Euro Area

[gaelic cowboy]

The Euro is going down the tubes; discuss.

The problem is the inability to admit the debt must be reneged on, it really is as simple as that.

[Philippus Flavius Homovallumus]

The problem is the inability to admit the debt must be reneged on, it really is as simple as that.

That is because of the gulf between the political aspiration of "Europe" and the political reality. The EU government and the ECB want to act like they are the US Federal Government and Federal Reserve, but they can't so they are doing a sort of twister-limbo-jenga to try and prevent default.

What is really being decided is whether or nor Ireland shall be sacrificed for political expediency.

[gaelic cowboy]

That is because of the gulf between the political aspiration of "Europe" and the political reality. The EU government and the ECB want to act like they are the US Federal Government and Federal Reserve, but they can't so they are doing a sort of twister-limbo-jenga to try and prevent default.

What is really being decided is whether or nor Ireland shall be sacrificed for political expediency.

Except the problem is sacrifice does not stop the Debt Monster and they know it.

[Greyblades]

Oh I dont know, sacrificing apendages is a rather... effective way of paying debts. But then again I've been watching alot of gangster movies.

[Brenus]

“Except the problem is sacrifice does not stop the Debt Monster and they know it.”

No.
There are others solutions.

Let say the Governments wouldn’t back up the banks with taxes-payers money, take the political action to cancelled the obligation to Countries to borrow money to the private Sector (because without our money the banksters wouldn’t be able to lend it any way) and allow Countries to borrow money at the same rate than the banks to the European Central Bank (near 0%) instead to go under the yoke of the so-called independent judgment of the same banksters who ruined all economies…

I still don’t get why the banks borrow money at 0 % and lend it at a minimum of 14.5% to customers…

The banks collapsed, the money saved in not helping them could have be used as safety net for the usual customers, or/and in order to preserve the economies, could have been use in exempting the workers for paying taxes for one year.
Workers would have either pay their debts (reinforcing the surviving banks) or use it for their need, keeping the market alive and paying indirect taxes…
Then of course, the people who lost money would suit the banksters as they lied to them, claiming huge bonuses under at least false pretences but I would say frauds.
Banksters should have been trial, put in jail, and as you can’t keep the money illegally earned, the bonuses would returned to the banks to help them to pay back their debts.

To deny a debt is possible. That was done before. After the Revolution, the Soviets decided that the money borrowed by the Tsar was not USSR debts as it was a different country…
Well, harsh, but it worked. No more debts…

The problem of course is that would ruin some of the governments’ friends, families and relatives…

In term of Euro, I don’t think it will collapse. The alternative is o put back the national currencies? It took 6 years of preparation to put the Euro (printing, rating etc) on track. So, to go back is not the solution… And I do like the idea that SWIFT doesn’t take money for transfer in doing absolutely nothing….

[Furunculus]

So you are saying that you are European but not EUropean and you don't want to be EUropean. That's perfectly fine. The problem is that you and a few others maintain that you don't want to be EUropean because you aren't European. That's where the confusion comes from...

my political identity is british, nothing else.

i consider myself part of the british polity, and consent to be governed by those elected from among my British peers because of knowledge that this governance will be conducted in a manner that is both predictable and acceptable to myself, as a result of a shared social and cultural history.

this would very much be a majority view in Britain, therefore it can be stated with some confidence that 'we' are not EUropean in the political sense, whilst respecting that we exist in geographic mass of europe, and thus have a history of constant interaction with our neighbours. the key point here is that they are "neighbours", and friendly ones at that, but not "family".

the belgians have a very poorly developed sense of nationhood arising from their history, and even in their desire for partition look to the EU to make up any deficit in security or governance. they therefore can be said to be EUropean in the political sense, in that they hold themselves to be part of a european polity.

it really is that simple. what is not to understand?

[Furunculus]

apparently for every $10 over $100 the price of oil climbs it will reduce economic growth, post recession, by 0.5% of GDP.

how is the ME crisis going to affect the vulnerable euro nations like greece?

http://www.spiegel.de/international/...746957,00.html

[Philippus Flavius Homovallumus]

Torygraph: http://www.telegraph.co.uk/news/worl...e-with-EU.html

Lovely quote:

A European diplomat, from a large eurozone country, told The Sunday Telegraph that "the more the Irish make a big deal about renegotiation in public, the more attitudes will harden".
"It is not even take it or leave it. It's done. Ireland's only role in this now is to implement the programme agreed with the EU, IMF and European Central Bank. Irish voters are not a party in this process, whatever they have been told," said the diplomat.

I'll say it again, if the EU does not enfranchise the peoples of member states and stop acting like the Roman Empire it will fracture, and the harder it tries to hold it all together the more likely the end will be bloody.

