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A default is the unilateral imposition of ANY change to the terms agreed upon in the loan document that are to the detriment of the creditor. This happens all the time. When the USA unilaterally ceased to redeem Federal Reserve Silver Certificate currency in 1971 that was a default. In the last two years China has unilaterally refused to honor obligations on futures contracts, claiming that the market had been manipulated. Both of these are examples of sovereign default.

A vigorous investigation of the relations and cash flows between FF ministers and TDs in the years leading up to the infamous government guarantee of the Irish bank's bad bets will almost certainly turn up some legal violations. This can be the basis for repudiation of the debt as odious debt. Then all obligations that flowed from that source would be up for renegotiation on terms much more favorable to Ireland.

The German people don't want to "bail out" peripheral nations even when it was recklessness and bad behavior by German banks that led to the debt. The Irish should be similarly adamant that they will not bail out German or British banks for making bad loans to Irish banks believing (correctly) that they would be bailed out by the Irish Government and people when the loans went bad.

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 Fri Feb 4th, 2011 at 11:06:57 AM EST
[ Parent ]
But waht about the loans to the irish government?
by IM on Fri Feb 4th, 2011 at 11:17:40 AM EST
[ Parent ]
Allegedly the Irish government claimed to be cash-funded until mid 2011.

Of course we don't know the actual figures, but they weren't planning to issue any new government bonds until then.

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 Fri Feb 4th, 2011 at 11:25:50 AM EST
[ Parent ]
Same deal. If the original bailout wasn't legal, the government debt isn't binding. Putting Cowen in jail would help make that point.

If the UK etc didn't practice due diligence in assessing the creditworthiness of the Irish government when there were obviously questionable deals happening - and no one sane is going to argue that taking on the private debt was a necessity - the foreign banks shouldn't be surprised by a haircut.

Of course they were loan sharking and profiteering. So sympathy will be in short supply.

Internationally, they can't do much to a sovereign state except kick Ireland out of the Euro - which will be threatened, but isn't likely in practice - and refuses to lend in future.

As Jake says, their idea of future times out after 18 months or so, as Argentina, Russia, Iceland and others have proven already.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Feb 4th, 2011 at 11:27:23 AM EST
[ Parent ]
Look, Cowen wasn't a dictator. They also had a dail decision.  
by IM on Fri Feb 4th, 2011 at 11:46:58 AM EST
[ Parent ]
Odious debts have odious debtors
But. Odious debts don't just happen to happen from time to time. Somebody has to agree to borrow the money.

So it is clearly a necessary (but not necessarily sufficient) condition for repudiating debt as odious that somebody in the defaulting country goes to prison. In the case of countries emerging from colonial or otherwise repressive governments, it is fairly simple to tell who needs to go to prison: The dictator or colonial magistrate, sometimes his family, usually a number of military people too.

In the case of a country that has been shock therapied by the IMF, it is less clear who needs to go to prison. But the people who precipitated the crisis that caused the IMF to bail out foreign lenders seem like good candidates. And the politicians who signed up for the IMF programme should arguably serve some time too.



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 Fri Feb 4th, 2011 at 11:50:15 AM EST
[ Parent ]
to this thread, and - again circumstantial evidence - you seem to be a bond-holder in defense of his/her 'asset'.

You mention lack-of-evidence/data at one point. There's plenty offered, but I would ask, where's yours? All that I read is something to the effect that a bond is sacred.

As pointed out, re-negotiations due to conditions - present or past - are common among the 'players'. The Russian experience is also instructive, because it demonstrates that the mental toughness of leadership and the size of the economic entity play an important role. Ireland is small; therefore, it can be bullied - even though, as pointed out, it's real economy (manufacturing) is still healthy.

It seems to me that your running commentary goes nowhere and adds nothing to the original point of JakeS' article, which was to formulate an OpEd. For that, folks, I'd say that the original diary, minus references to JakeS' correspondent and gratuitous sarcasms, would work very well. Can we get a draft? Will ET 'editors' sign on?

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Fri Feb 4th, 2011 at 12:37:20 PM EST
[ Parent ]
God no. I am anything else.

A bond is not sacred. 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. The strategy outlined here - let the wrong type of creditors bleed -can't work.

I mentioned the 100 billion owned by Irish banks to the ECB. That is not a hedgefund. Nor even really foreign. And the considerable sums that the Irish governments already put in the banks is a fact too.

