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.
Friends come and go. Enemies accumulate.
by Frank Schnittger - Feb 6 65 comments
by THE Twank - Feb 13 12 comments
by generic - Jan 30 7 comments
by Luis de Sousa - Feb 3 82 comments
by Zwackus - Feb 2 58 comments
by Drew J Jones - Jan 30 85 comments
by Gag Halfrunt - Jan 27 4 comments
by Frank Schnittger - Jan 28 13 comments
by THE Twank - Feb 1312 comments
by Frank Schnittger - Feb 665 comments
by Luis de Sousa - Feb 382 comments
by Zwackus - Feb 258 comments
by Drew J Jones - Feb 123 comments
by generic - Jan 307 comments
by Drew J Jones - Jan 3085 comments
by Frank Schnittger - Jan 2813 comments
by Gag Halfrunt - Jan 274 comments
by Frank Schnittger - Jan 2712 comments
by Frank Schnittger - Jan 2438 comments
by marco - Jan 2415 comments
by Frank Schnittger - Jan 2224 comments
by Drew J Jones - Jan 2134 comments
by Frank Schnittger - Jan 2111 comments
by Luis de Sousa - Jan 207 comments