[Louis VI the Fat]

That article is from another fantasy world, where nothing is what it seems. I don't even know where to begin with pointing out all the fundamentally erroneous assumptions in there.


Let me suffice to say that I violently disagree with the Telegraph. It is not up to Europe to decide the political procedure in Ireland. Ireland must do this itself. Therefore the EU does not decide that any Irish government may or may represent the will of the Irish people, depending on the EU's mood. Rather, the Irish government is always assumed to act as an independent representive of the will of the Irish people. With this assumption agreements are made with Ireland.

This, and not a fantasy EUSSR/Mordor/Roman Empire/Whore of Babylon, is the reason why European governments can reach agreements with Irish governments and expect Ireland to be true to its word. It is what democracies do. Like responsible citizens, they can be relied upon that their word is worth more than the paper it is written on.


Which is not to say that I am convinced the Irish people have received a fair deal. But don't blame us. Europe merely lends Ireland money. The bank bailout was the work of the corrupt Irish politicians. The culmination of a near decade of mismanagement. They loved it when the value of their second homes kept going up and taxes were abolished for the rich and the foreign. Then the pyramid collapsed. Sadly, it is the poor who have to foot the bill, while those who profited get off scott free.

[Louis VI the Fat]

By THOMAS L. FRIEDMAN
Published: July 1, 2005

Dublin

There is a huge debate roiling in Europe today over which economic model to follow: the Franco-German shorter-workweek-six-weeks'-vacation-never-fire-anyone-but-high-unemployment social model or the less protected but more innovative, high-employment Anglo-Saxon model preferred by Britain, Ireland and Eastern Europe. It is obvious to me that the Irish-British model is the way of the future, and the only question is when Germany and France will face reality: either they become Ireland or they become museums. That is their real choice over the next few years - it's either the leprechaun way or the Louvre.


Germany and France are trying to protect their welfare capitalism with defense. Ireland is generating its own sustainable model of social capitalism by playing offense. I'll bet on the offense.

http://www.nytimes.com/2005/07/01/op...dman.html?_r=1

[InsaneApache]

I'll give the Euro six months. Tops.

[Louis VI the Fat]

I'll give the Euro six months. Tops.

It's monday already your weekend's recreational drugs should've worn off by now.

[Philippus Flavius Homovallumus]

That article is from another fantasy world, where nothing is what it seems. I don't even know where to begin with pointing out all the fundamentally erroneous assumptions in there.


Let me suffice to say that I violently disagree with the Telegraph. It is not up to Europe to decide the political procedure in Ireland. Ireland must do this itself. Therefore the EU does not decide that any Irish government may or may represent the will of the Irish people, depending on the EU's mood. Rather, the Irish government is always assumed to act as an independent representive of the will of the Irish people. With this assumption agreements are made with Ireland.

This, and not a fantasy EUSSR/Mordor/Roman Empire/Whore of Babylon, is the reason why European governments can reach agreements with Irish governments and expect Ireland to be true to its word. It is what democracies do. Like responsible citizens, they can be relied upon that their word is worth more than the paper it is written on.


Which is not to say that I am convinced the Irish people have received a fair deal. But don't blame us. Europe merely lends Ireland money. The bank bailout was the work of the corrupt Irish politicians. The culmination of a near decade of mismanagement. They loved it when the value of their second homes kept going up and taxes were abolished for the rich and the foreign. Then the pyramid collapsed. Sadly, it is the poor who have to foot the bill, while those who profited get off scott free.

Take another look at what I quoted Loius. If a diplomat went on record with that it probably means he doesn't think it's very explosive, or important, but the tone is one of dismissal of the "Irish People". There are far more diplomatic ways of saying the deal is final, but he didn't bother.

[InsaneApache]

It's monday already your weekend's recreational drugs should've worn off by now.

No, not yet. Been a long weekend.

ATHENS, Greece -- They blockade highway toll booths to give drivers free passage. They cover subway ticket machines with plastic bags so commuters can't pay. Even doctors are joining in, preventing patients from paying fees at state hospitals

http://www.forbes.com/feeds/ap/2011/...y_8319311.html

[Ronin]

http://www.forbes.com/feeds/ap/2011/...y_8319311.html

how did that quote go about keep doing the same thing and expecting different results???