I think that is offered here is a illusion. Bankruptcy without the pains of bankruptcy. Make the foreign evils pay.

The problem in Ireland is the neoliberal policy of the last irish governments, supported by a substantial part of the Irish voters. The mentality now - we will keep the mansion but shed the debt is not real helpful.  

by IM on Fri Feb 4th, 2011 at 01:04:19 PM EST
[ Parent ]
The 100 billion lent by the ECB is collateralised debt. We're talking about a default on unsecured debt.

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 Fri Feb 4th, 2011 at 01:40:53 PM EST
[ Parent ]
collateralised debt

Well yes. Collateralised by the worthless assets of the irish banks.

by IM on Fri Feb 4th, 2011 at 02:04:19 PM EST
[ Parent ]
No, collateralised by "eligible collateral" by the ECB's own definition.

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 Fri Feb 4th, 2011 at 04:11:45 PM EST
[ Parent ]
You see, the worthless assets have been packaged into NAMA and sold to the irish government.

The good assets, those that there are, are being repo'd at the ECB's discount window.

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 Fri Feb 4th, 2011 at 05:02:58 PM EST
[ Parent ]
collateralised debt

Well yes. Collateralised by the worthless assets of the irish banks.

That is not the Irish public's problem. Any creditor who accepts crap collateral accepts the risk of a haircut. That's the whole point of the term "due diligence" when applied to collateral. The haircut can go all the way to 100 % if the collateral turns out to be worthless. That is not a problem. That is a perfectly normal bankruptcy, such as which happens every day somewhere in the OECD.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 12:56:01 AM EST
[ Parent ]
The ECB is accepting more and more worthless collateral nowadays as lender of last resort and as quantitative easing.
 The ECB is not a creditor. It is a central bank, in this case the Irish central bank. You don' lecture your own central bank about due diligence at time when it helps your banking system existing.
by IM on Sat Feb 5th, 2011 at 05:55:24 AM EST
[ Parent ]
Conducting monetary policy through the discount window is not an excuse for bailing out insolvent banks. Insolvent banks should be put through bankruptcy. Keeping them alive is not "helping."

And anyway, this isn't about the Irish banks anymore. It's about the Irish government debt. Why is this so hard to understand?

Incidentally, if the ECB were doing its job as a central bank and fixing the price of government bonds, then we wouldn't be having this discussion in the first place.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 06:07:04 AM EST
[ Parent ]
In this case, the ECB should just end lending to Irish banks.

What exactly are you propagating here? Austrian economics?

by IM on Sat Feb 5th, 2011 at 06:32:34 AM EST
[ Parent ]
No, the ECB should not "just end lending to Irish banks."

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.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 06:49:33 AM EST
[ Parent ]
That actually makes some sense. There is a little problem, though: The ECB doesn't have the legal authority to resolve anything.

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.

by IM on Sat Feb 5th, 2011 at 07:02:05 AM EST
[ Parent ]
That excuses the ECB from the first paragraph. It does not excuse the ECB from anything else on that laundry list of indictments of poor performance.

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.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:14:29 AM EST
[ Parent ]
And this is difficult because some here tend to jump around: If I talk about the debts of the Irish public they talk about the banks and their creditors. If I point that the "punish the bank creditors" idea is much to late, they talk about the Irish public debt.

So its public debt now and  all public debt hold by "foreigners" - that is fellow europeans - is per se odious debt.

by IM on Sat Feb 5th, 2011 at 06:38:29 AM EST
[ Parent ]
There are multiple factors/aspects involved in the situation; and in the normal, condensed give-and-take of these types of discussions, different answers are given in response to the various points made.

I was tempted to down-rate your remark for willful mis-characterization, but I'll simply make this comment instead. The thread proves that you are incorrect.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Sat Feb 5th, 2011 at 12:21:31 PM EST
[ Parent ]
The thread proves nothing of the sort. And you shouldn't threaten people who are arguing with you.
by IM on Sat Feb 5th, 2011 at 01:18:36 PM EST
[ Parent ]
The ECB is not carrying out quantitative easing, since they insist on "sterilizing" all their sovereign bonds purchases, which effectively draws liquidity from the private sector in order to fund the bnod purchases.

There are indications that there's no more private liquidity to be drawn.

