Euro Area

[gaelic cowboy]

You mean a few sentences by some Germans decide Irish policy?

Nah.


What happened, is that Ireland became the playground for international ultra-capitalism. Ultra-capitalism, that is 21st century capitalism where the market has been abolished in favour of the state as the subject and instrument of corporate power. Way back in mid-2008, before any German could point out Ireland on a map, Dublin decided to give a blanket guarantee. This Dublin did because of, firstly, the narrowness of the Irish elite - the captains of industry, of finance, are the same as the people in the government. Secondly, because ultra-capitalism had come to be identified with the Irish economic succes and this had led to the idea that what is good for corporations, is the common good of Ireland. And thirdly, rank stupidity, shortsightendness, and the idea that the Irish pyramid schemes would go on forever.


This is where it all went wrong. Way back in 2008. Way back when Ireland was the first to give a blanket guarantee, long before any other country had even considered using public funds to guarantee private speculation.


The bail-out package isn't crippling. It is pocket change, fifty percent of Irish GDP. Crippling is the banking guarantee, which is 300% of GDP. The latter is of Irish own making. The former is meant to aid Ireland and to prevent Irish greed and policy failures from undermining well-governed countries. It is not Europe which stole the money from the Irish poor to hand it over to the ultra-wealthy. Europe will, however, give Ireland a very lenient rescue package. On one condition. This is, that Ireland stops being an extraordinarly poor partner and ends its 'beggar thy neigbour' tax haven policy. As long as Dublin refuses to levy a corporate tax, Europe's working classes should not have to compensate for this. Europe's poor are not going to stand for being mistreated in the same manner as Dublin mistreats its own poor.

Entire diatribe is contructed nicely but incorrect in general.


I have lost count of the times I have mentioned this blanket guarantee was cooked up by the Government and the ECB as a method to prevent another Lehmans. The hit to interbank lending would have been bad across the eurozone, hence we now see the reason for Merkels comments on unsecured debt haircuts.

The problem is it was the right comment at the wrong time, allied with extra losses in the banks here the market people drove the bank bonds above 7% ending pretty much all market funding. This meant of course that the private losses would soon have to be transferred to the sovereign in order to actually bail the banks out.

It's not working so it has to change and soon prob before end of the month I would say, the unsecured debt will have to be cut or the holders of the paper will possibly be forced to take equity shares in the banks in question, also the interest rate will have to come down or the Eurozone WILL have a debt default and nobody knows where that might end hence the massive fear of it.


This bailout is not about saving Ireland it is about saving greedy banks both Irish and European from collapsing and thus hurting the EU dream of a common currency, the problem is there all living in a echo chamber where the idea seems to be to transfer private losses to the taxpayer of Ireland and German so they can all pretend they are fixing the problem.