[Beskar]

my political identity is british, nothing else.

i consider myself part of the british polity, and consent to be governed by those elected from among my British peers because of knowledge that this governance will be conducted in a manner that is both predictable and acceptable to myself, as a result of a shared social and cultural history.

this would very much be a majority view in Britain, therefore it can be stated with some confidence that 'we' are not EUropean in the political sense, whilst respecting that we exist in geographic mass of europe, and thus have a history of constant interaction with our neighbours. the key point here is that they are "neighbours", and friendly ones at that, but not "family".

the belgians have a very poorly developed sense of nationhood arising from their history, and even in their desire for partition look to the EU to make up any deficit in security or governance. they therefore can be said to be EUropean in the political sense, in that they hold themselves to be part of a european polity.

it really is that simple. what is not to understand?

My political identity is a free citizen of Earth known as human. For taxation and birth purposes, I am classified as British.

I consider myself unrepresented, as the government does not reflect my needs or views, except on rare occasions where I praise them for doing so. The government is a compromise brought about people who hold the 'party' above shared values, and a party who own interests and the interests of their supporters are undertaken, at the cost of a greater shared interest.

I see a democratic European con/federation as being a stepping stone to a United Federation of Nations, which is a democracy global sovereignty spanning all continents to the four corners of the globe.

[Louis VI the Fat]

Take another look at what I quoted Loius. If a diplomat went on record with that it probably means he doesn't think it's very explosive, or important, but the tone is one of dismissal of the "Irish People". There are far more diplomatic ways of saying the deal is final, but he didn't bother.

Well...

Firstly, does the 'anonymous diplomat' really exist? My money's on this, as per usual, not even being the case.
Secondly, if he exists at all, is he paraphrased? A diplomat is not in the business of feeding the British yellow press quotes to get outraged about. That is the business of reporters and editors. It is not all that difficult to quote somebody (somewhat) correctly while changing the tone and actual message on its head.

Why is the diplomat not named? Why is not even his country named? The 'diplomat from a large eurozone country' is merely stating obvious EU/British/IMF policy, so why the need of anonimity?


I don't think this diplomat even exists. Not that it matter much. The quote, if presented normally, is not harsh at all. The 'diplomat' merely states the obvious: democracies are true to their word. One government upholds the obligations of the previous ones. Whether dealing with corporations, natural persons, or governments, the principle is that agreements are upheld. This is the heart of high trust societies, of international cooperation, of internal rule of law.



One question in return: the UK is one of the largest foreign lenders of the Irish bailout. Does this mean that Britain is imposing a dictatorial rule on Ireland? Is the UK acting like the Roman Empire? Will there be blood?

[gaelic cowboy]

One government upholds the obligations of the previous ones. Whether dealing with corporations, natural persons, or governments, the principle is that agreements are upheld. This is the heart of high trust societies, of international cooperation, of internal rule of law.

We dont consider Fianna Fail to have being a government worthy of the name they should have called the election two yrs ago when the whole thing went bang they had no legitimacy to land us in the bailout.

Fine Gael will be rengoitaiting the Knockout I wont deign to call it a bailout, specifically the interest rate will have to come down.

[InsaneApache]

Originally Posted by Louis VI the Fat
One government upholds the obligations of the previous ones. Whether dealing with corporations, natural persons, or governments, the principle is that agreements are upheld. This is the heart of high trust societies, of international cooperation, of internal rule of law.

So you don't subscribe to the theory that a lawfully elected parliament cannot be bound by it's predecessors?

[Louis VI the Fat]

So you don't subscribe to the theory that a lawfully elected parliament cannot be bound by it's predecessors?

It can not be bound unconditionally anymore than a person can sell himself into slavery.


For all practical purposes, however, a state is bound by its own treaties, laws, obligations, regardless of whether the current or previous paliament entered them.

[Louis VI the Fat]

We dont consider Fianna Fail to have being a government worthy of the name they should have called the election two yrs ago when the whole thing went bang they had no legitimacy to land us in the bailout.

Fine Gael will be rengoitaiting the Knockout I wont deign to call it a bailout, specifically the interest rate will have to come down.

It's not that the deal couldn't or shouldn't be renegotiated.

The working Irish got the *underground vertical passageway*. However, what ought to be renegotiated then is the Irish banking bailout itself, not the foreign loan to pay for this banking bailout. Sadly, this is an internal Irish affair.

If the banking bailout remains, but the EU-IMF bailout were to be renegotiated with more favourable conditions, then it is the European poor who have to pay for Ireland's rich, instead of the Irish poor. This should be out of the question. Europe has suffered enough financial damage from the irresponsible, corrupt Irish croonies. It is up to Ireland to clean ship internally, not up to Europe to keep footing the bill.


Ireland knows just how to get very favourable conditions instantly: sinmply end the scandalous Irish 'beggar thy neighbour' tax policy.

Google made twelve billion euro in Europe last year. If located in Germany or France, Google would have had to pay four billion in corporate taxes. However, Google is located in Ireland, where it pays only 28 million a year, on their entire European business.
That's four billion a year in tax handouts by the Irish government. There are more companies like this. It all puts the 86 billion in EU-IMF balout in perspective. Pocket change.