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 Sat Feb 5th, 2011 at 06:10:15 AM EST
[ Parent ]
They are accepting these under terms that stifle the respective economies, especially if you are not very high up in the ladder. They are buying up bad debt to protect private bankers from a EU periphery default, and at the same time imposing (and that is exactly the word, they are actively taking part in these discussions in Greece) a neoliberal agenda that destroys among other things labor rights, collective bargaining and any vestiges of a social state - this is a politically unaccountable yet activist ECB. And if you look at the Merkel / Sarkozy "competitiveness agenda", which is about to be rammed down the throats of pretty much every one in the EU, it turns out that this was a part of a very aggressive Shock Therapy strategy.

This is most definitely not what a Central Bank should be doing. The ECB is acting literally as an enemy of the people. Of all countries.

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Sat Feb 5th, 2011 at 06:13:22 AM EST
[ Parent ]
What neoliberal agenda?

 Look, I am hardly a expert on Irish politics. But as far as I know every Irish government and party since twenty years has happily pursued a neoliberal agenda: Fianna Fail and the Greens, Fianna Fail and the Progressive Democrats, Fine Gael and Labour, Fianna Fail and Labour.

And now you want blame "Europe"? Mighty convenient.

by IM on Sat Feb 5th, 2011 at 06:43:09 AM EST
[ Parent ]
What was, pales in comparison to what is coming. I mean Ireland had collective bargaining? Public schools? I'm not sure these are part of any plan for the future that the EU elites have in mind.
And I see this as an opportunity to get the Irish (and European) people to reject neolib policies once and for all versus the opportunity for the elites to completely destroy any vestiges of a social state anywhere in Europe. You somehow see the crisis as some sort of game of moral rewards and punishments. However this is about how the future EU will be structured, on whether, say, the ECB will become a democratically accountable institution and not a clearing house for banker domination in the European economy.

If one thinks that ECB/IMF austerity should be rejected on principle in this case, then I don't see how else Ireland can help this cause other than by doing something like what Jake is saying.

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Sat Feb 5th, 2011 at 06:53:13 AM EST
[ Parent ]
"Europe" is not to blame for causing the Irish crisis, but they are to blame for having completely botched their policy reaction to the sovereign debt crises of 2010. And for writing neoliberal (well, not even neoliberal, actually Austrian) economics into the EU constituent treaties.

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 Sat Feb 5th, 2011 at 10:07:23 AM EST
[ Parent ]
As I've said before, for economic purposes, the upper levels of the banking sector in Europe and elsewhere tends to act as a quasi-independent nation state.

It's not so much about "Europe", but about European elements in international banking sector joining in with the collective financial nervous breakdown, and demanding that Europe's real economies should pay to clean up the vomit and replace the carpets and the furniture.

The only possible mature and democratic response to this is "no."

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Feb 5th, 2011 at 10:15:49 AM EST
[ Parent ]
What neoliberal agenda?

Why, Merkel's so-called "competitiveness pact".

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 03:39:10 PM EST
[ Parent ]
Why are the citizens not responsible for due diligence in electing their officials, and pressing for jail for crooked ones who drop regulations for their cronies?

Align culture with our nature.
by ormondotvos (ormond no spam lmi net no spam) on Sat Feb 5th, 2011 at 09:55:24 PM EST
[ Parent ]
They are.

But killing the Irish economy in order to make a point about the consequences of electing crooks and liars to high office is overkill and collective punishment. What about the Irish citizens who were shouting bloody murder about their corrupt and in-bred politicians? They'll be punished too if the economy goes into the crapper.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 10:03:32 PM EST
[ Parent ]
That is a good question. 80% or so of the Irish voters voted in 2007 for openly neoliberal parties.
by IM on Sun Feb 6th, 2011 at 11:48:36 AM EST
[ Parent ]
So did 80 % of the German voters at the last election. Does that justify telling all German bondholders to take a hike?

No, it does not. Bondholders should be given haircuts in order of their importance for the productive economy, and in a manner that is distributionally reasonable. Widows and orphans should be protected. Bankers should lose their shirts.

- 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 06:32:18 PM EST
[ Parent ]
Now that is a lie.
by IM on Mon Feb 7th, 2011 at 09:26:30 AM EST
[ Parent ]
I suppose whether the SPD is neoliberal is in the eye of the beholder.

