. Schools need to be better. The Health System needs to be better. To some degree this can be solved by using the money we already spend more wisely. And I support that. But it also requires large amounts of investment to build the things we are missing.

    I have a choice where I can live. For family reasons and even, believe it or not, the weather I prefer Ireland. But if the current political wisdom is to cut my salary and cut public services, that equation can change. I can take my labour elsewhere, I can get paid more and I can contribute to another country’s public purse.

    Austerity has a cost. Driving down wages have a cost. I don’t think folks really understand that. They are not free.

    • Deco

      The Irish public services are subpar, because the management of the Irish public services are terrible.

      In fact the purpose of management positions in the public sector is to find employment for people who won’t work.

      • Kevin Lyda

        And austerity will fix that how? Remove ineffective managers and workers, fine. I support that. But you think offering lower salaries will attract better talent?


        • Deco

          Kevin – I share your scepticism that it will be seriously improved.

          but nothing is worse than paying fortunes to the likes of Rody Molloy, and chums, for all the debacles that we have seen in recent years.

          How do other countries do it ? I mean countries that actually have high levels of accountability, and performance in their public sectors.

          There is a difference between giving a paramedic an extra thousand euro a year, and giving failed board directors mega-pension deals, in terms of the performance that results.

          From what I can see it has very little to do with money, and far more to do with the calibre of people put in charge of state bodies, institutions and quangoes.

          We keep putting the wrong sort of people in charge. Shane Ross, TD, gave us fascinating insights into this sort of appointment, concerning large state bodies like CIE and FAS. And these muppets are then in charge.

        • Deco


          the answer is more and better meritocracy in Ireland.

          In the last four decades, we have actually become less meritocratic instead of more meritocratic.

          I think that this is the lasting effect of CJH on Irish state functioning. CJ never was bothered about meritocracy. It was all about obedience. We need to go back to meritocracy.

  30. DC

    An interesting comparison here – Has the Euro run its course? can the EU remain a stable political entity?

  31. dwalsh

    During the boom anyone who spoke honestly or rationally was labelled a crank and excluded from discussion. We now know that regulators, who were supposed to simply implement clearly defined cautionary procedures, were told “look the other way or look for another job”. And this ‘conspiracy’ of silence and omission was global — not local. It was coming down from the very highest echelons in the banking and financial oligarchy. There was no error or mistake in all of this. Only those myopic enough not to be able to see beyond the local scenario can miss such a BIG picture.
    What might be the impulse and intention behind this conspiracy? They want us to believe it was the greed and recklessness of rogue speculators; and ordinary folk taking on too much debt – and certainly there was a lot of that. The entire financial sector was set-up in such a way as to generate both greed and recklessness by means of the linking of pay (or ‘compensation’ as they like to call it in the top tiers) and short-term profit through a bonus culture. And debt was relentlessly promoted as the modern way of life for the ordinary man and woman through every media outlet. It seemed like a bizarre religious cult to those observing but not partaking. Levels of debt were generated many hundreds of times greater than the entire planetary GDP. Those levels of debt are now being revealed in stages; and there is yet some considerable way to go. Even here in Ireland we are aware we have not seen the final figures yet.
    I for one do not believe it was greed and recklessness; in spite of the fact that greed and recklessness were the primary fuels that drove the engines of the boom. I do not hold the fuel responsible for the intention and destination of the vehicle or the journey. The echelon in our world from which the impulse and intention that determined this debt crisis originated lies beyond the orbit of vulgar profiteering.
    So what is the intention? Can anyone here think beyond national debt and the ECB?

  32. Gege Le Beau

    We now live in a “Debtocracy”.

    We are all debt servicing agents, while those who refuse to get in line will get the debt collectors knock on the door before the home is seized.

  33. doflynn

    Practical protest, anyone? March, petition? So much wisdom and logic in here but who’s listening, apart from ourselves? I’m doing something, anything and everything I can think of; the weekly march, the petition, those are the two public efforts, but behind it, the texting, e-mailing, blogging, tweeting, chat-rooms, forums, the whole cursed shebang. Trying to saturate this bloody bog, get it moving – then let them try and control it.

  34. Gege Le Beau

    Oscar-Winning ‘Inside Job’ Director Attacks Economists’ Ties to Financial Sector

  35. Deco

    Watched Prime time tonight.

    Stephen Kinsella from Economics Department in UL told us that we were half way through the property crash. Much more to go. Gave us the overview, the statistics, based on similar crash experiences…sensible enough, and logical and cold.

