June 8, 2011

Too much regulation will stifle our banking sector

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Yesterday the IMF published its fifth review of Iceland’s economy since the crisis began. The IMF declared Iceland’s economic progress “impressive” and disbursed a loan tranche of $225m (€136m).

Now if this sounds weird to you, it should do. This is the Iceland that defaulted on all its bank bondholders and this is the Iceland that the IMF warned would be cut off unless it paid all its foreign bondholders. Yet just two years later, the IMF declares that Iceland’s progress has been “impressive” and lends the country money!

Does this sound strange to you? Did not our establishment laugh at the Icelanders and warn that Iceland was a “basket case”? We were told that we were going to be “protected” by the euro in the crisis. Nothing could be further from the truth. The fact is that the euro is now a straitjacket and, without room to manoeuvre, our economy will not recover. Meanwhile Iceland has its own currency, gave two fingers to the bondholders and is moving ahead “impressively”.

Back in that period when the Irish establishment was smearing Iceland as a basket case, I decided to visit the country to see what exactly a “basket case” looked and felt like. The first thing I noticed in March 2009 — six months after the crisis — was that the only people who appeared to be really worried in Reykjavik were English bankers in the foyer of the Hilton who were looking for their money back.

I put this to the acting finance minister of Iceland and he retorted: “We have no money, it is all gone.” Then he paused and looked up at me and quipped without irony: “But we can give them fish, if they like.”

He wasn’t intending to be funny. Here was a man who had reached the point where he knew where his negotiating position was. The money was gone, they weren’t going to borrow any more to pay old debts and it was up to the creditors to realise that, in the future, Iceland was going to depend on its own resources, and the bondholders — who owned close to €60bn worth of debt — would have to line up in an orderly queue and wait to see what they would get. This is normal business practice and this is what they applied.

When they realised how disastrous the banks’ balance sheets were, the Icelanders decided that the thing to do with bankrupt banks was to put them into administration. In contrast, in Ireland and in Greece, under the delinquent governance of the ECB, this normal procedure has not been allowed to take place in order to “save” the euro.

So Ireland and Greece have tied themselves up in knots and condemned their people to deep recessions in order to save the currency that was supposed to give them protection.

Rather than allow capitalism take its route we, due to some sort of bizarre Euro-corporatism, are being penalised to save a currency. If the currency is made stronger by penalising its weaker members, how can such a currency be in the best interests of the whole European family?

But this is where we find ourselves. So what should we do?

Regular readers of this column will know that I have believed and written for over six years now that Ireland would be much better off outside the euro, but given that the establishment will never countenance such a move towards economic sovereignty, we must accept that we are locked into this currency arrangement until it blows apart, undermined by its own contradictions.

We must first accept that the Irish banks are bust. They might not function as proper banks ever again and we should stop propping them up.

There is guff being spread again by the establishment that a default on the banks’ debts would destroy the banks. But this is nonsense and yet another example of voodoo economics.

The banks are in this moribund position not because of what they are doing now but because of what they did between 2004 and 2008. The problem is still the mad lending which went on in the boom. A default on the bondholders is the consequence of the banks being already bust — not the thing which will cause the banks to go bust.

Not for the first time, the Irish mainstream has got its analysis back to front, spinning like mad in order to protect its own interests. In this sham, they are aided and abetted by the European elite.

But if we defaulted on the bondholders as Iceland did and let them fail, what might replace them?

Obviously new banks would replace the old banks. The new banks would have new capital, which would be safe and unencumbered by the mistakes of the past. If a new bank set up tomorrow, who wouldn’t put their deposits in it?

But — and now here’s the snag — a new bank must have a licence to set up. But how does it go about it? It applies to the Central Bank. However, the Central Bank is, at the moment, caught in the after-effects of its own failings. Having failed to regulate the banks in the boom, it is now in danger of over-regulating in the aftermath.

What I mean here is that it is over-compensating now for its previous failures by making capital requirements too high. This over-regulation is a mistake, the mirror image of its under-regulation mistake in the boom.

Over-regulation means that there are barriers to entry for new players, which are sufficient to deter them from coming in. But the over-regulation is unnecessary. It is a classic example of the generals fighting the last war. What we need now is to be open to business for new incumbents rather than saddling them with regulation, which is more about the Central Bank being prudent after the event.

This leaves us in the worst of all worlds: we had too little regulation when there were too many banks operating in Ireland and now we have too much regulation when there are too few!

Thus the credit crunch, to use a Bertieism, gets crunchier, amplifying the inappropriateness of the euro as our currency, weakening the economy and in so doing, from a political point of view, weakening the very European integration commitment our membership of the euro was supposed to enhance!

David McWilliams hosts the Dalkey Book Festival June 17 to 19. www.dalkeybookfestival.org


  1. Praetorian

    Ever think the ‘over-regulation’ (not sure it is regulation, sounds more like red tape to bar entry) was deliberate policy.? We now have a duopoly, two major banks are protected with the Irish citizens as their captive and only market once they have completed their asset stripping, they get to rebuild without any domestic competition, and we go back to pre-boom scenario minus Anglo and a few other ‘institutions’.

    Business run society with a failed Republic tailing far behind.

    • Deco

      The point of the whole thing now will be to protect these two “Pillar Banks”. I don’t know what PR or advertising agency came up with the phrase Pillar banks. It sounds to me like another ingenious attempt to define a joke in terms of words that are supposed to demand respect. And it is happens continually in this country, from authority.

      Two “pillar” banks is about as much of an admission as you are going to get from the authorities that they really are scrapping the bottom of the barrell at the moment in an effort to pretend that there is a fix coming to this.

      Forget state-run PR/spin – if you really want to know what is going on in corporate Ireland, just read Phoenix Magazine. The last version covered a story about Permo and how it was always a joke that managed a very slick PR campaign. Though David poked through this long before anybody else. And this week, we have an analysis of that most august of institutions, BoI – the headline from Phoenix reads “BoI needs €20 Bn not € 5.6 Bn”. I would add the phrase, “for now”. Because you just never know with these clowns.

      Underneath the headline is a picture of Richie. Richie played rugger once, and therefore he is a “safe pair of hands”. He was also head of the Ireland division when BoI operated a very liberal lending regime which is now causing massive problems.

      And down the road in the other Pillar in Ballsbridge, all we get is this eery silence – we are getting no information at all. Quieter than a BoI chief economist, if asked to comment about a sale of distressed properties.

      So let’s be honest here. The government’s plans for Ireland are based on two “plonker” banks. A commercial activity that is marginal to all the machismo and backslapping that goes on in the clubhouse. The same clowns are more or less in charge. The cultures have not been punished for their misdeeds, therefore they are not reformed.

      • Deco

        The biggest case that exists against social partnership running matters in Ireland is the role of IBEC.

        IBEC is heavily influenced by the two plonker banks, and companies that share directors with the two plonker banks. The only other large influence inside IBEC is semi-state organizations. (Semi-states paying the taxpayers money into IBEC is another matter entirely). Basically IBEC is a lobbying organization that is connected to a lot of the cronyism and nepotism that goes on in this country.

        As you can see the people running the organizations by IBEC are a collection of clueless morons who cannot get it right, even when the CAI is ignoring all the market rigging and oligopolistic pricing that is pushing up the cost of living in this country, and fattening their margins.

        The last thing that these clowns should be allowed to do, (speaking purely from the perspective of competence) is to have any influence in the running of the country.

        Basically, before they do anything, you can be certain it will end in disaster. It is purely down to the intellectual level at which these clowns operate.

      • Two Pillar Banks = Two IOU’s = Two Irish Economy IED’s

  2. NO HOPE

    As our American cousins say. Go figure! Classic over-reaction by those in charge who do not have a clue. Watch our bank charges go through the roof once the competition has been eliminated. Back to Sqr 1. Iceland has been an example of democracy. Unfortunately the semi-democracy that exists in Ireland is only thinly veiled democracy. Politicians promise everything and deliver little if nothing, under the guise of a “Mandate” resulting in the blanket banking guarantee. Matter of such grievous long lasting implications should automatically go to referendum. Our entire country needs to be re-worked from the bottom up. The entire system is useless and has failed citizens. What we really need is a new effective political party with business minds, who know how things work. What we have is self evident. According to the Wikileaks cable, Eamonn Gilmore telling the Americans that he says one thing in public because it is politically expedient, but actually secretly opposes what he says privately, should be grounds for immediate dismissal. We`ll have a long wait……….

    • Deco

      Yes. Time for Gilmore to go !!!

    • Deco

      You are right “Iceland has been an example of democracy”.

      As we learned after Lisbon 1, examples of democracy get put in their place.

      My advice to the Iranians and the Libyans is this “whatever you do, do not try real democracy – then you will become a real pariah state”….

  3. Alan42

    Oh sweet Jesus . You most definitly need regulation in your future banking . There is no quick fix and anything else is just the talk of a snake oil salesman.

    Having said that . Ireland is a small nation on the fringes of Europe . Your banks are completly screwed and your economy is dead and Europe will be more than happy to treat you as a slight cold rather than the more serious cancer that is Greese , Spain and Portugal . And God only knows what is brewing in Italy .

    It may be racist . But in hot countries nobody works . It is ingrained very deeply in their culture . How you marry a culture that would rather have a coffee and a nap with the Germans exporting their asses off is anybodies guess .

    You really need to defult now before the Greeks do nd kick the problem into the ECB . Ireland is tiny yet you seem to think that you are important .

    If a business fails . It goes bust and calls in the reciever . It is limited in its liabilities . Meaning that you don’t pay every last cent . These are not old Grannies that extended your company credit . They are professionals who took a risk .

    Wake up , smell the coffee , etc .

    • Dorothy Jones

      @ Alan42
      ‘Oh Sweet Jesus’
      +1…..

    • Harold Plinth

      It’s wonderful when our US cousins take the time to reply.

      “You most definitely need …. ” Our cousins know what others need

      “There is no quick fix and anything else is just the talk of a snake oil salesman.” They know how the real world is, as big men do.

      “Your banks are completly screwed and your economy is dead” at last, they speak from experience.

      “And God only knows what is brewing in Italy.” Which is a place they have heard of, but where could it be on the map?

      “It may be racist.” Well, it is racist, but they can write what they like and get away with it.

      “It is ingrained very deeply in their culture.” They in the USA know a lot about ‘their’ culture.

      “The Germans exporting their asses off is anybodies guess.” A little proto-masculine rough language ads colour.

      “You really need to defult now” but their verbs seem to be failing them.

      “Ireland is tiny yet you seem to think that you are important.” They are, you are not.

      “These are not old Grannies that extended your company credit. They are professionals who took a risk.” Your country and society are a company?

      “Wake up , smell the coffee , etc .” Thanks Yank.

  4. lagedargent

    Hi David,
    Now you’re making complete sense to me.
    Pity, the Irish are not acting on it, ban voting with their feet.
    Ain’t there a nice square in Dublin’s centre to put up a tent or two?

  5. Deco

    Regulation Irish style.
    Classic example – the Competition Authority of Ireland (CAI).

    The competition authority are busy taking on cases against small operators trying to cut hedges. (And losing due to their own ineptitude).

    But the CAI never mess with the big boys.

    The CAI never ask about what NAMA is doing holding back properties in the real estate market.

    The CAI have no problem with the fact that one French Multinational seems to own the brands that equate to the vast majority of the sales of Irish Whisky. (Can you imagine the Scots or the Canadians putting up with this nonsense ?).

    The CAI never asked why Irish banks hold shares of other companies in the ISEQ, and plonk their chums into directorships – as is illustrated perfectly well by the TASC diagram on cronyism in Ireland.

    The CAI never investigated the ownership of building land on the outskirts of our cities, despite the wholescale profiteering that was going on.

    But, by God – if you are in the hedgecutting business and they get even the slightest suspicion about you, then they really get on your case.

    Really, the CAI are a “false friend”. They are not doing what they should be doing, and are busy doing what they should not be doing – so as to look like as if they are busy doing what we are paying them to be doing.

    Get rid of the CAI – because to be honest they are a waste of space, and it is the same having them there as having nothing there. And before they go, give them the Patrick Neary Award for service to the public in recognition of their complete incompetence.

    • Deco

      My point I suppose is this. Never mind what the charter of the regulator says. That is for “public posture” to quote a current catchphrase. Monitor what they are doing. It is abundantly clear that all of these quangoes apply deference to powerful interests, and many of them are dismissive of the ordinary citizenry.