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 Mon Feb 7th, 2011 at 09:29:10 AM EST
[ Parent ]
True. But you cuold say the same about Labour in Ireland. That is why I said openly neoliberal: FF, FG, PD.
by IM on Mon Feb 7th, 2011 at 09:37:25 AM EST
[ Parent ]
IM:
True. But you cuold say the same about Labour in Ireland.
And that proves what exactly?

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 Mon Feb 7th, 2011 at 10:23:12 AM EST
[ Parent ]
I wouldn't call Labour neo-liberal. Certainly centre-left at best though. Their manifesto for the last election was about things like transfers to the poor and centre-left stuff like that.
by Colman (colman at eurotrib.com) on Mon Feb 7th, 2011 at 10:31:30 AM EST
[ Parent ]
After Hartz IV?

After sabotaging the SPD/Linke coalition in NRW for absolutely no gain?

After preferring a Grand Coalition over an SPD/Linke coalition at the federal level?

No, not really.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 7th, 2011 at 09:43:01 AM EST
[ Parent ]
I was trying to be polite...

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 Mon Feb 7th, 2011 at 10:31:02 AM EST
[ Parent ]
All debt is not equal. The assumption of the bad debts of the Irish banks by the Irish Government was, arguably, an abuse of the discretion by the ruling party, Fianna Fail. They had no legal obligation to do so, and certainly no obligation to do this by themselves. When a bank makes a loan to a borrower, the bank is or should be in a much better position to assess the creditworthyness of the borrower. If they take risks, they need to make risk provisions. It is the duty of the regulators of that bank to see that they do. Just because German banks took a big risky dump in Ireland does not absolve the ECB or the German Central Bank from responsibility.

Unfortunately, most economics currently taught in universities in the US and Europe makes many utopian assumptions about the behavior of individuals and institutions in the economy and in markets. These assumptions have been challenged by events, but the adherents refuse to change their assumptions. There are many on ET, myself included, who believe that many of those economists, and especially the interests that influence their selection for high posts, prefer the existing theory for its effectiveness as a smoke screen and as a public religion with which to loot the public despite its obvious debilities in explaining how finance and the economy work.

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 Fri Feb 4th, 2011 at 01:58:15 PM EST
[ Parent ]
The Irish Question is that of whose ox gets gored. And there is a considerable difference in the relative power of the creditors and debtors. Rather like the mining company that further squeezes its employees through sharp practices at the company store and rental of company housing.

The question is whether the Irish people should bear the entire cost of solutions that cannot work so that the German, British and other government will not have to confront the insolvency of some of their own banks. The Germans, the British and other creditors would prefer to "extend and pretend". But that keeps in place the problems that led to the current fiasco in the name of saving face for governments and institutions that allowed and even encouraged these loans.

In addition, the policies required of the Irish under the terms obtained by the ECB will greatly impoverish the Irish people to benefit a few wealthy individuals in creditor nations. That is the evil through which I would like to see a stake driven.

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 Fri Feb 4th, 2011 at 02:11:28 PM EST
[ Parent ]
You are not helpful. The Irish central bank and Ireland in general did not really regulate its own banks. Your theory that that was somehow the responsibility of other regulators to regulate Irish banks let's your neoliberal irish friends of thew hook. Instead it is evil foreigners.

There is no exposure of german banks to genuine irish banks. What happened is that Ireland was because of its no regulation and ultra low corporate taxes a welcome tax and regulatory haven for daughters of foreign banks. One was depfa, others were big SIVs of WEtsLB for example. The cost for these daughters is already borne by Germany. The exposure to genuine Irish banks, who ruined themselves in real estate, was always low and is after two years almost nonexistent.

This whole foreign banks would lose is just a xenophobic talking point to distract the Irish from the responsibility of their own banks and government.  

by IM on Fri Feb 4th, 2011 at 02:22:03 PM EST
[ Parent ]
Perhaps you are missing the realpolitik aspect of this. Organizing a political movement involves narratives with moral judgments. Your morality may be a bit different from mine in that I oppose the neoliberal scheme in the broadest sense, and my morality does view the enemy as evil. Others may view them as ill-informed; I do not.

Point being that it takes campaigns to make a movement - much as the current Middle-Eastern situation may evolve. I want for our side to build a recruitment system, which includes propaganda, of course.