    Angela Keegan represented Myhole dot ie. Blathered on about how Irish people would realise that bricks and mortar are an investment like none other. (she is right, but not in the way she thinks). Talks about value, and then delivers anecdotes about great value in the Gassorks site. It was like listening to a good looking version of Honest Tom. Except the whole thing was itself imaginary nonsense.

    The real estate profiteers, lobbyists, liars, scam artists, insiders….they have not gone away you know :)

    They are just waiting in the sidelines to start the same all over again.

    • Colin

      I watched it too. Flangela was talking out of her arse.

      • Deco

        My hole dot IE, representing hot air from an entire industry that talks out from where you indicated…..

        • Gege Le Beau

          thanks for update Deco, concur with Kinsella but would add the possibility of a complete crash not just this gradual decline we currently witness.

          • Deco

            It is back again to ‘hard sell’ nonsense, and trying to sucker ordinary decent people into oversized loans on shoeboxes. Apparently this represents “the good old days”.

            Kinsella talked about a ten year crash duration. And he talked about a 40-60% drop based on international experience. He has studied the phenonemon. It is is his job to provide dry, accurate answers on the topic. That is all we need. We don’t need anybody who is in the property sector, to start telling us things are looking up again.

            The key factor with regard to the property market is the jobs market. Unemployed people don’t launch bidding wars for McMansions in the leafy suburbs. We still have high unemployment in this country, and that controls the housing market.

          • Praetorian

            People need to ditch the Irish media if they are to have any chance of making sense of the world around them. I rarely tune in anymore as it is not offering me the kind of quality news and analysis that I require and expect, it is largely amateur hour (too many examples to cite), we are very poorly served as the line is so narrow and reflects the interests of the powerful and wealthy, ‘media outlets’ are afterall commercial entities not defenders of the public good.

            If you want something close to accurate informaion then you have to go to professionals, people who are crunching the data on a daily basis. I take on board the comments of Gurdgiev, Kinsella and others, the rest are just people with opinions, talking heads who are either ill-informed or deliberately misleading.

            Property in this country is going nowhere but down, but there is a sucker born every minute who is prepared to throw the dice and take his/her chances.

          • Colin

            Yes, a sucker born every minute is right, but I like Brent Pope’s maxim too, “never give a sucker an even chance”. RTE thrive on giving viewing-suckers spin in the hope that these suckers take the bait and buy property now. The way last night’s Prime Time show was framed was appalling. It wasn’t a debate at all. It was one expert (Stephen Kinsella) giving his prognostications on where we’ll be in a few years regarding property prices. Angela doesn’t understand property bubbles, but she needs to understand that cheap property is a good thing and that falling prices are a good thing and long may it continue, and that its morally wrong to ask first time buyers to fork out more than 4 times their income for their own home, just as its morally wrong to look for more than 30% of someone’s net income as rent.

            We still need a lot of people to change their old corrupt mentality of economic rent seeking, and we still have a long way to go.

        • Colin

          It just occurred to me there, why wasn’t Dan McLaughlin or Austin Hughes asked to come on the show to have a real debate with Stephen Kinsella? I mean, don’t DMcL & AH understand economics? Isn’t that how they got to their high positions?

          Perhaps they could also explain to us about the famous fundamentals, the unique demographics we have, the Irish culture of property ownership, the way we like living as far away from our workplace as possible (is it born out of fear we’d be expected to work longer if our commute was shorter?)…..lots of issues need clearing up from these guys, lets give them the opportunity on our National Broadcaster to explain this to us.

          • Deco

            Because…Dan and Austin and the rest from that era are damaged goods. They destroyed their credibility.

            They need a new face to roll out the old message.

            Same junk, different wrapper.

            New opportunities in the Irish media, from people who can talk up the Irish property market, and overconsumption, without any connection with the previous failed binge era. Leave your economics and your integrity at home, and become another cheerleader of the real estate “industry” in public.

            Except…we have learned, and learned well. Never trust the rogues that come to advise you on what to do with the fruits of your sweat and toil.

          • Praetorian

            @ Deco – could not have put it better myself.

            I checked out ‘Inside Job’ following the recommendation above, outstanding documentary, Ireland was another version of what was ochestrated Stateside, so similar in fact (with Iceland as well) that ‘rules’ were followed and implemented (like the complete like of regulation). Naturally, no such documentary will be made in Ireland, no Irish Michael Moore will emerge, for very obvious reasons, no, we get Prime Time and “is it time to buy a house yet”.