      I am sceptical of the regulation level being applied. It is a hamfisted attempt to prevent any competitive wipe out of the banks that are on life support – and indeed an attempt to hold together the entire insider mentality. This is why people have left this country to make a life for themselves in North America, to an extent that did not occur in for example The Netherlands. The wagons have been circled. And somebody needs to be scelped and suckered into paying for it all – and the cause is provided – it is called “wearing the green jersey” “pride”. A variation on the same hard sell catch phrases that got us into this mess.

      In the circumstances, being truly honest, the most patriotic thing any individual can do is apply complete scepticism to anything that has power in the Irish state system and in much of the private business world also.

    • Emperorsgotnoclothes

      Fair point Deco. Typical establishment antics – bully the little person by by god they won’t take on the big boys and perform the service they’re supposed to be there for!

      A friend of mine had a great take on incompetent people. His theory was that you’d be better off with empty space because (a) it couldn’t do any damage, and (b) you didn’t need to monitor its activities.
      A theory which could so easily be applied so many of these useless/dangerous authorities.

      • Deco

        I think we would be better off without a Competition Authority, because then we could be honest about all the rigged prices in this country.

        Likewise, concerning the Financial regulator – if we had none, then nobody would assume that things were done properly, and people would be able to plan accordingly.

        A useless regulator is the worst thing you can have, because of the deceit it causes.

  6. adamabyss

    The Doom that Came to Sarnath

  7. Over the Bank Holiday weekend I managed to sit down and watch 2001 A Space Odyssey. In fact it’s probably the first time in my adult life I’ve chosen to sit down and watch it. Great movie, great imagery and a great score — better than I had remembered it as a youth. It was made and released a year before man actually stepped foot on the moon and I suppose it was Haley’s or Kubrick’s interpretation of the world that they envisaged for 2001. – Well at least we got the tin-foil!

    The thought which occured to me, both during and after the movie, was how much more optimistic the world seemed to be then. In the 60′s and 70′s. By the mid 1980′s we thought somehow naively that we’d cracked famine with the help of our popstars (Remember Live Aid?)
    Of course we bought into the dream — that our children would enjoy a better standard of living than ourselves and opportunities would become wider reaching and more accessible.
    And for a number of decades it actually seemed to work — it may have been a mirage — but it seemed to be the popular consensus. Even up to a few years ago when we had reached full employment and we were all “River Dancing!”

    And now — Imithe! Gan dóchais ar bith?

    So now we have become the parents of children who seem also compelled to leave our shores. However I suspect that in our “new world” they will still not discover the same quality of opportunity as we did when we left in the 80′s. The world has changed — and it seems it’s less generous.

    The future we are painting is bleak — for ourselves or for our children.
    We have been led to the chambers and we freely inhaling compliance and docile acceptance!
    We are complicit when we should revolt and resist!
    Doflynn is right to be angry and so too should we!
    We need intelligent targetted anger!
    I do not want to pass on docile compliant acceptance to my children! I want their horizons to be expanded – not insanely contracted!

    The politicians of all hues have failed us — Those that brought us here and those that never truly offered resistence. Enda’s a lovely fella and all that but I don’t remember him waving red flags or chaining himself to any railings in any protests for the people’s sake? He like the rest either chose not to notice or completely failed to notice. In his own intellectual words;
    “Paddy likes to know the story!” Well unfortunately this Paddy knows the story and knows where it’s heading.
    The fact is Ladies and Gentlemen — Your Party of whatever colour has Failed! – Miserably!
    So it’s time for another way.
    DOFlynns action is likely to be forgotten unless we recognise it as Building Block No.1
    I think we should now be thinking about Building Block No.2 ?
    And No.3 and No.4. There is so much intelligent input to this site from very bright intellects — Is there a possiblity that between us we could cook up a national event or a coordinated action or media campaign? How’s October? In honour of another revolutuion?
    You see we’re just about the only hope around! There are no champions demanding action or leading from the front and there’s none arriving any time soon. We’re it — freethinking citizens, and if we don’t do it then it’s probably going to be some extremist group borne out of a riot.
    And if that happens….well all our good intentions or deeds will have become pointless.
    Besides, I know that with the right structure and the right management Ireland can be a place of opportunity for all its citizens and it’s guests!

    • adamabyss

      Incredible movie – one of my favourites. I too rewatched it three times in a week in 2009 and it was still as powerful. In fact it was better – I watched in on someones flashy widescreen TV in the States and the colours, scenes etc. were even more striking.

    • adamabyss

      Regarding the second part of your post, just bide your time Paul – opportunities for positive action will come. I will be interested in getting involved when the time is right. Adam.

    • patrick74

      Elegantly put Paul. I watched a documentary a couple of weeks back too- on a guy who was forced by the Nazis to burn the bodies of thousands of Jews who had been gassed.
      He described the regular visits by the German engineers who maintained the ovens. There was a photo of an engineer checking out the oven, much like somebody might do servicing a washing machine today- Who knows that could be the job he returned to when they were finally halted. He most likely melted back into the general German population to become a productive citizen once again.

      I agree- we have been led to the chambers.

    • Harper66

      Paul ,
      Good post. I am in full agreement with you. We are in serious trouble and the correct measures are not being taken to remedy the situation.
      I firmly believe just one large event would be enough to focus the minds of the people. It is too easy to dismiss the inactivity of the population by calling us “sheeple”. There is a great deal of anger in the general population – the Irish people aren’t “sheeple” we are afraid, we are clinging to each crazy quick fix senario being offered and we are becoming more and more desperate.
      The country has ground to a halt. The system has failed and it is being kept alive zombie like.
      We have been abandoned by our leaders, political, social….and we are in the eye of the storm. I believe the budget will blow the government apart. I do not think it will pass. I have no inside knowledge but it is clear to me the government is tearing itself apart.
      Our government is still not acting in the interest of the people. We have no political alternatives regardless of ideologies regarding social issues the three main “pillar” parties FG, FF and Labour are all on the same page economically. It is here that the damage is being done.
      I have no doubt the time for action is now.
      The solution must come from the people. A protest meeting under three/ four simple clear demands invite speakers to address the people.

      • Thanks guys,
        I’m sorry to harp on but maybe there’s something non-violent that we can do or organise…..just bear with me on this.

        An urban legend which became prolific during W.W.II was how King Christian of Denmark reacted to the Nazi order that all Danish Jews wear the yellow Star of David. It is said that he declared all Danes were equal and wore the star himself along with thousands of non Jewish Danes in solidarity with their Jewish brothers.

        An inspired reaction which belittled the logic and intelligence of the policy instigators!

        So what if we were to produce a symbolic armband which angry Irish people both here and abroad chose to wear? Our equivalent to the yellow star. A symbol which said to the ECB that we are your unclean race awaiting your final solution?
        A symbol which could be equally adopted by disatisfied Europeans everywhere. Or worn by David and his ilk in TV interviews or on his travels?
        A statement which says “The Emperor is Naked!” It may be possible see this symbol on Ryanair Jets landing all over Europe?
        Anything is possible and symbols are extremely potent!
        That’s my first go at a constructive suggestion – but I’m not going to stop until we have something going! I would love to hear your reaction? Good or Bad?
        Thanks!

        • The disaffected one

          I’m a recent London emigrant, and I’m looking for my chance to contribute to change. It’s not likely to be by emigrant vote, which I brought up with David at his stand up shows. But I’ll fu***ng wear a sleeve symbol, if I see the likes of David or Gurgdiev doing likewise. I’d hope to spot another on the tube. It’s a great idea, because there is f*ck all else we can do at this stage. I envy the Icelanders, I’m currently ashamed to meet one.

          • I am very sorry that you had to emigrate! I do not know who you are but I’d put my life on it that you are not the son/daughter of a professional Irish politician!!!

            I’m glad you see merit in the idea. Design’s not my forte but if you look up the following you might be inspired. I was thinking of the grey concentration camp stripes as a background to an armband.

            http://en.wikipedia.org/wiki/Nazi_concentration_camp_badges#Table_of_camp_inmate_markings

            As well as Jews the nazi’s labelled Jehovahs Witnesses, Homosexuals, Roma Gypsies, Emigrants and others.
            What would be the appropriate symbol for people who refused or couldn’t pay bankers debts?

            N.B. I do not wish to belittle those that suffered during the holocaust by such symbolism but I do believe if left unchecked the ECB strategy will lead us to nightmare images of subjugation.

            We need to affect the EU psyche! We also need to bring you guys home to where you belong so you can contribute to a better land for us all!

            Regards
            Paul

        • patrick74

          “An inspired reaction which belittled the logic..”

          What causes a reaction?

          A King Christian of Denmark
          Phan Thị Kim Phúc, The Napalm Girl
          Hu Yaobang’s death in ’89
          The self-immolation of Mohamed Bouazizi in Tunisia

          I’d like to think there’s a movement possible, but I believe it’s first going to take a Human Catalyst – a tipping point.

        • vincent

          Sovereign Seal-A sacred symbol of our Sovereignty

        • bpositive

          Nice idea Paul.
          Taking your theme of the Danaish King using the Nazi’s own badges to show solidarity- Could we not use what we have been given as our mark of servitude- the Euro coin?

          We all carry them every day. They’re widely and freely distributed across core and peripheral EU nations. In fact they reach the hands of everyone, including the ruling elite.
          If people who want to show their anger/solidarity and give a message to the instigators, they could start by applying a mark that still allows the coin to be used as legal tender.

          Not sure what that mark might be- A red X, a ‘no’ ‘non’ ‘nien’- something simple that can be applied with paint or an everyday object like a key or a knife.

          anyway nice idea- keep it going!

          • bpositive

            There’s a story, I don’t know if it’s true. When the Spanish government tried to introduce clamping in Spain. Everyone started carrying superglue. If you saw a clamp- you filled the lock with superglue- whether it was your car or not. The cost of replacing the locks soon outweighed the revenues from clamping and the program was stopped.

            What if people started subtly altering the Euro coin- like small nick to the edge, so that disrupted how they could be sorted, counted and stacked- something simple that could be done in your home, office or the pub. A symbol of the disaffected

          • Emperorsgotnoclothes

            @ bpositive
            Your idea regarding marking the coins is simple but really clever. I’m not sure how effective it would be in terms of forcing the powers-that-be to alter the actions, but it would certainly send a message out to them. Given that we have been effectively shut out of the democratic process and silenced, this would be one way to voice our opposition to what’s happening. A red X in permanent marker on every €1 coin might do it!

          • bpositive

            @Paul, @Irishminx, @emperorsgotnoclothes, @cbweb @The Disaffected One
            Paul- based on your idea-This is what I was thinking re an Emblem-
            It’s poorly executed, but I hope it explains my idea of using the euro coin as a symbol of solidarity and defiance. http://www.youtube.com/watch?v=7vHUiqpwmjE

            Your thoughts?

          • You need to show enough discipline to show you are able to obey the law, otherwise you risk damage to cause you espouse, so damaging what may be regarded as public property? Might antagonise people you wish to persuade. I’m away in France next Sat for a week, so can’t make Ballyhea. On a lighter note, I’m one of the chosen elite who managed to successfully appeal a clamping:)Lol

            Good movie:

            http://articles.mercola.com/sites/articles/archive/2011/06/11/burzynski-the-movie.aspx

          • bpositive

            Don’t see how it is outside of any laws – No different from stamping a note. Either way I just posed the question. Don’t know where Ballyhea is, but it looks exciting- bon voyage, well done on the appeal.

          • @bpositive,

            I can see, just like the glue in the clamp locks where you are going with this.
            There’s two reasons however why I would not choose this;

            1.It doesn’t identify who we the disaffected are or give us the chance to personnally display our valid and noble objection.

            2. It gives the establishment the opportunity to dismiss us as destructive.

            Having reflected on it some more I again come back to the idea of a simple armband made of the grey and white striped concentration camp uniform material.

            Symbolising that the unreasonable demand for repayment of odious debt, (Thank you Georg)and the resulting imposed austerity and national asset stripping, is tactically close to what used be called National Socialism.
            That should prick a few Sarkozy’s and appeal to a politically correct European psyche?

            Can you imagine if a bearer of the armband said that on TV?

            BTW – Great video at such short notice! You have a very useful talent there! Particularly if there was ever to be a wear the armband appeal??
            Thanks for staying interested
            - Now I ask you – What do you think?

          • Oh and PS,
            As a message to our own politicians it works too.
            It displays and conveys our anger.
            GREY -
            The unacceptability of operating in the grey zone -You know how rules for us are black and white but theirs are always a grey area (Think Callelly and his entitlement to get the taxpayer to fund his voluntary move of residence -disgusting!) Our paycuts which need special laws passed – Bullshit!
            WHITE – The flag of surrender! They surrendered our sovereignty to the troika without respectfully consulting us. If the Icelandic people can be respected by their politicians then we demand the same of ours.
            We demand a new constitution which outlaws cronyism and nepotism.