We can discuss the philosophical points 'til the cows come home, but at some point we stick our analysis out there - which I do often enough here at home - and try to build a base.

As far as the haircut aspect, you are certainly correct in that the natives will be shaved, too. As Migeru implies, they can suffer either now with the punishments that will accrue to those who fight back; or they can suffer more over the long term as this bailout debacle robs them in smaller amounts, but constantly.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Fri Feb 4th, 2011 at 02:44:48 PM EST
[ Parent ]
The Irish central bank and Ireland in general did not really regulate its own banks. Your theory that that was somehow the responsibility of other regulators to regulate Irish banks let's your neoliberal irish friends of thew hook.

I grant you that the Irish Central Bank failed to regulate its banks. Most likely regulatory capture. But there are two sides to every loan. When the Irish real estate bubble popped there were lots of foreign banks that were owed money. These banks also had an obligation to perform due diligence when making the loan. That they did is laughable. So they and their regulators also bear responsibility. But, especially in Germany, the attitude is that this is all the fault of a bunch of irresponsible banks in peripheral countries - the German version of evil foreigners.

I advocate a fair sharing of responsibility where each party takes a haircut. You advocate having only the evil foreigners take the haircut. Granted my position is unhelpful to German, British and other creditors and their agents in the guise of the ECB and BOE. Were all oxen to be gored perhaps there would be an incentive to construct a fairer and more balanced system that serves the purposes of more than just the elites in Germany.

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 Fri Feb 4th, 2011 at 05:29:44 PM EST
[ Parent ]
As I said, two years or so to late. All foreign banks have as far as possible left town, leaving the Irish government - NAMA and so on and the ECB holding the bag. But of course most Irish private capital has fled these banks too.

And now you have this cunning plan that foreign holders of Irish government bonds are unworthy and  domestic holders are worthy. That is fine as as far defending the interest of the Irish elite goes, but why is that now suddenly a pan-european progressive project?  

by IM on Fri Feb 4th, 2011 at 05:39:32 PM EST
[ Parent ]
How about all depositors, whatever their nationality, get saved up to a certain amount (say 100k to be ridiculously generous). Then you save as many of the rest as you can in some order that derives from whatever your strategic bargaining plan is as Jake outlined.

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Fri Feb 4th, 2011 at 06:02:45 PM EST
[ Parent ]
There have been suggestions that Ireland doesn't even have enough money to guarantee all deposits up to 100k. I find that hard to believe, but it's within the realm of possibility, given what we've seen worldwide in the last 3 1/2 years.

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 Fri Feb 4th, 2011 at 06:10:55 PM EST
[ Parent ]
And now you have this cunning plan that foreign holders of Irish government bonds are unworthy and  domestic holders are worthy.

Far from it! I advocate and support claw-backs from all involved in this debacle. Every cent obtained by executives and board members and all income received by politicians and regulators regardless of how it has been sequestered in property, trusts, etc. This should apply to all profiting from these banks, Irish, British, German, etc.

We need to return private banking to the days of unlimited personal responsibility of the bankers for the solvency of their institutions. The state can clean up damage to others, but should see that the full burden of fiascoes fall on the bankers themselves. Current policy is the exact opposite. That is the core problem.

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 Sat Feb 5th, 2011 at 04:43:34 PM EST
[ Parent ]
The Irish central bank and Ireland in general did not really regulate its own banks.

Nobody here is disputing that. Ireland was a massive case of control fraud. People should be going to prison for that. But the fact that several highly placed property developers, bankers and Fianna Fail machine politicians should be dining on prison fare for a few years does not mean that the general public has to be flagellated in order to honour obviously bogus debts.

You could make the argument that those who voted for Fianna Fail bear some measure of responsibility, since Ireland is, after all, a democracy. While I agree that on some moral level they do, as a practical matter the buck has to stop somewhere. You cannot flagellate the entire Irish economy in penance over their corrupt politicians, for the same reason that you couldn't hang every German who voted for the Nazi party, or worked in the German armaments industry during the war.

Personal responsibility is all well and good, but you have to draw a line somewhere, or your quest for personal responsibility will turn into collective punishment.

The exposure to genuine Irish banks, who ruined themselves in real estate, was always low and is after two years almost nonexistent.

Well, that would simplify matters greatly. Then the Irish government just needs to shaft some domestic Irish bondholders. Which is always less complicated than shafting foreign bondholders.