            We live in a shocking State, just how bad is revealed each day. I think Morgan Kelly was very close to the mark today in the Irish Times, both in his calls on the economy and the political side of things, I expect both Fine Gael and the deathly silent, Labour, to be swept away especially if the State collapses, which looks increasingly likely, such a collapse however may release new talents, new individuals, some hopefully who have been commenting rather sensibly on this page for quite some time now. There is a wealth of talent and commonsense out there, people who are easily prepared to put the country and now their personal finances first, the old order in all areas will have to be swept away before that happens and that may require a Tunisian style situation to arise, where the masses of people, currently silent and cowed, emerging and staking their rightful claim to the Republic.

            Despite insider politicians who seek to draw a line under things and ‘move on’, this story is far from over, indeed, it is just beginning.

  36. Deco

    Somebody mentioned Property Tax.

    Pay Property Tax, and help out NAMA.

    The irony of it all should not be lost upon us.

    Almost as bad as taxing work to pay for speculation gone wrong.

    • Praetorian

      If they can’t catch you at source (income tax), there are a range of other taxes which will do just that, so the elite can be kept in splendour and comfort, Kenny paid his cool €200,000, heads of semi-states multiples of that, civil servants who refused to stop politicians promoted and so on and on.

  37. silentobserver

    If it hasn’t been mentioned here I would encourage anyone to see the movie “Inside Job”. Very cohesive and succint analysis of the GFC. You could substitute a few names and make an identical movie about Ireland, without the veneer to investigate and “punish” those responsible. As I’ve said before, I have no background in finance, so this has been a rapid learning curve, thanks to the likes of the few with integrity in the sector, such as David, and a number of posters on this and other sites. There are a number of near comical parts to the Insider Job documentary -love the bit when the interviewer asks John Campbell, the Chairman of Harvard Economics Department about conflict of interest dislosure, using the example of a doctor promoting a drug that he has shares in- don’t think John Campbell even knew what “conflict of interest” meant, and proceeded to stumble incoherently through an answer- we need a few more journalists like this- that can get behind the polished facade to reveal these people for what they really are- dangerous, utterly selfish, morally bereft leaches on western society, that have created misery for the middle/working classes for their own enrichment on an epic scale. The sleezy connection between the private sector, academia and the regulatory sector in finance is the root cause of the GFC in all countries- do we, as a country have the righteous outrage/balls to do this? So far I’m not convinced. Until justice and sanctioning of the financial sector has been demanded and achieved by the public there will be no change in the pattern of looting the real wealth creators (ie the genuinely productive parts of society).

  38. silentobserver

    One politician at least doing his best- watch Stephen Donnelly’s speach on refernedum for bailout here- . It’s the video under ” My Call for a Referendum”.

    • I agree – this guy is the real thing and his speech once again reveals that the Emperor has no clothes.
      And just as they fell over their own so called principles to accommodate the budget and finance bill, so too will they vote against a referendum “for the public good”.
      Also sad to see how empty the chamber is?
      If you ever wanted proof that there is no such thing as debate in Ireland’s parliament watch for yourself and then email it on to your contacts;

      • adamabyss

        Good speech. First time I saw this guy on Vincent Browne just after he declared his candidacy for Wicklow I thought he was someone to watch. It’s a pity that he may as well be talking to the wall in there, and for that matter, a lot of people in the nation have no clue what’s going on. It’s way beyond their attention span to digest the specific details or watch a video like this one.

  39. Alanfromnavan

    I agree with most of what David says I just wonder why the Irish people have just rolled over and lay down and let all this happen to them. Whats wrong with us?

  40. Alanfromnavan

    Have we lost the ability to stand up for ourselves? Are we spending to much time on these web-sites when we should be on the streets.

    • irishminx

      The only conclusions I’ve come to with regard to why we are not on the streets, is one, apathy and two, people are so stressed out trying to keep their heads above water, financially, they are not allowing themselves to even think about taking to the streets, not to mind have the energy to?!?

      Your guess would be as good as mine.

      However, there are a lot of groups out there silently working away and keeping themselves informed.

      • Alanfromnavan

        Working silently away is of no use. I think Irish people are more informed now about financial and political matters than ever before,but what use is all this information if we are not prepared to act upon it. It will be to late to act if we only act when all the bondholders are paid and then we start to realize the true meaning of this when we are paying water rates and all the other taxes this government will impose on us in the next few budgets.

      • Deco

        Number 3 – people reckon that it will not change anything. Basically, they will not expend energy in a cause that will amount to nought. Authority is still too strong, and the social mores are still in place to prevent any serious, consistent tough questioning of authority in public.

        Of course in private people are saying things that amount to them admitting that authority has failed, and is loaded with terrible flaws.

        It is just that in public, for some reason, the argument has not surfaced.

        Privately brave, and publicly shy perhaps ?