            With this armband I express my revulsion at the sham way that this country was and is governed!
            With this armband I say it’s broken and the people who broke it are disqualified from being the ones who try to fix it!
            The white can also represent the clean slate that we urgently need!

          • bpositive

            I like the idea of a symbol Paul-I just wonder how an armband would be manufactured and distributed -Costs, logistics etc. and then have to rely on Personalities in the press to wear and explain the band. For normal people it doesn’t really give them any more power than they have now.
            I guess what I was trying to find is for anyone, a way to display their objection.

            Possibly the coin is the wrong vehicle (thanks Gardai everywhere) but it needs to be a symbol maybe in not a literal sense, but a reaction that can be carried out by a 16 year old or a pensioner easily and effectively.
            I watched Miriam O’Callaghan look at David like he was some kind of quirky professor, during Prime Time a few months back when David was trying to ignite public interest in a referendum. What would she make of his Armband?

            Possibly marking a coin isn’t the way. You are right in that it’s not noble. Maybe it will lead to a better idea..If you have an armband for me to wear- I will wear it!

          • irishminx

            Love the video bpositive & the idea.
            Paul, I think bpositive has a point there when he talks about getting the arm bands made etc.
            Why not go with Max Keiser’s stamp idea, we could all get a stamp made, but we’d need to agree the wording.

            BTW, are you lot meeting up in Ballyhea? If so, when?
            I’ll join you.
            Plus I can twit it for more support.
            Will you let me know please.

            Many thanks,
            Trich

        • Emperorsgotnoclothes

          @ Paul
          Great thinking Paul. I agree that the idea of a symbolic gesture aimed at the elites is potentially very powerful. While we’ve been consistently denied a referendum to voice our objections to the current policies, this would be a way for people to express their unwillingness to support these disastrous and immoral policies, which are being carried out without a mandate from the people. I think that this is a wonderful forum for sharing views with like-minded people and also for educating oneself. However, for there to be some net positive effect from all of the effort people put into their postings we do need for there to be some form of resultant action. Your suggestion is definitely a move in that direction!

          • irishminx

            Paul,

            When Max Keiser was here in April, I went to see him in Dublin. During the show, he gave us a stamp, (for the life of me I can’t remember exactly what it said)which had something about JP Morgan & silver. I stamped all my notes. When I was in Italy in May I spent the last note that had this stamp on it! Our logo could say “Burn Bondholders”, however, I am sure other’s here could come up with more creative logo’s.

            It would be easier to stamp notes than to mark coins imo.

            As for doing something more tangible, couldn’t we all meet up in Ballyhea for their Sunday morning protest?

            I’m sure there are some posters here who have media contacts and they could spread the word. Plus we could all plug it on Face Book & Twitter etc.

          • adamabyss

            I’d be on for going to Ballyhea on a Saturday afternoon if anyone is driving down from Dublin and can fit me in their car. I will contribute to petrol of course. Would need to find a reasonable B&B down there too for the night but I’m sure that Mr. O’Flynn could advise on that. If enough people turned up we could give the local economy a good boost!

    • irishminx

      Paul, I enjoyed your post but am not sure I ever saw the film!

      As to a symbol, I feel it needs to be a positive one.

      My suggestion is that of a Dove. It already symbolises PEACE world wide and shows spirit too.
      God knows I feel Ireland needs spirit right now.

      Maybe have one wing on it black to symbolise debt, the other wing white to show we are not broken as people!

      I whole heartily agree positive action is urgently needed.

      Anyway, that’s my suggestion.

      I hope you and yours are well?

      Sláinte,

      Trich

  8. adamabyss

    David,

    Is Kilkenomics on again this October? And when (if ever) is the promised footage from last year’s event going up online?

    Thanks,

    Adam.

  9. wills

    David.

    The reason why Irelands insiders classes cling to the Euro seems to me to be simply a strategic play.

    Also, it offers time and space for the insider class to formulate the next position they will move on.

    So, if Ireland defaults and drops out of the Euro will the insiders been in control of this event.

    We need to really examine this and preempt.

    I do not want the insider swag bag merchants circled around the *punt* printing presses.

  10. wills

    *be in control*.

  11. The disaffected one

    sub

  12. Malcolm McClure

    David says “Obviously new banks would replace the old banks. The new banks would have new capital, which would be safe and unencumbered by the mistakes of the past. If a new bank set up tomorrow, who wouldn’t put their deposits in it?”

    Before 1966, a Northern Irish town of 10,000 people, with an agricultural hinterland of maybe another 5,000, supported the Bank of Ireland, the Ulster Bank, the Provincial Bank, the Munster & Leinster Bank, the The Belfast Bank, the Northern Bank, the Trustee Savings Bank and a Post Office Savings Bank. Eight banks.
    Today, with maybe three times the population, it has Ulster Bank, HSBC, Northern Bank, Bank of Ireland, Halifax and Santander. –Six banks resulted from amalgamation and foreign investment.
    A similar sized town in the south has five banks, BoI, AIB, NIB, Ulster and Permanent TSB with some foreign banks hovering in the wings.

    In the USA the Great Depression brought increased regulation of the banking industry, including expansion of the Federal Reserve Board’s powers and the establishment of the Federal Deposit Insurance Corporation (FDIC). The economic crisis also spawned a plethora of federal and state legislation restricting interstate retail banking. Strong popular and governmental reaction to the Great Depression helped make banking one of the most regulated segments of U.S. industry.

    More recently in USA, the relaxation of the Glass-Steagall restrictions on bank holding companies permitted banks to merge across product lines. Bank holding companies increasingly purchased mutual fund companies, brokerage houses, and insurance firms in order to offer a full range of financial products to their customers.

    We need regulations that place limits on the geographical and product scope of the new financial product companies that replace existing shambolic banks, with strict limits on their capital ratios and acceptable assets to prevent the recurrence of ponzi schemes.

    • Re “More recently in USA, the relaxation of the Glass-Steagall restrictions on bank holding companies permitted banks to merge across product lines.”

      This was a terrible mistake that led to the amalgamation of retail banks with investment banking.

      We need a return to Glass-Steagall and complete overhaul of the financial products industry that threatens an even worse catastrophe than 2008 .

  13. When the headline of the article appeared in the inbox I thought: ‘David has finally lost it’ and is now on the side of the bankers but he is right – we can’t have a banking system that consists of a monopoly shared between the two plonker banks. That would be a very cosy cartel and we would be back to square one except that this time they are bankrupt

    The only conclusion to be applied to the dithering
    of the political classes over the last three years is that they are more concerned about preserving the interests of the Irish establishment and outside forces over those of the Irish people and that they always will do. Their function is to play a tug of war game between powerful interests and the masses

    This Fine Gael / Labour government was voted in because Irish people were shamed into realising that they had gotten it so badly wrong in the past by continuously voting in the Gombeen Fianna Fail party. One hundred days after the The Charge of the Enda’s the new Government is cracking up and soon the political in fighting will dominate the headlines

    It will suit the bankers and the Troika perfectly well to sit back pissing themselves laughing at a clueless nation fighting over scraps after huge tranches of tax payers money has been transferred into the accounts of a banking establishment that simply hates society. They hate society because their behaviour tells us so and there is no better barometer for a persons character than in how they behave

    The proof lies in the evidence and the evidence is telling me that these people DO NOT GIVE A TOSS about you, me or the old lady living next door who can’t afford to heat the house. In Ireland poverty is rife now – poverty of mind, heart and soul is crushing the will of a people who have become paralysed by terror

    And what do we call people who make others bow to their will through the use of terror?

    Yet we are told by the Positivists to be strong, wear the green jersey and turn to face the setting sun while smiling positively. Bullshit

    People everywhere are simply fucking miserable and shit scared of future austerity measures and the simple fact is that there is no more quarter to be given at the expense of the poor and the working poor

    They create ‘documentaries’ about dole cheats to divide and conquer public opinion and lay the ground for implementing austerity measures. They are gutless and in their desperation they will go after anyone but the people who raped this country financially and are still living in luxury on multiple pensions. They could strip Ahearn and the other wasters of their pensions first

    Incomes are falling due to austerity measures and the prices in the supermarkets are rising. Energy is rising and next winter more people will go without fuel that last year. Anyone who is on the dole will tell you that the longer this goes on the more you feel that the life has become akin to drowning or death by a thousand cuts

    We don’t have the luxury of sitting on our arses doing nothing and complaining about it on the net because no-one is hearing us. That is why Paul Moriarty on this forum is right to ask what we are prepared to do about it. Open up the debate and see if there is a willingness for people to do something positive

    There is no point in the Irish looking down their noses sneering at people in places like Greece, Spain, Syria and Tunisia as if these people are somehow inferior to the Irish

    The guy in Tunisia whose life is poverty stricken has more in common with an ordinary Irish man than does an Irish politician. The Endas are not our friends and in the coming months you will them see them rip themselves apart because they don’t dare exercise the courage of their election convictions

    If there is to be a peoples movement in Ireland then now is a good time to start it.

    • Malcolm McClure

      Pauldiv says: “If there is to be a peoples movement in Ireland then now is a good time to start it.”

      I seem to be aware of a new phenomenon on Irish roads. No matter where I go these days I come across men in full racing gear, riding bikes; sometimes singly, often in groups with motor backup. As this passion expands, the bike is becoming a political weapon. It expresses self-reliance, get-up and go action, two-fingers to exorbitant fuel prices, eco-friendliness and comradeship. it is an everyday activity, not just a weekend field sport needing organization. If it were organized to become a political activity, by its nature it would exclude the fat cat boors who became lazy during the boom. Toot support when you see them.

  14. uchrisn

    The Icelandic people have solidarity. They are generally working together in the best interest of their country. Fair play to them. You know what, even if their economy was not recovering well they would still have the satisfaction of morally doing the right thing.

    Irish people are not working together as a country. The disabled unemployed etc are being asked to suffer for the benefit of the rich. Solidarity is supposed to work the other way. Not only are they morally doing the wrong thing, their economy is also suffering.
    In case anyone is confused about the morality of Ireland position let me make it clear –
    We are deducting money from the most vunerable – disabled people, sick people and the young and giving it mainly to the rich – banks in Germany, UK, France and US. That is selfish and cowardly.

  15. uchrisn

    Many people in Ireland accept the immorallity or in a lighter way unfairness of this situation.
    Their argument alsways tends to be, we knows its unfair, if we don’t do it we will be punished financially.
    You can explain to people the complicated system of international finance and economics as to why we would not actually be punished financially and would be better off.
    If you don’t have the time this can be reputed with one word – ‘Iceland’

  16. uchrisn

    Icelandicboy, Kaskakistanboy and Irish boy were in the school yard together. USboy comes up and says,
    ‘if you don’t steal the lunch money from your younger brother and give it to me I’ll hit you.’
    So Icelandicboy says no I’m not doing that, its wrong. USboy says ‘i’m going to hit you’, Icelandicboy says no 3 times. USboy says ok I wasn’t really going to hit you we’re friends after all and turns to Kaskakistan boy.
    Kaskakistan boy says ‘Of course I’m not stealing from my brother, we just saw what happened with Icelandicboy.
    USboy then asks Irish boy to do the same. Irish boy says ‘please don’t hit me’ goes over and hits his brother takes his lunchmoney and gives it to US boy.

  17. Are you worried?

    I don’t know about you, but if you followed the Target 2 position discussion that evolved in the realm of the biggest brains in economy circles these days, and that triggered a wave of contributions from Karl Whelan, WSJ, Handelblatt etc. concerning this statement:

    http://dl.dropbox.com/u/4914840/target2positions.tiff

    made by Prof. H.W. Sinn in his explanations on the crisis, I do feel worried. If the biggest brains in economy have major differences on the fundamentals of the monetary system, it does tell me something about the monetary system, does it not?

    Best
    Georg

    • Prof. H.W. Sinn link for?

      • Wouldn’t worry about lines drawn between followers of the neo liberal Greenspan position and others Stiglitz, Hudson et al, they’ve been around for a long while and have grown since 2008

        • No no…. this is fundamental stuff on monetary policy Colm!

          Do you speak german? The link is a 1.5 hours presentation of Sinn at IFO Institute, scroll to May 9th.

          http://mediathek.cesifo-group.de/player/macros/_v_f_750_de_512_288/_s_ifo/_x_s-764870657/ifo/index.html

          • Unfortunately, I don’t speak German. I scanned your link though and about 1:20 Sinn is making great jokes about ‘ze Anglo Irish’ illustrated with slide pics showing the recovery from harbour by a huge crane of a car and a huge truck that both went over the side, our pillar banks? Accompanied by lots of laughs.