There's just the teensy-tiny problem that it isn't true.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 01:09:55 AM EST
[ Parent ]
I call Godwin!

Is is all the fault of Fianna fail now, what?

Yes, Fine Gael and Labour and the greens and the Progressive Democrats were all a bunch of communists.

by IM on Sat Feb 5th, 2011 at 06:47:04 AM EST
[ Parent ]
Tell me, do you believe that all Americans should be held responsible for the war crimes in Iraq, just because they are supported by both their major parties?

The buck has to stop somewhere. Killing the Irish economy to punish the Irish for electing crooked politicians is both overkill and collective punishment.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:10:50 AM EST
[ Parent ]
The Fine Gael Labour Government left office in 1997 - long before any property bubble or unsustainable fiscal expansion.  I really don' understand why you appear to be trying to spread blame equally all round.  While there may be few in positions of power who are entirely blameless, the primary responsibility in Ireland has to lie with the FF led Governments since 1997, their developer/banker friends, the Central bank and the financial regulator.

In any case the primary losers now are the poor, old, sick and unemployed, few, if any of whom bear any responsibility for the crisis.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Feb 6th, 2011 at 09:08:24 AM EST
[ Parent ]
Do you really want claim the neoliberal policies of Ireland were all fine until the property bubble? And did either Fine Gael or even Labour offer any alternatives at the last election?
Six and half a dozen.
by IM on Sun Feb 6th, 2011 at 12:00:44 PM EST
[ Parent ]
Neo Liberal policies as such weren't introduced until Charlie McCreevy and PDs decided they preferred Boston to Berlin and introduced pro-cyclical tax reductions at a time of booming development and construction.  You may not be happy with economic policies prior to 1997 but to describe them as neo-liberal would be inaccurate.  There was huge state intervention in economic activity, the trade unions were officially recognised as "social partners" in national economic planning, and social welfare and minimum wages were increased (to what is now regarded as an unsustainable degree).  Throwing the neo-liberal label around too liberally is no more helpful that making nationalistic or Godwinian allegations.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Feb 6th, 2011 at 01:18:50 PM EST
[ Parent ]
I am using it as shorthand, yes, But how would you dewcribe Fine Gael? Social democrats? And hasn't Labour been very third-wayish now for years?
by IM on Sun Feb 6th, 2011 at 02:39:28 PM EST
[ Parent ]
You have also claimed the German policy is not neoliberal. How would you describe it Fine Gael's EPP partners, the CDU? And hasn't the SPD been a model for European third-wayers since Schroeder?

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 02:49:24 PM EST
[ Parent ]
I did say german policy tin this crisi was not neoliberal. And that is true. Prior to that both CDU and SPD have been drifting to the right. That said, the CDU is still to left of say the Tories, or the PP or both FF and FG. And I think, especially in the last years the SPD is going back to the left. And even in worst years we were still tame compared to New Labour.  
by IM on Sun Feb 6th, 2011 at 03:19:10 PM EST
[ Parent ]
Two words: Hartz IV.

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 03:33:16 PM EST
[ Parent ]
That was pre-crisis. If we agree we are talking about a economic crisis starting in 2008 or late 2007. One word:
Kurzarbeit.
by IM on Sun Feb 6th, 2011 at 03:49:52 PM EST
[ Parent ]
The German response to this crisis has been a single-minded focus on balanced budgets and wage suppression. How isn't that neoliberal policy? Except, of course, insofar as it might be Austrianism...

- 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 06:40:28 PM EST
[ Parent ]
The real german response has been automatic stabilisers and stimulus. The rest was rhetoric.
by IM on Mon Feb 7th, 2011 at 09:39:42 AM EST
[ Parent ]
Rhetoric. Right. We all know that constitutional amendments are expressions of rhetoric, not policy.

Incidentally, why shouldn't Ireland pursue countercyclical fiscal policy? Because the current German line is that they shouldn't.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 7th, 2011 at 09:42:42 AM EST
[ Parent ]
In Irish terms, FG were mildly social democrat under Garrett Fitzgerald, more centrist under Bruton and are now becoming more old style conservative now under Kenny.

