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God, how sloppy, if not more. Let me take a hand:

German lenders hold more than 600 billion euros of debt issued by the governments of Greece, Ireland, Portugal and the United States.

Including Italy in the PIIGS is a invention of the neoliberal anglo business press anyway.

by IM on Sun Feb 6th, 2011 at 12:09:44 PM EST
[ Parent ]
Okay, let me try again.

Eurointelligence: Is Ireland Solvent (Wolfgang Münchau and Raphael Cottin, 24.11.2010)

In the long run Ireland is probably insolvent. Portugal is in a very similar position, perhaps even worse, because of structural problems that might hinder economic growth.

But in the short run, the show will go on. The readiness by the other Europeans to bail out Ireland is easily explained. The exposures by EU banks to Ireland, Greece and Portugal are massive. ...

Ireland is in a different league than the others. Unlike Portugal, Ireland could bring the house down, and that will still be the case, once Ireland's insolvency is fully realised and understood. A breakdown by countries shows that Germany and the UK are most exposed to Ireland, Spain to Portugal, and France to Greece. If the periphery goes, the European banking system will have its own subprime crisis - in addition to the actual subprime crisis.

Where are we headed now? There will be no immediate default. Ireland, and also Portugal, will come under the umbrella of the EFSF. Spain is more solid, but also highly vulnerable to a financial market squeeze. I would expect the EU to step in should Spain come under pressure. That could be through a series of bilateral programmes, or more likely an increase in the lending ceilings of the EFSF. The likelihood of such an event would be hard to predict. I would expect Spain to be ok, but Spain, too, needs to return to some solid growth.

The source of the data is the Bank for International Settlements.

There you go, as of the latest data available on November 24, the exposure of German banks to Ireland was of the order of €120bn.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Feb 6th, 2011 at 12:42:17 PM EST
[ Parent ]
120 bn total exposure is not the same as 120 bn exposure to government debt.

And if we follow the money, it seems to be british-german belgian conspiracy against Ireland.

by IM on Sun Feb 6th, 2011 at 02:34:12 PM EST
[ Parent ]
I can't see your goalposts any more, can you stop moving them?

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 6th, 2011 at 03:05:35 PM EST
[ Parent ]
But you are moving the goalposts. You are taking total exposure as if it is exposure to government debt. It isn't. The second number is smaller, probably much smaller. I never claimed there is no exposure at all. I just deny that all irish debt is public debt - private debt is rather larger and that all Irish debt is to german banks; the exposure to british banks alone is larger.

Also, most of this is Depfa/HRE anyway and this bank is already nationalised.  

by IM on Sun Feb 6th, 2011 at 04:02:45 PM EST
[ Parent ]
Also, most of this is Depfa/HRE anyway and this bank is already nationalised.

The fact that the German government has taken leave of its senses and bailed out German banks does not mean that Ireland has to compound the mistake by bailing out the German government. If the German government wants a bailout, the proper place to argue that is at the ECB, which controls the printing presses. The printing press is where governments go to get bailouts in normally functioning fiat monetary systems.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 6th, 2011 at 06:43:07 PM EST
[ Parent ]
120 bn total exposure is not the same as 120 bn exposure to government debt.

Why yes, yes it is, since Ireland took leave of its senses and bailed out their own banks, that's precisely what it is. Unless you are in the minority that believes that Ireland has a single solvent bank left with overseas liabilities. In which case I have a "competitiveness" reform to sell you.

It's this bailout that the "Irish rescue" - at usurious 5.7 % interest - is now trying to prevent from collapsing (as it should by any right).

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 6th, 2011 at 06:40:05 PM EST
[ Parent ]
Which is the best argument around that events are being driven by the very short-sighted German domestic political concerns of Angela Merkel and not by economic understanding or financial prudence of any sort. Given the situation and given the extraordinary willingness of the Irish government to attempt to swallow the whale of debt they have assumed, one would think that the governments whose banks are counter-parties to Irish debt would be more than happy to make loans available at zero percent and see how much of the whale Ireland could swallow. But no! They want to make 5.7% interest on the loan! They may as well drop a 20 megaton bomb on Dublin for all the good this will do in helping Ireland to attempt the impossible.  

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 6th, 2011 at 10:44:40 PM EST
[ Parent ]
I would suspect that most of the private debt owed to German banks is either owed by Irish banks or by  private individuals who are basically in slow-motion bankruptcy.

The IFSC complicates matters, in that some of the debt might be owed to branches of German banks there, for instance.

by Colman (colman at eurotrib.com) on Mon Feb 7th, 2011 at 10:18:01 AM EST
[ Parent ]

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