            Maybe you could translate the joke and short summarise Sinn’s main points:)

          • Well, the bloke standing on his car under water represents Anglo Irish, next you see is a bigger crane depicting CBoI trying to lift Anglo, and well, down it goes , next bigger crane appearing is ECB now trying to lift both, CBoI and Anglo, and well, going down as well, the last crane appearing has the german flag, indicating germany the biggest contributor to capital outflow in EU, he leave the imagination to the audience to conclude what would happen if this crane tries to lift all three, Anglo CBoI and ECB….

          • More interesting though is his slide of target2 position that I posted above, and apparently his conclusion is based on this paper here:

            http://www.lancs.ac.uk/staff/whittaj1/eurosystem.pdf

        • Excellent links, thanks, particularly eurosystem.pdf there are CBI promissory note shenanigans becoming collateral debated elsewhere we won’t go into here, but the document exposes the huge risks Sinn is I’m sure alerting his audience to by way of the Bundesbank as borrower of last resort in the linked borrowing chain between Irish banks, CBI, ECB and Bundesbank.

          As you know I’m an advocate of the Morgan Kelly default option variant that would say the Irish banks
          are effectively supported, owned and run by the Bundesbank, they’ve invested in our banks, so they’re liable for the losses as well as any profits they make from the loans extended to us. We should just walk away from these banks.

          The particular model of banking support described in the eurosystem document is fundamentally flawed in my opinion. This is the reason Greece and Ireland and the PIIGS are in the mess they are in. A huge overhaul of the Stability Pact is required, but its too late for this as the damage has now been done. It’s now time to pay the piper:)

          So this leaves a Hobson’s choice; 1. one choice is for Bundesbank to bear the losses and support our default; 2. the second choice is for ECB to pour good money after bad in the Irish case, more support to Ireland will pour more lender money after bad, that won’t be repaid because of inevitable default….

          I support option one above, default asap.

          • You know, if anything, this target 2 discussion that is exploding in WSJ, FT, etc. and that was triggered by Karl – Thumbs up! – shows that the massive structural problems within the banking sector are a far cry from being solved, instead we got Basel III, while the underlying structural problems were neglected.

            This is what the public more than likely does not understand. They are not kicking a can down the road, but a whole Euro pallet full of cans!

            Apart from that, Sinn’s statements filter down to the public opinion of course, which contributes to the ‘lazy mediterranean’ view of the public, the diligent german saver is asked again to cough up for the Greeks, stirring all kinds of sentiments and nationalistic bullcrap.

          • Sinn doesn’t get the biggest laugh, how the German banks used the ECB for thieving and spying a la Sméagol in Lord of the Rings, the Ring being the interbank lending that was abused, they now find themselves exposed on the hook for Irish default!!

            We need to return the ring to it’s creator, The Dark Lord Sauron of the ECB

            Lol

          • uchrisn

            This is Karl Whelans reply. Interesting discussion, Germany are the biggest lenders to the ECB and Ireland the biggest borrowers from the ECB. As Dr. Whelan says Germany needn’t worry too much as the ECB is between us with the money printers.
            Germans really don’t like inflation which accompanies money printing though.
            On that point ECB to raise interest rates next month due to German inflation fears. Bad news for Ireland, higher repayments and a stronger euro. That trend will continue.
            Message from the ECB – We really don’t care about the unemployed people in Ireland.
            http://www.voxeu.org/index.php?q=node/6625

          • coldblow

            Uchrisn

            I read the Karl Whelan article you linked to.

            It is worrying that Sinn appears to have such a poor grasp of the technical issues and, worse, that he is (possibly) allowing his judgement to be coloured by populist Bild-style ideas which appear to be conditioning German perception.

            Two ‘appears’ and one ‘possibly’ in that sentence, but it’s still worrying when we need need a rational approach from everyone, especially Germany. The recent finger-pointing at Spanish cucumbers may fit into a pattern.

          • @Coldblow & all

            I read the paper from Horn/Linden as well, unfortunately only in german at the moment but may appear in english on Olaf’s blog here:

            http://olafstorbeck.com/

            The problem I see that IFO is VERY influential in Germany, forgot that, THE most influential, period. When H.W.S. presents such material it will filter down to the public opinion, hence feed into the already poisoned atmosphere concerning GIPSY’s – I add the Y for Italy.

            Again, for me the most important aspect is the insight I take away from this disucssion concerning the structural banking problems, they are still the same, and basel III is insufficient to address them.

            Really, imagine someone kicking a few dozen cans down the road…. tricky!

          • “The statute governing the ECB requires that it must be solvent, so it is as close as one can come to a completely safe borrower. Because of this, the Bundesbank’s Target2 claim does not represent a risk to the Bundesbank’s balance sheet. The current risk to the Bundesbank stems from the requirement that national county central banks recapitalise the ECB should it became insolvent due to losses on its lending operations or its portfolio of government bonds. The statute requires national country central banks to contribute to this recapitalisation exercise in proportion to their ECB capital. In Germany’s case, this would require covering 27% of credit losses. If the Bundesbank does not have sufficient funds to cover these losses, it would need to be recapitalised by the German taxpayer.”

            Karl is contradicting himself there. He explains that the ECB is liable for losses, not the Bundesbank; but then he explains the Bundesbank is liable for 27% of credit losses, say €40 bn for Ireland alone.

            This would mean Bundesbank is indeed liable and hugely exposed for such losses.

          • coldblow

            Colm

            Yes, they are on the hook, as Karl Whelan explains in the next sentence, but that isn’t the point.

            What is important here is that Sinn clearly does not understand how the system works (the financial ‘plumbing’ as KW calls it) and he is making unworkable policy proposals on the basis of this misunderstanding. This is Georg’s point.

            You could argue that this is a simple mistake on the part of Sinn and is not a wilful misinterpretation of things. However, even if he didn’t deliberately set out to distort the facts he appears to be, let’s say, er, ‘predisposed’ to do so.

            KW syas that Sinn uses his own misinterpreation as the basis to argue , firstly, that Germany is being “crowded out” of ECB credit and, secondly, that debtor nations in the system (the biggest being Ireland) should settle up annually, which would be 150bn in our case. KW rightly calls this ‘nonsense’ and (afair) “extremely dangerous”.

            A touch of the Dr Strangelove’s perhaps?

            I think there’s a thread on this at irisheconomy.ie which I’ll try to have a look at later.

          • coldblow

            I checked irisheconomy.ie earlier. Views there differ between those who think that Sinn did this intentionally for political reasons and those who think he made a mistake.

        • @coldblow,

          I am getting their newsletter since a long time, and I watch most of his presentations.The very least that feel is safe to say is that he has a very german centric view on things.

          Besides that, it really shows, and not only this target 2 discussion, but take the ELA for example. it is the same murky stuff where there is absolutely no consent between economists. It is structural and never was addressed in what, way over 4 years in this Heist, but they brought us BASEL III instead!

          There are many such corpses buried in our monetary messed up system that is dominated by neoliberal forces.

  18. Cringe with embarrassment, folks, we’ve drawn down the bulk of the bailout at 5.8% penal interest, so negotiations are only about reductions to interest rate on the remaining tranches.

    Our position is now we are not asking for a 3% reduction, or 5% or a rate to match our growth rate, we’re only asking for a miserable .6% reduction to 5.2% on the remainder.

    Our position is no default, do not burn senior bondholders, low tax for rich Bono tax exiles.

    Apparently they belong to a new breed of stateless creatures, who, because they earn money globally, they feel no obligation to pay tax at home; but for some reason they like to keep their passports and retain homes here and avail of public services/roads/ transport etc.

    Instead of burning senior bondholders Ireland’s policy is to burn senior pensioners?

    • Even our bete noire Sarkozy’s view we should target taxing multinationals with more Corporation Tax rather than senior pensioners is given short shift and not the probity of research and debate backed up with proper analysis/figures it should have:) Or the effect a cap on public service salaries and state owned banks at €150 K and banning of bonuses:) we’ll not consider that either. Don’t try to open up a debate about who’s feeding at the trough….but we’ve been told the next budget will be a difficult one as we trundle along the road of default.

    • adamabyss

      For some reason ‘they’ (Bono) also love to preach to the rest of us on how we should live our lives while they are off ass-licking the corrupt political elite of the world. What a pretentious twerp that guy is! And crap music too!

  19. Dorothy Jones

    Some pros and cons of regulation are set out in The Economist special report on International Banking of 14 May 2011 titled:`Chained but not Untamed´. The Volcker Rule of the Frank Dodd Act 2010 (US) restricts banks´ability to trade, sets charges and perhaps limits the ability of the Central Bank to act as a lender of last resort.Basel 3 sets capital ratio at 10.5%, (RBS had 3-5% at it´s crisis point) more in equity than capital instruments. While Japan´s regulation may have resulted in banks buying govt. bonds rather than lending, an important point in favour of higher capital ratios is the huge cost to society when the banks fail. The bigger banks have a Darwinian advantage because of the fear that they maight fail, in that they may access cheaper funding. Indian and Kenyan banks doing well apparently on the foot of reregulation maesures…

  20. real terms

    The new bank capital rules are Basle based, so global. Some British and French banks opposed to them partly for the reasons you say but also to reduce costs. Meanwhile, Spanish banks weathered the early crisis in part because of their clever capital cushion requirements. But the real culprit is overleveraging and wheeling and dealing in opaque, dodgy, financial products: Derivatives are ballooning back to where they were before the crisis.

  21. Praetorian

    At the very least we need to de-code the jargon of the ‘market place’ if we are to have any chance of making sense of the world around us,a good mental filter is required at all times (Would be interesting to see how many terms are out there):

    Celtic Tiger Economy = Ponziconomy.

    Banker = Bankster.

    Labour flexibility = Precarity. (http://en.wikipedia.org/wiki/Precarity)

    Western Democracy = Plutocracy.

    Capitalism = Neoliberal Capitalism.

    Free Market = Protectionism for ‘developed’ economies (i.e. CAP), open markets in ‘developing’ countries.

    Downsizing = Unemployment.

    Rationalisation = Unemployment.

    Restructuring = Unemployment.

    Light touch regulation = Zero regulation.

    Natural market equilibrium = Socio-economic inequalities.

    ‘Trickle down’ economics = Concentration of wealth.

    Green shoots = Illusion of growth for public consumption.

    Turned a corner = Economic Cul De Sac.

    • adamabyss

      Spot on.

    • Deco

      Lot of truth there. Praetorian. You will inspire the rest of to resolve a few more.

      Media = comply with the agenda of our advertising sponsors

      Change = new faces, same agenda

      Tackle the crisis = preserve the power of the oligarchy

      Regulatory Framework = maintain the pretence

      Level the playing field = make it harder for the toiling classes

      The Knowledge economy = “who exactly do you know, and how powerful are they ?”

      Long Term Economic Value = BS.

      • Praetorian

        Yes, they say in war the first casualty is innocence, in any economic war or ‘Economaggedon’, language is most defintely the second casualty.

        Accuracy in terminology is critical such as ‘RTE-PRAVDA’, such terms need to become become part of the daily discourse and thus directly challenge the propaganda:

        Bailout = Further Indebtedness.

        Economists = High Priests of the Prevailing economic othordoxy (with honourable exceptions).

        Media = Corporate Media.

        Political Parties = Business Parties.

        Elections = Media Events.

        ECB = Elite Central Bank.

    • Colin

      McWilliams Solution = Take 10% of his plan and ignore the crux of the plan and blame McWilliams when Shit hits the fan (Gormless school of Economics).

      Supply and Demand = Rig the supply and demand outrageous money.

      Ireland is Open for Business = Then find out who closed us down!

      Investigations are Complex = We couldn’t be arsed dealing with fraud.

      Europe has been good to us = Let’s not ask for a fair hearing.

      • Praetorian

        Think Chomsky sums up the entire situation very well, calls the hypocrisy:

        “In theory, the legislative act that authorized the bailout was a bargain: The financial institutions would be saved by the taxpayer, and the victims of their misdeeds would be somewhat compensated by measures to protect home values and preserve homeownership.

        Part of the bargain was kept: The financial institutions were rewarded lavishly for causing the crisis, and forgiven for outright crimes. But the rest of the program floundered.

        As Barofsky writes: “Foreclosures continue to mount, with 8 million to 13 million filings forecast over the program’s lifetime” while “the biggest banks are 20 percent larger than they were before the crisis and control a larger part of our economy than ever. They reasonably assume that the government will rescue them again, if necessary. Indeed, credit rating agencies incorporate future government bailouts into their assessments of the largest banks, exaggerating market distortions that provide them with an unfair advantage over smaller institutions, which continue to struggle.”