Ireland voluntarily chooses to have the Irish poor foot the bill for rich foreigners, rather than let rich foreigners pay for rich foreigners. The EU dearly wants to see that reversed, to have the culprits pay for their own mess, instead of passing on the buck to the Irish poor. What Europe will not do, is to bend over and take it up the rear just like what Dublin has done to poor Irishmen.

This is not about Irleand vs the EU. This is about who foots the bill for the bailout - the Irish taxpayer, or the European taxpayer, or those who received the profits. As we all know, it will frustratingly not be the third option - Ireland won't have it. It will not be the second option either - Europe won't have that. So the Irish poor it is and the Irish poor it will remain.

[gaelic cowboy]

The working Irish got the *underground vertical passageway*. However, what ought to be renegotiated then is the Irish banking bailout itself, not the foreign loan to pay for this banking bailout. Sadly, this is an internal Irish affair.

If the banking bailout remains, but the EU-IMF bailout were to be renegotiated with more favourable conditions, then it is the European poor who have to pay for Ireland's rich, instead of the Irish poor. This should be out of the question. Europe has suffered enough financial damage from the irresponsible, corrupt Irish croonies. It is up to Ireland to clean ship internally, not up to Europe to keep footing the bill.

The banking bailout is direct from the ECB I explained that ages ago, Trichet specifically ordered no banking failure in Ireland.

Basically in an effort to prevent contagion at the time of the deal Ireland was specifically leaked against by ECB officials, intense pressure was put on the government to take the deal interestingly the blanket garauntee was supported by the EU when it came time for renewal so that the banks could be bailed out.

[Furunculus]

Trichet specifically ordered no banking failure in Ireland.

Basically in an effort to prevent contagion at the time of the deal Ireland was specifically leaked against by ECB officials, intense pressure was put on the government to take the deal

absolutely right.

[Philippus Flavius Homovallumus]

One question in return: the UK is one of the largest foreign lenders of the Irish bailout. Does this mean that Britain is imposing a dictatorial rule on Ireland? Is the UK acting like the Roman Empire? Will there be blood?

Isn't Britain lending a large portion of that independantly at a lower rate, and isn't the rest money pledged by Alistair Darling after our own election?

Hmmmm, I think it is.

[gaelic cowboy]

Plus the largest foreign lender is actually Japan.

[Louis VI the Fat]

But if Japan and the UK are such large lenders, then how is this the work of the evil Eurozone Roman Empire?

And does this mean that the 'blood in the coming uprising against the Roman Empire' means the Irish will fight Japan?



I'm not being obtuse, I'm just trying to understand the great political theories of anti-Europeanism.

[Furunculus]

But if Japan and the UK are such large lenders, then how is this the work of the evil Eurozone Roman Empire?

And does this mean that the 'blood in the coming uprising against the Roman Empire' means the Irish will fight Japan?



I'm not being obtuse, I'm just trying to understand the great political theories of anti-Europeanism.

GC has already told you, german speculation from within the ECB speculated publicly on the future viability of ireland, thus undermining market confidence in ireland at a critical point in euro-wobbliness. thereby forcing a crippling bail-out package on a nation that didn't need it in order to halt speculation on other weak eurozone nations.

[Louis VI the Fat]

GC has already told you, german speculation from within the ECB speculated publicly on the future viability of ireland, thus undermining market confidence in ireland at a critical point in euro-wobbliness. thereby forcing a crippling bail-out package on a nation that didn't need it in order to halt speculation on other weak eurozone nations.

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.

Bailout fever: Ireland guarantees all bank deposits, debts

September 30, 2008

After Congress voted down the administration's financial-system rescue plan Monday, European governments today were busy committing more public funds to save their own banks.

The biggest surprise: The Irish government guaranteed all deposits and debts of the country's major banks, one day after the Irish stock market plummeted 13%, nearly twice the decline of the Dow Jones industrials.

"We have to create confidence," Finance Minister Brian Lenihan said on RTE Radio, according to Bloomberg News. "We can't bail out a particular bank. That wouldn't be right. What we have decided to do is give a general guarantee that the banks can lend in security and safety."

Banks worldwide have cut off lending to one another as the credit crisis has deepened. Ireland’s guarantee may give its banks a better chance of getting funding in money markets.

http://latimesblogs.latimes.com/mone...-congress.html

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.

[Furunculus]

i watched those glib comments made at the time, and at the time i knew they were stupid and foolish, and at the time i knew why german officials made them.

nothing you have said changes those facts as i understand them.

[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.