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.
Austerity can only be implemented in the shadow of a concentration camp.
by epochepoque - Mar 7 10 comments
by Cyrille - Mar 8 1 comment
by afew - Mar 7 34 comments
by aquilon - Mar 10 4 comments
by DoDo - Mar 10 14 comments
by ARGeezer - Mar 10 5 comments
by marco - Mar 3 43 comments
by maracatu - Feb 25 13 comments
by ARGeezer - Mar 105 comments
by aquilon - Mar 104 comments
by DoDo - Mar 1014 comments
by Cyrille - Mar 81 comment
by epochepoque - Mar 710 comments
by afew - Mar 734 comments
by Oui - Mar 560 comments
by Oui - Mar 413 comments
by marco - Mar 343 comments
by vbo - Mar 123 comments
by Oui - Mar 11 comment
by Oui - Mar 13 comments
by Metatone - Feb 287 comments
by vbo - Feb 27110 comments
by gmoke - Feb 263 comments
by vbo - Feb 25102 comments
by maracatu - Feb 2513 comments
by Oui - Feb 2432 comments
by Oui - Feb 2214 comments
by Oui - Feb 211 comment