      • doflynn

        Over the past two months (and counting) in this parish, I’ve made at least 100 phonecalls/week, called to doors of friends, neighbours, strangers – one Saturday devoted entirely to the rounds, every house on this boreen pamphleted and spoken to, every house in the only estate in the parish likewise, in an effort to increase our weekly protest numbers. Met all kinds in those rounds, those who have a good grasp of what’s happening, those who have no idea, most in between; met all kinds of reactions also – too late, too soon (?), too little; helplessness, hopelessness, couldn’t-care-lessness (why should I march, I’ll still get my dole!), and sheer laziness; promises made (‘we’ll be there’), promise kept (one extra from that Saturday), promises broken.
        One universal reaction, however – anger, anger at so many different issues but anger most of all that the bondholders escape with their loot, scot-free, while we burn. And I tell ye now, if we don’t peaceably march/petition now to get that injustice, at least, rectified, then work on the others (too many to enumerate here), then there will come a trigger, something, a genuine last straw, and there will come chaos, violence, bloodshed. I don’t want even to think about it, but mark my words.
        I hope I’m not annoying yere heads with all this.

        • irishminx

          Hi doflynn, I have to say I have huge admiration for you. I passed through your protest one Sunday before I saw you on this site. I wasn’t sure until I was up close what the protest was about.

          I do think you are right with your post above, there will be a trigger and I too fear the violent response that is inevitable . I think it takes a lot for an Irish person to get to the point where they say, Enough Is Enough! As we Irish tend to take a lot of crap even with out this GFC! An example of this is the bullying that is epidemic in the Irish work place. And btw you are not annoying my head. I enjoy your posts and commitment.

    • doflynn

      Alanfromnavan, I refer you to my earlier post in this chain, way up above here; in Ballyhea we’ve been marching now for nine weeks, tenth march coming up this Sunday, and we’ve been trying to spread that dissent – contagion, what our good friends in the ECB fear in a different context. Having little or no success in getting our message out through the media, but we’re staying with it – our blogsite,, has the details.
      I’ve learned a lot on this site, some great thinkers here, great eloquence also, great clarity also in explaining some very complex subjects, but I’ve learned also that the Great Inertia is everywhere.

  41. Change

    Time is Change and there is nothing we can do about it except what we need to do.Until then make a living.

    • irishminx

      Hi John,

      How are you doing? You’ve been on my mind for a few days, hope alls well in your world?

      • Hi Trish ,
        I am home now and that crazy virus has me in bits and I have heard so many that have had it too including a few who have died .So today I have finally decided to take the conventional antibiotic tablets prescribed by my doctor and that should work.
        Until then I remain a wobble.

        Be ready from tuesday next the beginning of the PULL of the Full Moon starts until the following tuesday ….so Drive Slowley …..and Go Slow.

        • JUNE Tremors

          BEWARE JUNE 7th …………….Just BEWARE …and the days that follows

        • adamabyss

          Get well soon John. I had it myself and it knocked me flat on my back for a full week. Still recovering two weeks later!

        • irishminx

          Jeez John that virus sounds dreadful, I haven’t heard about it. Glad you have decided to take the antibiotics given it is still affecting you. Get well soon, I’ll keep you in my prayers.

          Hmmm, as for next Tuesday, I’m in Rome next week! My youngest daughter is taking me there for my 50th! And worse, I am flying back on Friday the 13th!! Oh Merde! ;)

  42. Trish

    GFC is the Global Financial Crisis. I was in the same boat last year in Australia where everyone I worked with talked to me about the “GFC” and I hadn’t a rashers what they meant for the first few days.


    • irishminx

      Thank you David, I appreciate you telling me.

      Have a wonderful day, slainte to you and yours. :)

    • adamabyss

      I had to ask about the very same acronym on here a couple of weeks back in a different thread. The use of these abbreviations is endemic these days and I think it’s a dubious trend. Eventually we’ll be eliminating words and language like in 1984, thereby restricting thought. Okay, I realise I’m being a tad dramatic! (or am I?)

      • irishminx

        No Adam you’re not being dramatic :)
        It would be nice if folk stated after the acronym what it really meant.

        BTW take Echinacea to build up your immune system.


  43. Morning,

    Just in response to a few posters who have said that my favoured policy is default, that’s not what I am saying. I am saying is that the result of this present policy will ultimately be some sort of default. If that is the case, we should bring the whole thing forward.