Labour wouldn't quite know how to find one way, never mind three...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Feb 6th, 2011 at 02:55:54 PM EST
[ Parent ]
<sigh>

Here's my simplified story about the Irish economy:

  • During the late 80's and early 90's there were a sequence of changes - tax cuts from very high rates (marginal of 90% at one stage!), the maturation of Irish infrastructure with the help of EU transfer payments, that sort of thing - that freed up the market economy to be reasonably efficient.

  • We started playing some catch-up on the rest of Europe - the whole EU solidarity thing worked, leading to pretty fast growth from a very low base. Not a bad thing.

  • The next ten years of FF-led government was an unholy mix of neo-liberals and populists who wanted to buy power by any means. What followed was a festival of tax cuts and selling the family silver - privatising assets - in order to fund tax cuts. The property boom was encouraged and fanned when it looked like flagging so that further giveaways could take place.

  • Meanwhile, the neo-liberals almost entirely captured the media. Ireland is best viewed as a regional UK media market, with three Irish TV stations and tens of UK or US ones, with UK newspapers and tabloids selling well. Labour ended up believing they couldn't be too lefty if they wanted to get votes because the conventional wisdom, locally and internationally, was entirely against them. Every other day there were reports of how wonderful the rest of the world thought the Irish model was. Ireland was the shining poster child, the richest country in Europe (note that income!=wealth).

  • Complaints (mentioned by Labour) about inequality, about the fragility of the tax system, about the dangers of pro-cyclical policies were all poo-pooed, with the Taoiseach of the time saying that the unbelievers should go kill themselves.

  • Then the economy started to slow and the financial meltdown happened and the government and the financial regulators couldn't bring themselves to understand exactly how badly they screwed up. They went from being the smartest guys in the room to being a crowd of feckless paddies again and they have no idea how to deal with that except more of the same: cut, cut, cut and be good little boys and girls and don't let any banks die or the serious people will be upset at them.

  • Bank guarantee, etc.
by Colman (colman at eurotrib.com) on Mon Feb 7th, 2011 at 10:07:54 AM EST
[ Parent ]
I call Godwin!

I would be very careful with that call. Were one to ignore the rampant short-sighted, self-serving stupidity employed by so many in their response to the Irish debt crisis, one could construct a narrative composed of the long litany of macro-economic policies and ECB decisions that have consistently been favorable to Germany and unfavorable to the periphery that Germany is attempting to achieve by economics what they could not achieve by military force 70 years ago. That would be worthy of a Godwin call. (I in fact believe that it is a group of wealthy individuals and those who serve them in several countries that, not entirely coherently, is advancing such a goal in their somewhat collective self interest.)

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 11:30:59 PM EST
[ Parent ]
This whole foreign banks would lose is just a xenophobic talking point to distract the Irish from the responsibility of their own banks and government.

Merkel, already the largest contributor to the EU's rescue fund, must walk "a very thin line" as she tries to balance her pledge to do whatever is needed to save the euro with voter hostility to the bailouts, said Carsten Brzeski, an economist at ING Groep NV in Brussels. She also risks harming her country's banks by her insistence that bondholders take losses on future bailouts. German lenders hold more than 112 billion euros of debt issued by the governments of Greece, Ireland, Portugal, Spain and Italy, according to data compiled by Bloomberg.


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 04:50:57 AM EST
[ Parent ]
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 ]
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.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 12:57:33 AM EST
[ Parent ]
IM is representative of a widespread view in Ireland that it is not realistic for Ireland to default on ECB debt without putting our membership of the Euro and EU in doubt - and destroying our banks and attractiveness as a recipient of foreign direct investment into the bargain. In other words the decision to guarantee the banks was fatal and cannot now be undone now that most of the original bondholders have been repaid and that debt replaced with Sovereign debt.

People understand the situation in terms of their own experience and extrapolate that to high finance where different rules apply. The whole subprime scam was based on the realisation that most people want to repay their debts even at the cost of going hungry and the immorality of high finance and "debt restructuring" is outside their moral universe.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 4th, 2011 at 06:20:01 PM EST
[ Parent ]
it is not realistic for Ireland to default on ECB debt without putting our membership of the Euro and EU in doubt - and destroying our banks

What? People in Ireland still think they have banks left, let alone worth defending?

At least the current Irish Central Banker is not that insane: Sell Irish banks to foreign investors, says Honohan

Ireland's banks should be sold off to foreign owners to quicker clean up the debt crisis, the country's top banker declared today.

