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.
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.
by Frank Schnittger - Feb 6 66 comments
by THE Twank - Feb 13 14 comments
by generic - Jan 30 7 comments
by Luis de Sousa - Feb 3 83 comments
by Zwackus - Feb 2 58 comments
by Drew J Jones - Jan 30 85 comments
by Gag Halfrunt - Jan 27 4 comments
by THE Twank - Feb 20
by THE Twank - Feb 1314 comments
by Frank Schnittger - Feb 666 comments
by Luis de Sousa - Feb 383 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