        In short, President Obama’s programs were “a giveaway to Wall Street executives” and a blow in the solar plexus to their defenseless victims.

        The outcome should surprise only those who insist on hopeless naivete about the design and implementation of policy, particularly when economic power is highly concentrated and state capitalism has entered into a new stage of “creative destruction,” to borrow Joseph Schumpeter’s famous phrase, but with a twist: creative in ways to enrich and empower the rich and powerful, while the rest are free to survive as they may, while celebrating Loyalty and Law Day.”
        http://www.chomsky.info/articles/20110502.htm

        • Deco

          The destruction is only allowed below a certain level.

          Above a certain level we see “too big to fail”…

          And of course, we also have “too big (and well connected) to nail” for the banksters who never do time for the crime.

      • Deco

        Investigations are complex = our friends are guilty as …. and we are trying to help them out of it.

        Bailout = sucker the taxpayers with the bill.

        Public sector reform = an amputation here, an amputation there, but don’t mess with the quangos

        Olli Rehn = Do as I say, not as I do.

        Austerity = can the people at the bottom please squeeze in together so that we can make more room for the fat cats…

  22. paddyjones

    The reason no new bank licenses are being issued is that the State wants to clean up AIB and BOI so they can sell them. They would not want another bank to enter the oligopoly.
    The last place I would invest is in Irish banking , it will be another 5 years before the two pillar banks are in a fit state to sell but they could be worth 10 billion each in the years to come….handy money for the government to have.

    • RE “The last place I would invest is in Irish banking” and
      “they could be worth 10 billion each in the years to come”

      Ha,ha,ha

      Go on, go on, put your money in:)

    • Colin

      So sell your house now paddyjones, use the money to buy shares in the two Pillars, and start renting accomodation. You’ll be a millionaire in 5 years time and you can gloat to us here on David’s website! Get your whole extended family to follow you, then it’ll really be a case of ‘keeping up with the Joneses’!

    • @paddyjones

      You are good at collective amnesia …what comes next is halucination….and terminal stop is ….dead broke.

  23. DC

    Doctors differ patients die.

    One of the problems of the current GFC is actually deciding on how much debt/interest we have incurred and the projections for what the future liabilities are.

    Someone spoke of people living in fear, and i believe a combination of misinformation and redirection is to blame for this situation.

    Have a look at the following links.

    http://economic-incentives.blogspot.com/2011/05/constantin-gurdgiev-on-irelands-public.html

    http://economic-incentives.blogspot.com/2011/05/public-debt-sums-past-and-future.html

    if even senior academics are at odds with respect to the current mess, how do we expect lowly politicians and civil servants to have any chance of acting in a wise and considered manner.

    What we need is clear concise and accurate information disseminated to joe public, not trial by Prime Time, Vincent Browne etc.

    Cut through the bullshit, find out the true picture and make a fucking decision on what to do.

    Leadership is about making decisons. Informed Decisions. The truth is out there but i honestly think the vast majority of people dont want to hear it. We have become conditioned to soundbites, headlines, and opinion.

    Main stream media is a joke but people persist in their addiction to it.

    To sum up

    What do we (ordinary citizen) owe?
    What do we not owe?
    Can we pay?
    Should we pay?
    What are the real costs of (job cuts, pay cuts etc)of making a decision.
    Do we accept the cost of making said decison?

    • uchrisn

      We owe currently 106 billion or about 97% of GDP.
      Our possible exposure to our banking system is about 300billion or 270% of GDP through the government garantee scheme of the banks which was extended recently by Mr.Noonan. The 300billion is why no-one wants to lend us money.
      Theoretically we could not owe the 300billion at all if we let the government garantee scheme lapse.
      There is a good 40 billion of the 106 which could be theoretically classified as ‘odius debt’ and written off by copying Ecuador.
      We can’t cover the 300billion, everyone knows that. We can pay the 106 billion just about.
      We shouldn’t pay any more. We shouldn’t garantee the banks as it is useless as everyone knows we can’t cover it anyway.
      If we make a decision to withdraw the garantee, there might be some job losses in the banking sector for a short time, until more banks come in and open up. It is my belief that the ECB would step in and garantee the Irish banks instead to avoid contagion so maybe no losses. The IMF and EU would treathen to withdraw the bailout package. The IMF would have to continue to help as in the case of Iceland. So perhaps small public paycuts which will have to be made in any case.
      We accept the cost of making the decision as we will be better off in 2 years time and on as in the case of Iceland.

    • I wouldn’t worry too much about the overall figure approx €250 bn to go by Gurdgiev and Morgan Kelly. MK has a history of accuracy in these matters.

      I think his figures are understated as there is a large whack of mortgage debt that won’t be repaid plus a huge amount of personal debt.

      There is also the moving goalposts of growth or lack of, that will effect liquidity in the banks and our ability to refinance the debt we already have.

      The fact is whatever metrics you use, that amount of debt cannot be paid back.

      The real question to ask is not the total amount, but what is the annual repayment of debt as a percentage of tax revenue and whether our economy can afford this level of obligation and grow at the same time.

      Currently the bailout stress tests already fail as they depend on growth figures of +3% and we are knocking on the door of 0% growth. To see the relationship between debt and growth, consider the following:

      If our debt repayments are 50% of gross tax revenue this year, next year if our revenue is down 10% due to lower growth at -3% (the 10% multiplier example caused by the deflationary effects of greater emigration/higher unemployment unemployment costs); then the true cost this year of repaying our debt is 50/90 = 55.555% of tax revenue. There is an exponential growth in the weight of debt.

      Look at this in its simplest form. The ‘bailout’ ‘Hiroshima Economic bomb’, whatever you want to call it, calculated our ability to grow and pay back the loans at 3-4%, these figures are already failed.

      Figures don’t even take into account the figures in your links meant to provide liquidity support for the banks, or the off balance sheet Nama loans.

      We are sunk and currently being treated by all including the ECB as a mine adrift in the sea to be avoided at all costs by other shipping:)

      I think the figure given for each ordinary citizen is €30,000:) Government are telling me I’m responsible for this share of the debt. I know for a fact anyone telling me I’m responsible for this debt is only a thief after my money:)

      • coldblow

        Colm, what was all that argument on irisheconomy about MK and Gurdgiev’s figs being exaggerated because of double counting? I couldn’t be bothered looking into it. Perhaps you have done?

        • uchrisn

          We are on the same page on the debt figures.
          My figure of current debt is 107b because I don’t include promissory notes for the banks or NAMA.
          I instead included them in the total 300billion exposure we have on the banks as for me that is the real issue. For me this is a clearer way.
          Morgan Kelly is including that stuff in his 250billion figure which is for 2014 and includes NAMA 45billion and promissory notes 35billion.
          He is basically saying that we’ll be paying out 70b of our 300billion exposure. to the banks, I’m saying we have a 300billion exposure.

  24. Deco

    David – you were annoyed recently concerning the “celebrity economist” tag. Not sure who came up with it, but to be honest it is only a label, used to dismiss your line of argument.

    What concerns me know is the fact that with the state takeover of the banking system, that you are know getting to the point that a large proportion of the economics profession is now dependent on the state.

    Now, the brightest and best economics, like Gurdgiev, Kinsella, Kelly, etc… do not have to worry, because they have the intellectual talent.

    But we are also paying for the ESRI, as well.

    The argument could be made that the state is paying for two many economists. And indeed taking none of them seriously, or perhaps taking the wrong economists seriously.

    The question is not concerning celebrity economists. (this usually refers to you and George Lee). There are real questions about the value for money that the people are getting from economists that are now on the payroll of the taxpayer, or taxpayer funded organizations. In particular with reference to the ESRI, and bank economists.

    Surely the time has come for the state to release into the private sector units dedicated to economic forecasting which have developed consistent tendencies to get it wrong. On an intellectual level it would put an end to this continual roll out of economists from the ESRI and the banks who function more like lawyers than economists.

    Nothing wrong with being a celebrity economist. The term actually has collected value, paradoxically.

    The greatest insult to the economics profession is to say that an economist is behaving like a lawyer – ie. representing an interest in his argument – and that he is not being scientifically honest in his economic analysis.

    That is a really serious problem.

    • Colin

      Deco,

      I prefer the term ‘an altruistic economist’, maybe it’ll catch on. McWilliams certainly is one, he has saved me and many others mental anguish, financial loss, negativity equity and a whole host of other headaches, all because he pointed out to us a long time ago that Property in Ireland was just a large Ponzi Scheme. This is why I’m a supporter and follower of David and forever grateful.

      • Deco

        You are correct. He has given all of us a top notch analysis of what is going on here. I can remember reading the newspaper articles years ago comparing the Gold Rush in California to the Irish property boom, and how sensible investment was “crowded out” by the “speculators” looking for the easy money. And you will people all over the place, at random who are grateful to David.

        The other side of the coin were the arguments where economists behaved like lawyers “I am representing the best interest of my client”. This can be a bank, a political philosophy (like the PDs), a need for institutional survival (the ESRI), an agenda (EU centralization), an industry sector (though people in the FIRE economy are not exactly industrious – they seem to destroy and delude, far more than they ever create.

        I suppose that is why Constantin Gurdgiev calls his site “trueeconomics” because there is a massive amount of “clientelist” economics in circulation.

    • coldblow

      The “celebrity economist” tag is background noise probably due as much to personal animosity as to professional disagreement. I think it’s very easy to underestimate the effect of the former on how those who should know better form their opinions, but we’re all human. I’m being charitable: the background noise is deliberate and malicious.

      Crotty was glad to get away from the ivory towers – he knew the score. As for the bank economists and their ilk, well I don’t think anyone needs any advice by now.

      There’s an element of running with the herd in it too, as in the treatment of the ‘crazies’ who want to ‘burn the bondholders’ etc etc. Some will have reached such judgements through their own analysis, but more don’t want to appear naive, or just want to join in on the winning side. I imagine that a lot of the IT reading prof. and wannabe prof. classes fall into this group. This is what passes for respectability nowadays.

      Then there are those who try to justify their own stupidity in buying into the bubble. This being Ireland, most probably pick up on these phrases for really no other reason than, knowing little or nothing, that most other people do – what I’ve now (ie for the last 4 secs) come to call the “everyone knows” factor. (I don’t know if it’s got that far and I don’t care.) You could go on at length. It’s like an iceberg – most of it’s invisible.

  25. uchrisn

    ECB interest rise next month.
    Interest rate rises strenghtens the currency as a higher interest rate gives people more incentive to buy your currency and save in that currency. This stronger currency can decrease exports.
    The rising interest rates also help to make worse the unemployment problems due to decreased lending and investment.
    The ECB is not thinking enough of employment, it is focused on inflation. It also does not think of the perhiphery countries.
    Ireland could have left the Euro doing its boom years as the interest rates were too low. Now in the recession its interest rates are too high.

  26. coldblow

    As our world-class regulation was not adequate to prevent the crisis we need to make it more world class still. Is féidir linn!

  27. Praetorian

    Seven problems a Recovery won’t fix by Umair Haque.

    1) Stagnation. Median income has stagnated for decades and mere “recovery” probably isn’t enough to do much about it.

    2)Disemployment. The good news is we’re still creating jobs. But the bad news isn’t just that we’re not creating enough of them to go around.

    3)Insecurity. Here’s a number that ought to set off nine-bell alarms in your head: nearly half of Americans are financially fragile – as in they probably couldn’t raise $2000 within 30 days to meet an unexpected expense.

    4) Toxicity. The industrial age economy’s addicted to harm: in order to profit, it’s more often than not got to trample on people, nature, or society.

    5)Pointlessness. Here’s a statistic that ought to set your hair on fire: somewhere between 50 and 75% of “employees” are “disengaged” (depending on whose numbers you want to buy): they don’t care much, if at all, about the work they do. But can you blame them?

    6)Dumbification. Educational attainment has slowed in recent years, while unemployment has spiked for the least educated. Couple that with a “news” media that, instead of informing, actually misinforms.

    7)Dehumanization. As I’ve noted, GDP has long decoupled from more meaningful measures of welfare, like the ISEW or the GPI, that begin to measure what matter to humans, not just sociopaths in $7000 suits.

    Full Article
    http://blogs.hbr.org/haque/2011/06/seven_problems_a_recovery_wont.html

  28. StephenKenny

    It’s not really about too little, or too much regulation, it’s slightly to do with having the right regulation, but really, the 99%, is about enforcing regulations.

    If you want to hear the loudest, most prolonged, and most sincere laughter that you are ever likely to, just walk into a bar or restaurant in Manhattan or the CIty of London, say “Chinese walls”, and wait for those two word to penetrate the effects of the $10,000 bottles of wine.

