The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
Equality before the law is sacred. So a default or partial default has to treat all bond-holders of the Irish state the same way.
This conclusion does not follow from that premise.
Repudiating the bank guarantee is no more a violation of the principle of equality before the law than issuing that guarantee - of the private debts of a subset of private companies (I didn't see any guarantee of Irish manufacturing firms' debts, even though that would have lowered their cost of funding, which would have provided a real economic benefit).
I mentioned the 100 billion owned by Irish banks to the ECB. That is not a hedgefund. Nor even really foreign.
It shouldn't act like a hedge fund, and it shouldn't act like a foreign entity.
Yet it does.
If it didn't behave like a foreign hedge fund, there would be no real need to default on it. If it behaved like a proper central bank, it would keep rolling over that position indefinitely, because that's what central banks do with sovereign debt positions as a matter of course.
And the considerable sums that the Irish governments already put in the banks is a fact too.
No. They're a promise. Unless ECB reserves have been moved from the Irish reserve account to the bank's reserve account, no transaction has taken place which cannot be undone by legislative fiat.
I think that is offered here is a illusion. Bankruptcy without the pains of bankruptcy.
The macroeconomics of sovereign states is funny that way. Sometimes the ordinary citizen really can avoid the pain by shafting obviously evil people like Goldman Sachs or Deutche Bank. Sometimes they can't, of course. Greece will feel pain, to a greater or lesser extent (default means less pain than AusterityTM, but there will be pain). Ireland, with its strong trade surplus, does not need to feel pain. The pain is a political choice.
Austerity can only be implemented in the shadow of a concentration camp.
by Migeru - Jul 24 4 comments
by gmoke - Jul 27 1 comment
by Frank Schnittger - Jul 25 14 comments
by Frank Schnittger - Jul 26 167 comments
by afew - Jul 21 17 comments
by Oui - Jul 28
by gmoke - Jul 21 6 comments
by Oui - Jul 24 2 comments
by Oui - Jul 28
by gmoke - Jul 271 comment
by Oui - Jul 261 comment
by Frank Schnittger - Jul 26167 comments
by Oui - Jul 255 comments
by Frank Schnittger - Jul 2514 comments
by Oui - Jul 242 comments
by Migeru - Jul 244 comments
by Migeru - Jul 2464 comments
by Oui - Jul 237 comments
by gmoke - Jul 216 comments
by afew - Jul 2117 comments
by Oui - Jul 194 comments
by Frank Schnittger - Jul 1661 comments
by Oui - Jul 623 comments
by Oui - Jul 41 comment
by afew - Jul 248 comments
by gmoke - Jul 15 comments
by Oui - Jul 17 comments
by Frank Schnittger - Jun 3055 comments