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.
What exactly are you propagating here? Austrian economics?
The ECB should resolve those banks which are insolvent. That means reimbursing their depositors, up to the limit of the deposit guarantee (say, 20.000), and then attempting to recover whatever value can be recovered from their assets. Any value that can be recovered from their assets beyond what is needed to cover depositors is then paid out to their creditors, in order of seniority. The remaining creditors get to fuck off and die.
The ECB should lend at the discount window to those banks which are solvent. That does not involve taking on crap collateral. If the bank is not able to post collateral that is not crap, then it isn't solvent and should be resolved.
The Irish state should spend money in order to support demand and restore full employment. The ECB should support this policy by purchasing all newly issued Irish bonds at the ECB's policy rate of 1 %.
The Irish state should attempt to claw back the money that was unjustly paid out to the creditors of insolvent banks. To the extent that money was ever actually paid, this is going to be hard. But I'm betting that most of that money was never actually paid, in the sense of being moved from one reserve account at the ECB to another. I'm betting that most of the money "paid out" in the Irish bank bailout was actually just the Irish government buying the debts of Irish banks using newly issued Irish government bonds. In which case it is a matter of supreme simplicity to declare those bonds void. Bonds are numbered and notarised, after all.
The Irish state should not, under any circumstance, engage in austerity. Not now, not ever.
But what is actually happening is that the ECB is telling the Irish government that the ECB will not support a sane Irish recovery policy, because the ECB is concerned about the Irish national debt. Instead, the ECB will only refinance Ireland's existing national debt, and only if Ireland engages in certifiably insane macroeconomic policies.
The logical response to that - indeed the only sane response - is to say "well then, fuck the national debt." If there is no national debt, then there is no need to refinance, and then the ECB cannot impose its austerity insanity.
Friends come and go. Enemies accumulate.
That is the duty -please don't laugh - of the Irish bank regulators.
In other word of the people who allowed this whole problem to happen.
But instead of laying the problem at the foot of the Irish authorities, you like to blame others.
In fact, it does not even excuse the ECB from the first paragraph. Because the ECB has been lobbying for the banks to not be resolved since the first day of this crisis. The ECB decided to be a part of the problem, where it could have been a part of the solution.
by Frank Schnittger - Jul 19 16 comments
by ARGeezer - Jul 22 11 comments
by Frank Schnittger - Jul 14 49 comments
by epochepoque - Jul 14 20 comments
by ARGeezer - Jul 12 35 comments
by gmoke - Jul 15 4 comments
by epochepoque - Jul 11 39 comments
by Frank Schnittger - Jul 7 5 comments
by aquilon - Jul 24
by ARGeezer - Jul 2211 comments
by Frank Schnittger - Jul 1916 comments
by gmoke - Jul 154 comments
by epochepoque - Jul 1420 comments
by Frank Schnittger - Jul 1449 comments
by ARGeezer - Jul 1235 comments
by Frank Schnittger - Jul 128 comments
by ARGeezer - Jul 1255 comments
by epochepoque - Jul 1139 comments
by Frank Schnittger - Jul 812 comments
by Frank Schnittger - Jul 75 comments
by Frank Schnittger - Jul 562 comments
by rifek - Jun 2791 comments
by Frank Schnittger - Jun 2768 comments
by Bernard - Jun 2655 comments
by Migeru - Jun 2667 comments
by Frank Schnittger - Jun 25107 comments
by Frank Schnittger - Jun 2472 comments