  29. Rather outdated but useful doc on differences between the Fed and Lord Sauron(ECB)

    You’ll need right click/save as

    http://people.brandeis.edu/~cecchett/pdf/cecchetti%20osullivan%202003.pdf

    In the Federal
    Reserve System there is a sense in which the Board of Governors is in control. At the ECB,
    casual observation suggests that the reverse is true. While the Board of Governors supervises
    the regional Federal Reserve Banks, approving their budgets and overall management decisions,
    in the ESCB, it is the NCB governors who supervise the ECB.

    In Ireland the ICB morphed into Anglo. Fed has power and responsibility to oversee the affairs of the equivalent of its Central Banks spread across the US

    “As members of the
    Governing Council, Governors of the NCB’s of the euro area are responsible for making policy recommendations on the basis of the economy of the Euro-area as a whole and not on the basis of the economic situations in their own countries. The ability to do this is facilitated by the lack of formal voting at Governing Council meetings, which precludes the possibility that a vote by a particular Governor that was not consistent with the idiosyncratic needs of his own country at that time would become public. The preponderance of the evidence clearly suggests that that the Governing Council is following its mandate, and not behaving in a nationalistic way.”

    The above mandate should have meant immediate removal of Honahan, severely compromised by this tenet, in his role negotiating Ireland’s MórOnDebt ‘Bailout’

    “While the ECB’s refinancing operations are broadly similar to the Fed’s daily open market operations, there are differences. The most important is that the operations are done at all of the NCB’s in the Eurosystem simultaneously. This makes the operations much more complex. It involves both coordination among a dozen central banks and the handling of transactions with literally hundreds of banks. To give some idea of the amount of potential counterparties, at end-
    2000, some 2500 of the over 7500 credit institutions in the Euro area met the criteria to be a
    counterparty to these operations and between 400 and 600 institutions actually participated in the
    tenders for the main refinancing operations (ECB, 2001: 63). Recall, in the U.S. everything is
    done at the Federal Reserve Bank of New York, with the Open Market desk only transacting with a short list about 20 securities dealers. In addition, due to the differences in financial structure in different countries, the ECB has to contend with a much wider range of potential collateral in its refinancing operations, with the list of acceptable collateral differing by country. Under normal circumstances, the Fed just deals with U.S. Government securities.16 The other factor that makes the ECB set up inherently more cumbersome and more risky than that in the US is the sheer volume of funds that is refinanced on a regular basis.”

    Huge risk, to the point of wondering how much collateral, spread among all the funding counter parties of the ECB, is actually AAA, or just as makEupE as the liquidity and solvency of Anglo

  30. Philip

    I have a fundamental problem with the line of argument being presented by DMcW. Of itself, I have no issue with the line that says we are clobbered by the legacy of past mistakes and the looney rules that have applied since then. The problem I have is the backdrop. Iceland or Argentina are not comparable.

    Do we have a state in the USA which has gone bankrupt. What has its lifecycle been? How has it been managed? I am thinking of cities that have gone bang. Answer? I think the US have not solved this issue and neither has Europe … yet. There are no theories or history to help us and DMcW’s analogies really do not apply. We are part of a fed just like the US.

    There is a lot of popular stuff about burning this and that and facing up to whoever. Reality is… are you sure most of you can handle the consequences? DO you understand the short to medium term consequences for a country with zero access to energy resources. We are generations from making green work properly. Do you really want to leave the table of mostly like minded and generally competent people who have learned the hard way how defeat can be so easily snatched from the jaws of victory.

    We still have major issues of corruption, nepotism, cronyism, tax evasion, poor democracy and lousy legal support which are doing us more damage than any IMF or ECB ever did. To date, what I see happening is that these old legacies are starting to come under pressure as the IMF demands lower legal fees … Do you seriously believe for one second that our so called independance in economic sovereignty would somehow make these fundamental flaws go away faster.

    No no….IMF. ECB… I like what I see. More efficiencies in the PS and health sectors and the legal profession and accountacy professions coming under pressure. Good start.

    Best of times are coming. Vorsprung durch a kick in the goolies lads. Wakey wakey. This is a tricky situation. Remember who started it. Now we have an opportunity to kill the true root cause. Gombeenism – Insiderism…

    • Deco

      The fact is that Gombeenism represents an inefficiency that is costing us all dearly.

      Basically, it is a case of “follow the money”.

      Look at IBEC. It is a lobbying organization for careerist who head up organizations, a high percentage of who are either taxpayer owned or taxpayer subsidized.

      Why are PAYE workers subsidizing companies who use IBEC as a lobbying organization, to take more money from PAYE workers ? It is absurd.

      The taxpayers need to demand that all state run and state assisted companies stop paying for this toxic lobbyist organization which is subverting democracy. It is a complete sham. To add in further insult, the same careerists end up getting NED posts on various state quangoes and semi-state companies.

      We even have that little so&so Seanie Fitz getting free flights from the national carrier so that he can meet his chums in Marbella (you know – the ones with multiple holding companies – who seperated their assets from their liabilities and left the taxpayer with their liabilities).

      The Legal and Accounting professions need to be given a dose of the anger that is within the rest of the population.

      There is also a strong case to be made to simplify the tax code, cut out all the various exemptions and loopholes and make it possible for the ordinary citizen to understand what is going on without having to need a lawyer or an accountant for the smallest task.

    • Malcolm McClure

      Philip: Well said. There’s a saying, ‘Be careful what you wish for,– one day you might get it’.

    • coldblow

      Philip

      You are right to say what you think but I think you are wrong in the main here. You are probably right that most poeple don’t realize what would happen if the plug was pulled, but I don’t think it needs to be done that way. It’s good to hear that the legal and accountancy professions are being taken on (I don’t follow the news) but I’ll believe it when I see it. I mean, I don’t believe it. (I’d follow the news if it could be done in 2 mins in bullet without the waffle – perhaps that’s the intention.)

      I think it’s a worse place we are going to, but I’m open to persuasion. But we are going to get to the same place, more or less, whichever way we travel, ie fast or slow. Or rather: fast or not-quite-so-fast.

      IMF, ECB: unlike you, I don’t like what I see. See for ex. Simon Johnson’s latest articles on what he sees as the reasons for IMF involvement and Lagarde’s reasons for wanting that job (I think someone gave a link on this thread or the last one).

      No historical precedent: not directly, obviously, as every case is different. But to my mind the drift of world history over the last 40 odd years is clear enough.

      The picture is muddled. It’s not a simple question of either burning the bond holders or not. There is a whole range of choices to be made (and verious, if not endless, permutations of same): bondholders, the EU, NAMA, the Euro, immediate default on banking debt, default on national debt, the MK proposal of a rapid brutal return to running a surplus (vs staggering this over a no. of years to minimize disruption), banking system, what approach to take in negotiating with Europe. There’s also tackling the vestted interests (retail, the profs., PS, semi states, etc), industrial strategy (remember those old articles about Silicon Bog?), rationalizing the PS, pensions crisis, facing political choices re wealth tax, land tax, tax evasion, welfare, constitutional reform, media, etc etc. And energy as you say. Crime (blue collar and white). Oh yes, and unemployment too – they only reason they are not forgotten is that they cost a lot to look after. And personal and mortgage debt.

      As no two people will agree on everything it’s not really a question of simiplistic solutions vs sensible ones. Perhaps it’s a desire for change vs keeping the status quo. Looking at the turnout for DOFlynn the status quo is winning yet we keep hearing about the dangers of populism?

      I don’t know. And looking at that list I just wrote above, I wish I hadn’t done it now…

      • “The picture is muddled.”

        It’s patterns that count. If you are confused, its better than being misinformed. But if you can see the patterns that point to a course of action, such as default; then, you are correct to advocate for same. People who advocate for default are generally able to see the wood for the trees; those who don’t argue for default, are sometimes confused, at other times, misinformed, often plain wrong and prone to the belief banks like Anglo have solvency problems, beliefs that lead to disaster:)

  31. Praetorian

    David Harvey: The Crises of Capitalism: http://www.youtube.com/watch?v=26o22Y33h9s

  32. BIS quarterly

    http://www.bis.org/publ/qtrpdf/r_qt1106.pdf

    German Banks invested in Greece with E 23 bln. Breakdown was in FTD. This is clear evidence on the reason for the German delay tactics.

  33. Bang Tumble Fall

    Over the years on this site there was a sequence of events like a melody and expectations happened in the time it was .Currently we seem to be lodged somewhere in a DENIAL of Default and just suspending in the words we use here .Watching the Government struggle with The Markets is de-rigeur of the moments of now.Do we not yet realise when the Eruptions occur ( Default) the Frenzy that will follow and the Panic and the Civil Urest etc etc

    Its a simmering boiling pot that Noonan has on a west Limerick fireplace and bragging about his quests in an earlier youth that no longer is relevantand repeating this in the corridors of the EU .

    We had an earlier Denial of Austerity by the Public and that now has come to past now they are Denial of Default sponsored by the Governmet .

    Does this Forum understand what BANG means ?

  34. Deco

    Here is an article by US based economic commentator Chris Martenson. The most interesting part is where he talks about official and unofficial debt. You can see that a lot of countries are fudging their debt obligation statistics. It not just the Greeks. But the Greeks are getting the abuse from the ECB and the IMF. France is in a very precarious position – worse even than the UK. And the UK’s statistics should be of concern to us.

    http://www.chrismartenson.com/blog/death-debt/58941

    • Deco

      Unfortunately Martenson does not provide Irish statistics. But it is clear that several EU countries which are making demands from the PIGS are themselves in a much worse position with regard to debt, and it could be argued that they are fudging the statistics just as much as Greece. The one country which surprises everybody is Spain, which has lower long term unaccounted for obligations than it’s peers – and which is far more solvent long term than either France or Germany. The attitude of France to Greece in particular, stinks of hypocrisy, considering France is next in line when you use the unofficial statistics. No wonder Sarko is trying to suck every penny out of the PIGS, and no wonder Lagarde is trying to head up the IMF.

    • Deco

      This I am taking as the key quote from Masterson.

      {
      If everybody owes everybody else, then kicking the can down the road only works if there’s more wealth, more growth, and sufficient economic activity down that road to service the past debts. If any one participant drops the baton in the debt relay race, the absurdity of the situation becomes unavoidable and the cause is lost.

      When we hold this view, it is abundantly clear that adding more debt along the way only increases the burdens and is therefore ultimately counterproductive, although it does grant the gift of additional time to avoid facing the truth.
      }

      This is what is happening. Politicians have a short term horizon. A “Hold on” strategy. Therefore the politicians are doing anything that will avoid facing the truth.

      My conclusion – nobody under the age of 55 should assume that there will be public healthcare, or a pension system to look after them in their old age. Based on the above statistics, they will be unaffordable, when the kick the can down the road strategy runs out of road.

      • Deco

        Ireland’s piece in all of this is that Ireland is not supposed to drop the baton. But this is ludicruous – because there are countries that are worse than us, and which will inevitably drop the baton and crash the system.

        There is nothing wrong with crashing the system. It will get rebuilt. However, continually increasing debt levels will end up crashing civil society.

  35. @Philip

    Re “Do you seriously believe for one second that our so called independance in economic sovereignty would somehow make these fundamental flaws go away faster.”

    I do.

    Superficially it may appear attractive costs in the legal profession “corruption, nepotism, cronyism, tax evasion” are being tackled. But there is a huge cost to be paid.

    The problem is that the above are nothing to do with making our economy more productive or efficient, the benefits go not to the economy per se, but to bondholders and government debt that should not be paid in the first place. This is gross inefficiency on a capitalist level. To pay the proverbial Golden Egg, the goose is to be slain.

    The method is as follows:

    Using devices such as ‘downward wage flexibility’; emigration; unemployment; inferior quality and fewer social services; degradation of public services; the productive heart of the economy will be taken out and this country will be turned into a debt dependent vassal state.

    In the short term, with growth at 0% and €3.6 bn to be taken out of the economy next budget followed by another €4.4 bn in the following year, the economy will slip into a deflationary downward spiral. The above austerity because of its deflationary effects will make our debts grow bigger, rather than smaller. There will be fewer people around to pay for ever increasing debt levels.

    The situation will struggle along until 2013 at which time because of the visible social and economic costs to our economy and the visible certainty of a need to default, there will probability be a 30% haircut of our debts.

    However because of the serious damage done to our economy by these cuts and the disastrous and catastrophic effects of negative growth and deflation, pressure will increase to offset the damage by a rise in our corporate tax rate to a common European Standard. At this point the haircuts will have little to no effect, too little and too late.

    Ireland Inc will divide into a duopoly of high end, high skilled manufacturing eg in the medical devices industry and a broken home grown manufacturing and services industry base beset with high taxes, contracting client base and because of deflation higher energy costs with smaller numbers employed. Employment levels will continue to contract.