    • doflynn

      How do you default on a loan that was never originally yours? I have a mortgage on my house here which I can manage but my bank comes to me and says ‘Look, a friend of yous built a mansion down the road there during the boom years which he/she is now unable to pay back; you still have a job and an income, so you’re now going to have to pay that mortgage also, in full, at a higher interest rate, or we’ll foreclose on yours.’ Is that not essentially what happened? I’ve just read the ECB’s ‘ex-post’ policy and that, in very simple terms I admit, is more or less it. Having been forced, then, against our will (according to Brian the Lesser) by the ECB, into assuming the bank debt, how can we be said to be defaulting on it? Does this not bother anyone here enough to take a real stand?

      • irishminx

        Very good analogy doflynn and yes it does bother me.

        I’ve been thinking of a way we could all protest, at least those of us with mortgages. Couldn’t we all decide not to pay our mortgage say for July and see if we get a reaction for the Government. Then if we don’t get the response we like, decide in September and October not to pay our mortgage. We keep going that way, until the Government listen to us!

        It’s an idea and we would need a lot of people to participate in this.

        And I think when the money stops going into the banks, they’d have to listen.

        What do you think?

        • doflynn

          I think there are a thousand different ideas out there that might work, if they got the support; I know there is one idea out there, already up and running, that WOULD work if people got behind it, a single-purpose all-encompassing idea (we don’t all have mortgages, we are all bailing out the banks/bondholders).
          Get behind our march, get behind our accompanying petition.
          And now I’m off up the mountain for an hour’s gallop, in training for the June 160-mile run from Ballyhea to the Dáil to hand-deliver the petition to whoever bothers to meet me.

        • irishminx

          I’ve signed your petition and shared in on my face book page.

    • John Q. Public

      Noonan said the level of debt is ‘sustainable’ so where do you think this will lead? Is the guy deluded? We can’t count on him to negotiate for us with the ECB.


    This may have been mentioned previously, Brian Lenihan’s elder brother Niall works as a lawyer in the ECB.

  45. @doflynn,

    With respect and unless I’m mistaken I watch you occasionally trying to rouse your fellow posters into some sort of action?
    It sometimes comes across as though some posters are not as interested as you or maybe their actions do not live up to their words???
    Well it’s not like that at all and each has their own way. The very act of being a poster and debating as we do is extremely valuable!!!
    Fair play to you guys in Ballyhea and genuine thanks because what you do is also extremely valuable!
    And maybe the only difference between Ballyhea and Tahrir Square is the lack of live rounds into the crowd.
    I bet the Arab Spring began with a seemingly innocuous Pro Reform march in Tunisia that some idiot policeman decided to break up with his baton or gun?
    And that’s what will happen here in Ireland – Something relatively small will be blown up and inevitably fueled by our collective national anger.

    And I for one fear that day!

    To quote the boul’ W.B.

    All changed, changed utterly
    A terrible beauty is born.

    • coldblow

      Did you see that man on Newsnight a month or so ago? He was the only protestor to turn up for the planned Day of Rage in Saudi Arabia. He expressed forthright views about the regime to the BBC camera. The Newsnight reporter, who had taken his phone no., said he was followed by a police car as he left. When she rang him the next day there was no reply.

      • doflynn

        Would that I had that kind of courage and conviction, would that I had even a fraction of it. Would that we all had.

    • doflynn

      Paul, I think I’ve addressed that above – we should all share that fear. There is an undercurrent of violence, gathering pace; what happens when the targets for the next budget are announced? If this government doesn’t wake up, and soon, to the anger of its own people, heaven help us. So many things we’ve seen happen in the world in the last decade that we never thought would – even could – happen, but here we are. Godot how are ye.

  46. Praetorian

    Are Labour still in government?

  47. coldblow

    David, do the French and Germans have economists capable of expressing a view on what’s going on? Are they bought and paid for, or don’t understand, or is it just that we don’t hear about them? My guess is all three of the above.

    • Praetorian

      An economist is someone who will explain tomorrow what he predicted yesterday didn’t happen today.

  48. coldblow

    I have been busy moving house and whatever so haven’t followed much of the debate on irisheconomy and elsewhere. I take Hugh Sheehy’s point above about the dangers of inflation (from Colm’s link above to irisheconomy I note that he also finds Gary O’Callaghan’s recent article bizarre) and also Michael Hennigan’s point that blaming outsiders such as the ECB is a convenient way to avoid facing our own problems (he says he wouldn’t apportion more than 20 to 30% of the blame to Europe). But in the latter case I think that is really a separate issue from identifying who is to blame for the current mess, be they here or abroad, and as for the former, is there any other alternative to the present policy apart from David’s proposals? IM own HO the price of housing is based almost purely on the availability of credit and so factors like greed and stupidity are at best only secondary factors.

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