Patrick Honohan, governor of the Central Bank, also claimed a new government will be able to change the terms of the €85bn EU/IMF bailout.

The banking chief said getting overseas investors to take over the homegrown banks that survive the current economic mess was looking like the best option.



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 Fri Feb 4th, 2011 at 06:34:54 PM EST
[ Parent ]
Migeru:
What? People in Ireland still think they have banks left, let alone worth defending?

The ATM machines still work...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 4th, 2011 at 08:03:32 PM EST
[ Parent ]
But that's not what this is about. The payment clearing system will survive unscathed.

Somebody really has to explain to people (and politicians, and unfortunately even to central bankers) how a regulatory bank resolution works.

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 Sat Feb 5th, 2011 at 02:51:22 AM EST
[ Parent ]
That is another central point.  The Government literally said the ARMs would stop working if they didn't guarantee and then bail-out the banks.  The whole scam was based on the notion that the banks were indivisible and absolutely essential to the continence of ordinary day to day and business life.

The metaphor of the ATMs not working was actually used to bring home to people the seriousness of the situation - unfortunately in an entirely misleading way.

So the key points are - debt restructuring is an entirely routine way of resolving structural imbalanced which have been allowed to build up between debtors and creditors - for which both are responsible, and yes, the ATMS (which is the sum total of many people's experience of banking - will continue to work before, during and after the process.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Feb 5th, 2011 at 06:39:20 AM EST
[ Parent ]
And it's moral to allow the fraudsters and parasites to walk away from the mess they helped create?  

What about their moral responsibility for not doing their damn jobs?  

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Fri Feb 4th, 2011 at 06:37:38 PM EST
[ Parent ]
No.  But it's the law as it stands...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 4th, 2011 at 08:05:00 PM EST
[ Parent ]
And sometimes the law is an ass.

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 Fri Feb 4th, 2011 at 11:28:42 PM EST
[ Parent ]
But waht about the loans to the irish government?

Immaterial.

Loans actually extended to the Irish sovereign amount to less than 20 % of the total outstanding Irish sovereign debt. The remaining 80+ % are loans originally extended to Irish banks, which the Irish sovereign, in a fit of momentary insanity, decided to guarantee. That guarantee should never have happened, and simply telling all the hedge funds and foreign banks to go take a hike is the simplest way to reverse it at this point.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 12:56:41 AM EST
[ Parent ]
And that is a illusion. The Irish debt did rise fast because they had a deficit caused by the economic crisis. Negative growth, a tax system depending on the house bubble, 13% unemployment will cause a significant deficit.

Take 2010. Of the famous 30% deficit, 20% or so are guarantees etc. to the banks. But 10% is the ordinary deficit. And these "ordinary deficits" alone have caused a significant part of the debt.

by IM on Sat Feb 5th, 2011 at 06:56:42 AM EST
[ Parent ]
Ten percent deficits in a serious business depression are not a bug, they're a feature. It's called "countercyclical fiscal policy." Look it up.

The ECB should be printing money on demand to support that, not demanding that the member states fund their countercyclical policy in the money markets.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:17:38 AM EST
[ Parent ]
My god. I am pro countercyclical policy. But if a 10% deficit is cause by automatic stabilisation and countercyclical policies, you can't turn around and declare the resulting debt odious debt. I mean you are not a member of the tea party after all.
by IM on Sat Feb 5th, 2011 at 07:40:58 AM EST
[ Parent ]
But that's not the part of the debt Jake, or anyone here, is considering odious (it could be, in Greece part of it certainly is)! He is saying that the Irish government had no business socializing the extra 20% GDP of private debts of Irish bankers. He is also, I think, rather warm to the idea that said bankers should go to jail (I wouldn't put it past him to even be for the abolition of private banks), and that public money is for the public good, which I think automatically disqualifies him from Tea Party membership

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sat Feb 5th, 2011 at 07:47:15 AM EST
[ Parent ]
Private banks are a perfectly fine thing to have. They just shouldn't be allowed to run their own macroeconomic policy, let alone run the government's.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:51:44 AM EST
[ Parent ]
But

1) I can call it odious that the ECB isn't buying those bonds at face value, and is forcing Ireland to jump through ridiculous hoops and fund in the private market.

and

2) Just because a third of the debt isn't odious doesn't mean the other two thirds also aren't odious.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:49:21 AM EST
[ Parent ]

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