    Meanwhile until 2013 time is given to get all bondholders off the hook and as many paid in full through transfer of private debt onto sovereign debt as speedily as possible.

    The method is a two phase prong attack. Firstly, get all private debt transferred onto the taxpayer and the sovereign. Second, when the transfer is complete, to share the debt between the Irish sovereign and the troika of EU/ECB/IMF in a way yet to be decided.

    Our sovereign independence as an economic unit will be fully transferred to the Troika and we will be treated as a bankrupt state.

    So, the ‘Downward Wage Flexibility’ and other ‘reforms’ should be treated much in the same way as the stripping down of train loads of human cargo by the Nazi’s during the 2nd World War.

    Those people were not being prepared for Butlins.

    We need instead to follow Iceland’s lead and default based on principles set down by the Althing, see earlier posts.

  36. Praetorian

    Truly sickening salaries.

    “A cut of 30 per cent in Pat Kenny’s 2008 salary would mean a drop from €950,976 to €665,683. Marian Finucane, a 30 per cent cut in her income from the 2008 peak would result in a drop from €570,000 to €399,000. Ryan Tubridy earned €533,333 in 2008, although he is likely to be the best-paid presenter now, as successor to Kenny on The Late Late Show . Liveline ’s Joe Duffy’s was paid €408,889 in 2008. A 30 per cent cut would bring this to €286,222.
    The other most highly-paid presenters at the station in 2008 were Eamon Dunphy (€328,051), Miriam OCallaghan (€301,667), Derek Mooney (€286,809), George Hamilton (€219,833) and Seán O’Rourke (€218,656).”
    http://www.irishtimes.com/newspaper/frontpage/2011/0610/1224298692429.html

    • Both Pravda and RTE are not going to bite the hand that feeds them = Pravda RTE:) We could do with greater number and variety of presenters at €150K each:)

  37. One way of dealing with fears re FDI if we default and leave the euro, would be a reduction in Corporate Tax to 6%? With lower costs, efficiencies, greater competitiveness, increase in tourism, agri sector, pretty soon the export sector would boom, Singapore here we come:)

    The alternative is ‘Last to leave, turn out the lights’ or, our politico Dementors lead the Death(Debt) Eaters (Banks) and Voldemort to feast on Ireland’s remains:)

  38. Colin

    Anyone see Vincent Browne’s show last night? We, the viewers learned that Enda is playing a good game of poker. Its certainly reassuring to know that Enda knows the game he’s playing, and also knows he’s got a good hand.

    Plus, I see Croatia has been cleared to join the EU. We can throw a spanner in the works there and hold up their accession. An even better hand of poker now.

    I’m keeping faith with Peter Mathews. Looking forward to a certain forecasted ‘event’ later this month that will involve Greece defaulting. Until then, I think We’re better off keeping our head down and keeping away from the ECB radar until the shit hits the fan and then we can really start playing poker.

    • Deco

      Enda might be playing poker, but what if everybody else is playing 25 ?

      • Colin

        Mathews is talking to Enda through the earpiece, while Enda plays the cards at the poker table like a Thunderbird. Gurdgiev is having a chin wag with Mathews behind the scenes. Would you want it any other way?

    • Saw Lucinda Creighton on Primetime who explained the other 27 members had to agree to any changes to our ‘bailout’ terms.

      She’s I assume very busy having tea and cucumber sandwiches visiting them all…..and will be very busy enjoying meeting them all over the short to medium term:)

      Ah, Go on, give us a rate cut. Go, go on!

      Apparently someone heard the following whispers when she left a meeting, “She’s a lovely girl, but dammit if I’m giving those Pigs a rate cut…”:)

      lol

    • I saw it too, the idea that ‘Enda is playing a good game of poker’ a la Mathews was mocked given the humiliating results shown so far.

      So, perhaps its best we assume the game of poker Enda is playing is, Poker in the Dark:) It’s blind man’s buff:)

  39. adamabyss

    Brian Lenihan has died.

    • Colin

      His canonisation has begun already.

    • Deco

      Yes. Brian Lenihan kept working when it was probably the very thing he should not have done for his health. Anyway, may the man rest in peace. Some of his decisions baffled me, but then as we learned after Lisbon 1 we lost our right to do our own thing years ago.

      • 52 is really sad. My Sympathy to his family.

      • Colin

        Deco,

        All of his political decisions were baffling. Why did he ignore the crucial elements of McWilliams’ Bank Guarantee plan? Why did he ignore Peter Mathews sums on bank debt? Why did he ignore Paul Sommervilles’s bond rates advice? Why did he not resign from office when he learned he was gravely ill? Why did he contest FF leadership knowing he didn’t have long to live? Why did he court FF backbenchers in seeking to overthrow Cowen and then deny he did it?

        He made bad political decision after bad political decision. A disasterous political career by any measure.

        • real terms

          Bad taste, this. Bad timing certainly.

          • Colin

            I disagree. I laid out the facts. I have not attacked him personally. He made bad political decisions, I’ve left it at that. I don’t welcome his passing, I don’t wish to dance on his grave, I have not slurred him.

            What is it with people like you, the ‘ridicule him in life, praise him in death’ brigade? Does his passing absolve him of all his errors, errors which many people have suffered greatly from?

          • PMC

            I’d agree with Colin – I can’t understand the need for all the hyperbole and extreme praise given to public figures on their passing.
            The were probably enough newspaper articles criticising his policies to cover to the entire island.
            It’s not in any way criticising Brian Lenihan for his personal charachteristics, as he appeared to be a very personable and likeable charachter outside of politics.

            “the ‘ridicule him in life, praise him in death’ brigade”

            Many journalists will be involved in the above over the coming days…

          • irishminx

            I didn’t like Brian Lenihans actions in politics or his politics. I didn’t know the individual Brian Lenihan. I think it is a good idea to separate the person from their job/politics etc.

            It is sad that he has died for his loved ones.
            He was a young man.

            I read recently from folk who had near death experiences that when you die, you judge yourself.
            I hope Brian Lenihan loved himself enough to judge himself gently with love.

            RIP

    • He faced unprecedented challenges in his work and in his health. He bore his illness with stoic bravery and dignity. He carried out his duties as best he could. May he rest in peace.

    • Dorothy Jones

      A sad day for the family of Brian Lenihan and sympathies to them, 52 is too young for any person to pass away.

    • Malcolm McClure

      My sincere sympathy is extended to the Lenihan family on their sad loss.

      Twitter is alive with generous tributes to his qualities as a politician and as a person.

  40. Praetorian

    BOI: Junior bondholders are getting a worse deal than expected, far worse than banks who hold the Irish bank’s bonds.

    Just 20p in the pound

    Holders of Bank of Ireland 13.375% perpetual subordinated bonds face a savage haircut on their investments. They are being offered just 20p in the pound — with worse to come if they don’t accept. Bank of Ireland calls it ‘burden sharing’ but holders can, no doubt, think up far more graphic terms for this drastic reduction in their investments — the burden of which is definitely not being shared by all bond holders. Holders of senior Bank of Ireland debt — mostly other banks — have not been called upon to accept any reduction in the value of their bonds.
    http://citywire.co.uk/money/bank-of-ireland-investors-suffer-savage-haircut/a498226

  41. Deco

    Today’s headline in Marketwatch.com -

    http://www.marketwatch.com/story/greek-default-is-inevitable-2011-06-10?dist=beforebell

    Greek Default is inevitable.

    I still reckon that Sarko is going to prevent it from happening, while releasing a PR statement to the effect that there will be a new deal to “save the Greeks”.

    This is getting increasingly absurd.

    If Greek is about to default, then what about the rest ?

    What about Ireland, Portugal, Belgium (after the divorce goes through),

    What about US states that are controlled by Tammany Hall political culture ? California ? New Jersey ? Ohio ? Illinois (and Illinois is in a very bad financial way currently with schools operating four days a week), Michigan, etc…

    If Greece defaults, I suspect that this will drive up interest rates.

  42. Adelaide

    RE: B Lendihan: I look forward the 30 minute gushing eulogy that will be the RTE News this evening. He was loyal to FF and a traitor to this country but we don’t speak ill of the dead in this deluded country so I’ll say no more.

    Q: Why is there no media coverage regarding the retirement age increase? Has this crash cause parallel worlds to be mainsfest in Ireland and I am merely exisitng one of those parallel worlds. It’s a plausible quantum explanation as any for this ‘detachness’ to fundamental reality of our situation that I sense.

    Are there several Irelands?

    • Everyone in death deserves the best part of them to be remembered and not the worst.

      Re Q,

      Yes there are several Irelands:

      Welcome to the parallel universe, glad you made it through the wormhole.

      • There are even several piggies:

        This little piggy went to market = those who wholeheartedly signed up to the ‘Common Market’

        This little piggy stayed at home = those disgruntled doubters and troublemakers who voted ‘No’

        This little piggy had roast beef = bankers, developers, politicos party on!

        This little piggy had none = the marginalised, those forced to emigrate during the boom, etc

        And this little piggy went “Wee! Wee! Wee!” all the way home = We are where we are:)

      • Colin

        Yeah, poor auld Hitler gets a hard time, shure he had his faults but doesn’t everyone deserve the best part of them to be remembered? Ditto Stalin, Pol Pot, Idi Amin, Osama Bin Ladin……

        • Yep, seems counter intuitive, but I believe everyone, without exception, Bin Laden included, the poor sod on death row, deserves a period, upon their death – to include their funeral, a decent ‘grief time’ accorded to family members, when the best part of the deceased is remembered, and we leave ‘the other part’ to the future, hopefully for objective analysis:)Never liked the scenes in Black Hawk Down of an American soldier being defiled and dragged through the streets by angry mobs.

        • thirdeye

          What ever about Hitler,Bin Ladin,Stalin their views were WELL KNOWN and NOT HIDDEN from the Public or world at large.Here we get the WORST who hid their adgends and said the opposite like Gilmore saying he WOULDNT BACK LISBON 2 TREATY but told American Emabssey for some reason privvy to his viewpoint that he WOULD VOTE SUPPORT LISBON 2 TREATY RERUN.
          Appears again we have a party supposed to be of the LEFT is RIGHT WING IN DISGUISE.Why did he goto the Americans if he was a real Socialist and 2nd reason is why should they care anyway.
          Wrong people in the important roles that effect every body lives in this state.Surrounded by turn coats and traitors appears the political class in this country.Only appears to have ULA and Sinn Fein plus some left wing individuals who STANDING UP FOR THE CITIZENS AND THE COUNTRY AT LARGE.
          Funny the YES TO LISBON GROUPS are SO SILENT NOW with the EU running the show.

          • Colin

            Well, you know Gilmore’s missus received €500,000 for a small strip of land beside a Co Galway national school from the dept of education, to allow the school to expand a few years back. Now, if the Gilmores had a socialist bone in their bodies, they’d have donated that money to an education based charity, and publicly stated that, and demanded that others in similar fortunate situations who inherit land which must be bought by the state, to do the same.

            Labour simply represents Public Sector Unionised workers in the main, nothing more nothing less.

          • RE “Labour simply represents Public Sector Unionised workers in the main, nothing more nothing less.”

            I used to think that too before Labour betrayed the unions and Irish taxpayers in Government by supporting the banks!

            Labour = The Greens

  43. thirdeye

    It has always being remarked by more qualified people than myself that failure to recognize history events and you have a habit of repeating themselves.We have seen the for runner of the euro currency failure in an earlier guise in the late 1990s when the Uk left the ERM on Black Wednesday 1997.ONE SHOE FITS ALL APPROACH-DID NOT WORK THEN and it’s NOT WORKING NOW.Euro name mention was the ECU CURRENCY.
    Ireland success for the LATE 1990′S TO 2004 period in the so called Celtic Tiger Boom was the ability to devalue and have an interest rate in reality of MINUS 1%.We have NO CURRENCY or any key financial instruments to use NOW.We have seen Argentina but more recently iceland show us the way out of the present morass.We are KILLING our own prospects-both personally and future generations ability to succeed in the world in slavishly sticking to a policy LIKE the aforementioned ERM that will keep this country in RECESSION LONGER than any other state in that were DOING what were TOLD BY EUROPE.
    Strange thing in that Irish character is usually to IGNORE ADVICE given.
    We need the more PATRIOTIC DEFENSE as People’s in ICELAND,ARGENTINA,GREECE have shown we can only save our selves by LISTENING TO PEOPLE WHO have our NATIONAL INTERESTS at HEART.Present Government is made up of part of the main QUARTETTE OF TRAITORS of Fine Gael & LABOUR with Fianna Fail,GREENS in tow.EU is like the EUROVISION SONG CONTEST in that good for its day but like the EURO passed its sell by date and no longer relevant to the music of the world we inhabit today.Various governments since before 1973 and the supporting
    Media and other lobby groups like IBEC,CIF,Fremrs Groups,Foreign Multi national companies,and other pro europe experts in educational establishments in both Ireland and beyond our shores have all played their part in covering up or totally dismiss any real arguments on various EU treaties by accusing opponents of being NUT JOBS and ILLERATES.Fishering Industry and shoes and other industiries were sacrificed in order to gain access to new EEC markets of the day now the small farmers and west of Ireland has become the next lambs to the slaughter.Im not from a Country back ground but a Dublin Man.Lenihan has proven to be one of the latest in a long line of Quisling Ministers and RTE and other political main stream groups will be full of praise for a meber os the quartette of traitors who have ran this country into the ground.Who have illeagaly sold away of own fishing and natural resources to outside bodies and told un truths to the general public in reagrds to the EU/IMF bailout.One less of these quislings around is a good thing.LET THE PEOPLE RISE.Bring back the Punt and Out of Europe we can manage like Machiavelli example when the dynamics of the group do not suit you any more LEAVE and join something else if it suits your needs.We need a new awakening of the electorate and to spell out the TRUE consequences of Satying in the EU.Norway and Switzerland who are NON- EU Members do MORE TRADING WITH EU MEMBER STATES than IRELAND as a member state.Loss of FIsheries and financial consequencies has been noted by various interested parties to be nearly a financial LOSS from Eurostat an EU body estimated the Ireland of about 200 BILLION in Fish and Fish Processing since 1973.Dwafts the MONIES RECIEVED in various packages to Farming and other PRO EU LOBBY groups SILENCE ON EU- IMF BAILOUT IS DEAFENING.EU is a BAD DEAL for Ireland and TIME TO LEAVE like the EURO VISION SONG CONTEST its out of time.

    • Late 1990s when the Uk left the ERM…indeed it’s time to go before more serious irreparable damage is done than that done already.

      We now know there is no ‘bailout’. We know there is serious austerity ahead that will damage our economy further.

      We need to put our shoulders to the wheel and make the austerity sacrifices we know will benefit Irish taxpayers, not the coffers of Sheriff of Nottingham foreign bondholders intent on the extraction of penury from Irish citizens.

      • thirdeye

        We paying for the political ineptitude of the Irish and political elites and other associated acolytes grovelling to EU policy over the decades.WE MUST LEAVE the EU as were no better NOW then being back in the Uk as a Common Wealth Country as were now in the EU COMMON WEALTH.
        We-joined EEC we were EQUAL to other EUROPEAN NATIONS but, now a sub servant to the present EU rulers.Our Irish natural resources have been DELINQUIENT SQUANDERED by the various quartette of traitors parties of FF,FG,LAB,Greens to PROVE their EU credentials. Norway who stood firm and have BENEFITTED from their natural resources to be able to with stand the deluge of financial crisis.People are slowly coming to the conclusion I hope is VERY SOON that we cant keep cutting peoples wages and standards of living.
        Cutting of all areas of education,health, will make the recession LONGER,DEEPER & more SEVERE.EU-IMF deal in Greece will FAIL as the people are revolting on a daily basis unlike the majority of IRISH people are not out protesting in MASSIVE NUMBERS as we by our silence in protesting is given tacit approval for these policies being undertaking by a pro EU party Blue-shits-Labour who don’t rock the boat or question the validity of the EU-IMF approach at present.
        When we have examples of Argentina,ICELAND that there is other workable approaches.EU bank bail out approach will only end up hurting more the old ,sick and the poor a reminder of one of the Irish main political parties general election posters for one of the main Irish apologists Parties for EU policy.
        I find it amazing that the people today are appearing as like sheep and have no back bone.Either people feel Ok with this present government approach or it has not effected them as of yet.

        • We would be better off leaving the EMU and joining up with the six counties as part of a unified federalist republic of Ireland with 6% Corporation Tax. Then make a Commonwealth Alliance with the UK perhaps rejoining with Sterling. Or simply get out and go it alone. Right now we’re PIGS marching happily along to the abattoir. As regards ‘not effected them yet’, good point. But next budget taking out 3.6% will not be taking fat out of the economy, it will take out muscle. Expect the PENNY to drop then!

          • thirdeye

            We have seen the pigs is going to the abattoir but is this our way to the mytical party of FF we all partied or are we the rashers and sausages of this party.

      • Praetorian

        ‘We all partied’ probably isn’t the greatest of legacies. The eulogising is to be expected and is a salutary lesson in State propaganda.

        Of far greater importance are those who died needlessly because of lack of access to health care, the thousands left waiting on trollies, the score of people who caught the MRSA bug, those who will never get out poverty, those who will never get to university, those who remain long term unemployed, those who have permanently emigrated and all those who suffered as a result of Fianna Fail’s socio-economic policies. You will never see an hour long special dedicated to each of those fellow citizens.

        • You think that was bad, them were the good times!

          Good times ahead:

          http://yhoo.it/gvq0Xl

          • thirdeye

            Lenihan and his buddies partied due to inflated house and land prices and councillors with dodgy land deals and trubunerlas that took a the long way to get to the “truth” to put more money into the political monied class pockets while deneying proper public services to the majority of it citizens.Public were a fodder for political experiment in cutting access to various services and groups who needed help were left to their own devices.Legacy of ghost estates,bad infrastructure lack of internat access and clean healthy hospitals were infections were ripe and health scandals to booth with evading the turth of bailout talks to his own cabinet collegues if the freedom of information cabinet papers are to be believed.Strange that Cameron,Queen and Hauge in Ireland at the one time in Dublin and recent talk of North Ireland having the same Corporation tax as t] the republic appears that theirs something going on in the back ground as regards Sterling and EU wider mebership.Remember article online Der Spigel talk of Greek Bailout and denials by Europe of such rumors denied by appears WAS CORRECT with a NEW Greek bailout plus rumors of German re printing the German Mark may not be a fanciful as it seems.

        • thirdeye

          Totally agree but Fine Gael Labour are following the same solution as FF/Green/PD adgenda.Like the line from the Who song Dont get Fooled Again was MEET THE NEW BOSS ,SAME AS THE OLD BOSS ring’s true.Fine Gael,Croynism and Bailout and cuts in the LOWEST PAID WORKERS a RACE to the Bottom that even FAR EAST economies wont go.Ireland now the new EU SWEAT SHOP in curbing WORKERS RIGHT’S.This part of the EU Workers Directive.
          Political Class partied why the PUBLIC PAID THE BAR TAB.
          Need to Leave the EU were not Equals we may have stayed part of the UK at this rate,Certain groups have GAINED from EU membership but NOT the Ordinary Worker who CAR PRICES are DOUBLE the EU average.Screwed by everybody both at home and abroad.THIS HAS TO STOP NOW.

      • thirdeye

        People have put their shoulders to the proverbial wheel for a long time and like the Albert CVmus Book the Myth of where Sisyphus is forever rolling a giant boulder up a hill till the wait rolls and goes back down the hill as punishment fromt he gods.Our GODS of Franco German EU policy are treating us like Sisyphus so maybe its time we changed the rules as we wont roll the damn stone of bailout debt any more to the top of the hill.Let the stone rest and walk away and leave for someone else to move

  44. thirdeye

    A comment earlier was about Hitler.Hitler wanted a europe under Nazi control.Hitler wanted a United Europe al beit under Nazi cintrol.We have achieved a similar state in reality Run by the Germans for the Germans benefit without starting a war or invasion as using initially German Mark and Later Euro to set interest rate that always favout Germany First and Secondly France with Poodle Sackozy jumping to Frau Merkels orders.

  45. Tull McAdoo

    I had been reflecting on things over the last while, trying to come up with some proposal to ease Ireland’s position given that this Loan/ Repayment scheme seems to be accepted by the new Government ( in spite of their election rants).

    I know well, just as I am sure that David McWilliams knows that in order for things to happen in countries, there must be the “political will” there, in order to make it happen. I am an Economist and I know that over in Ireland Economists like David, Morgan Kelly, Karl Whelan et al have put forward their views and that they have been pretty much ignored.

    The present Government just like the previous incumbents of Leinster House seem to be relying on the same old wasters in the DoF, Ntma,Consultant buddies and so on. We know how woefully wrong that they have gotten things in the boom, bust and all times in between. Anyway forget about them gobshites we will just need to work around them.

    Given the above I decided to call one of my oldest friends to seek his council on these matters. I have included a link to an interview that he gave just before Christmas on the lateline programme down here in Oz for the ABC network , just to show that he is still as sharp as ever, including that mischievous smile. Some of you older posters may well remember his fondness for hand to hand combat in political debates, while some of his one liner’s have become the stuff of legend. I still laugh when I think of the time he told Pete Costello that he was all tip and no berg……

    Paul reckons that Ireland should push for some sort of “horizontal fiscal transfer” payment scheme similar to that used in Australia and Canada. This will bring about a level of equalisation between the various countries, and can even be sold as a supplement to the growth and stability pact that was being bandied about not so long ago.

    It should not prove to be inflationary to those who fear inflation. It should also assist the ECB in achieving “price stability” which is its primary concern as outlined in its “two-pillar” strategy for monetary and fiscal policy ( see ECB publications from 1998 to 2000)

    Anyway have a listen to Paul in the video (right side of page, click broadband or dial-up to suit your system), and while I know we are friends, the bastard does have a way of making bloody sense. No music tonight but take it away Paul Keating and thanks for your advice…..

    http://www.abc.net.au/lateline/content/2010/s3083382.htm

    • Hi Tull,

      imho, the China, India factor is the crux here, which of cause depends on more than China/India alone, but the way this tectonic shift of global political power is handled by the USA, and currently we can observe how this is handled in good old fashion.

      However, I would dare to disagree with Paul that China is not an expansion power, on the contrary.

      But let’s look at the equalization proposal, or in other words fiscal transfer. Effectively, this is one of EMU’s possible future scenarios, the transfer union. This however will stir nationalistic sentiments, which are already on the menu and constantly fed from the Joe Six pack media landscape to reputable economy research Institutions in Germany for example.

      Germany has, to a degree, implemented a form of horizontal fiscal equalization, and the ‘Laenderfinanzausgleich’, the equalization between the federal counties is a constant source of “war’ between the counties. In fact, beginning this year, three counties, Bayern, Hessen and Baden Wuertemberg, will go to the highest court in germany, the constitutional court and complain against the unjust handling of this equalization, the conclude, the unjust methods and calculations used on the lower levels of counties equally apply to the higher levels all the way up to the EU.

      Tull, without going into the details of the above example I bring this up for a good reason, rightly so you mentioned that political will is required.

      German tax law is one of the most blown up complicated and ridiculous in the entire world. This however doe snot mean it is good, Hell no, on the contrary! Imagine they would take the german and french tax laws as a basis for the desired EU tax…. House of Horrors is a Lullaby against the disaster that would unleashed, you can not use two dysfunctional systems mingle them together and expect to get a functional, plain crazy.

      Don’t get me wrong, in general the idea has a lot to go for, but in reality, I do not think we have a Eurozone,in political terms that is, we have a Egozone instead and here I see the biggest problem in deed and on top the political system in the EU is dominated by right wing neo liberal forces.

      But going back to your initial statement, the political will is the first step, and I would think, this will needs to be expressed by the people in Europe, and no longer the political class alone, they have proven to be corrupted to the very bone constantly undermining democratic principles.

      Way i see it, we are in the middle phase of this neo liberal social engineering, and currently, political will against it in EU is underrepresented, hence change can not come from within the political system, but the people instead.

      Best
      Georg

      @all:

      Bit of background on what Paul is talking about.

      http://www.treasury.act.gov.au/grants_commission/pdfs/Chapter_03.pdf

      • thirdeye

        Paul Keating’s view on the EU from afar was very interesting.German Finance Minister talking about another bailout of the Greeks and German and ECB disagree on the way forward.Are we looking at the break up of the EU and Euro currency countries as we have been before on Black Wednesday when the Uk left the fore runner currency arrangement ERM at the time.German public dislike of bailout of other member states and the euro itself with reports German shoppers and business only wishing to deal with German Euros and 60% of Germans in Dec 2010 want ed such a scenario.Maybe Germans want a new version of the Hanseatic League instead of City states but countries like scandinavian,dutch,french,germans form a new EU under the Euro and leave the other piigs and non euro counries out in the dark.2 speed europe appers closer every day.Maybe the other countires should ask is it worthwhile to stayat a party if your not getting any of the goodies on offer.

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