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Cowengate (Update 3)

by Frank Schnittger Mon Jan 24th, 2011 at 08:59:51 AM EST

[UPDATE 3, 26/1/11] Michael Martin has been elected to suceed Brian Cowen as leader of Fianna Fail.

Micheál Martin elected new leader of Fianna Fáil in vote

Former minister for foreign affairs Micheál Martin has been elected as the new leader of Fianna Fáil.

Mr Martin won a secret ballot of the parliamentary party this afternoon to become the eighth leader of the party.

According to sources, Mr Martin received 33 votes in the first round of voting, followed by Éamon Ó Cuív on 15 votes, Brian Lenihan on 14, and Mary Hanafin on 10.

After Ms Hanafin's votes were reallocated, Mr Martin had 36, while Mr Lenihan and Mr Ó Cuív had 18 votes each. On elimination of Mr Lenihan, the final result was 50 votes for Mr Martin and 22 for Mr Ó Cuív.

[End UPDATE 3]

[UPDATE 2, 23/1/11] The Green party ministers have just announced their resignation from the government bringing the number of remaining cabinet ministers down to the constitutional minimum of 7. They have also called for the general election date to be brought forward and for the Finance Bill to be passed on an accelerated parliamentary schedule with the agreement of the opposition.[End UPDATE 2]

[UPDATE 22/1/11] Brian Cowen has resigned as leader of Fianna Fail, but not as Taoiseach. The government (with only nine cabinet Ministers) thus remains in place at least until a parliamentary vote of confidence next week. [End UPDATE]

The Irish Government is slowly disintegrating as the fall-out from the banking bail-out and the ECB/IMF deal gradually works its way through the body politic.

frontpaged with minor edit - Nomad


First there was a failed internal Fianna Fail no confidence motion in the Taoiseach and Fianna Fail Leader Brian Cowen led by the Minister for External affairs, Michael Martin.  At the last moment, having seen the way the numbers were going, Finance Minister, Brian Lenihan swung his support in behind Brian Cowen even though he had been agitating behind the scenes against Cowen for the past few months.  This angered his own supporters who had been gearing up for the succession battle and who now felt betrayed and exposed by his sudden volte face.

Exit, stage left, Michael Martin from the Government and Brian Lenihan from the affections of his own supporters and the bulk of the party who saw him as trying to be too clever by half.

Then it was Brian Cowen's turn to shoot himself in the foot.  Having consolidated his position by offering ministerial positions to some of the waverers he engineered the immediate resignations of 5 more cabinet ministers (who had planned to retire after the next general election) with the intent of reshuffling his cabinet and presenting a "radically" new team to fight the general election.

Unfortunately he had neglected to listen to the concerns of his coalition partners, the Greens, who viewed such a reshuffle just before a general election as a stunt which would not go down well with the electorate. Their refusal to support the cabinet reshuffle meant that Cowen was left with a cabinet of 9 rather than 15 Ministers and those 9 include two Green Ministers and at least one other minister who had acknowledged she voted against Cowen in the vote of confidence.  Apparently the Minister concerned, Mary Hanafin, has confidence in Cowen as Taoiseach, but not as leader of Fianna Fail, a position hardly likely to endear her to all non-Fianna Failers...If he is not good enough to be leader of Fianna Fail, how can be be good enough to lead the country?

Now some Fianna Fail dissidents are threatening to vote against the government in a parliamentary vote of No Confidence tabled by the Labour Party and due to be debated early next week. If Brian Cowen loses that vote he will have no option but to resign immediately and bring forward the general election currently announced for March 11th.

The significance of this is that there may then be no time to pass the Finance Bill which gives effect to the draconian budget agreed as part of the IMF/ECB deal.  With Labour and Sinn Fein calling for a renegotiation of that deal there is also no guarantee that this Finance Bill will be passed by any incoming Government.  Thus the whole ECB/IMF "rescue" plan for Ireland may be in the process of unravelling. Fianna Fail is in free-fall in the polls, but the electoral debate between the left (Labour and Sinn Fein) and the right (Fine Gael) is likely to be around how realistic the prospects for a renegotiation of the IMF/ECP plan really are.

The IMF/ECB plan includes the provision of c. €67 Billion in loans to Ireland to cover the cost of the bank bailout and shelter Ireland from very hostile sovereign debt markets.  The plan is unpopular in Ireland because the funds are being used, in the main, to bail-out the German, French and British banks who made bad investments in Irish banks, and not to support the Irish economy per se. Worse that that, whereas the ECB/IMF are borrowing the money at c. 2.5%. on international markets, they are lending it on to Ireland at an average interest rate of c. 5.5% thus booking a tidy profit of c. €2 Billion p.a. in interest payments alone.

Labour and Sinn Fein have been very non-specific about what a renegotiation of the ECB/IMF plan might look like, so this diary attempts to predict how such a renegotiation might play out.

Basically the IMF/ECB plan (PDF)involves four successive annual budgets cutting €18 Billion from Irish public expenditure with €6 Billion front loaded into the 2010 Budget (now subject to implementation of the Finance Bill currently before the Dail (Parliament).  That €6 Billion in cuts is divided roughly into a  €2 Billion increase in taxes, a €2 Billion cut in capital expenditure, and a €2 Billion cut in current expenditure (mainly health, social protection, and education).

The combination of tax increases and expenditure reductions are proving catastrophic for many families where the bread earners are losing their jobs, which are in negative equity (houses have lost 50% in value since 2007), and who are now being hit by swingeing increases in taxes,  health insurance (+45%) and mortgage interest rates.  

However just as damaging, in the short term, is the deflationary impact of the reduction in capital expenditure which is undermining any prospect of a broader economic recovery otherwise being led by very healthy exports. Ireland currently has a massive trade surplus with exports double imports...  
Irish trade surplus among top in EU - The Irish Times - Fri, Jan 14, 2011

Ireland recorded the second highest trade surplus in the EU in the first nine months of 2010, new data showed today.

According to the statistical office of the European Union Eurostat, only Germany ranked higher for the period, recording a €127.6 billion surplus. Coming in behind Ireland was the Netherlands, with a €34 billion surplus and Belgium, at €15.8 billion.

Over the nine months, Irish exports rose by 4 per cent to €73.3 billion, and imports fell by 1 per cent to €37.1 billion, resulting in a €36.2 billion surplus. That was a rise of €3.2 billion compared to the same period in 2009.

Thus even though the famed export led German economy is 16 times bigger than Ireland's, its export surplus is only 3.5 times larger. But Ireland's export sector is heavily dominated by very capital intensive foreign multinationals who provide only limited employment opportunities, and cannot compensate for the massive redundancies being created in every other sector of the economy.

The solution, therefore, to the Irish economic free-fall in other sectors has to involve some measure of reflation not permitted under the ECB/IMF plan. Merkel seems determined that the IMF/ECB plan must remain punitive to discourage other "profligate" nations from going down the bail-out road.  But if the Irish electorate rejects the bail-out as currently constituted, the stability of the entire Eurozone could once again be threatened.  

One solution might be to permit the €2 Billion"profit" made by the IMF/ECB on the loans to Ireland to be used to restore the cuts in capital expenditure in the budget - focused on green energy and infrastructural projects receiving specific EU approval - which would have the side benefit of facilitating an least a partial recovery in the domestic sector and labour market.

Merkel could be reassured that the money isn't going toward "excessive" social expenditures, and the EU's objectives for green energy and economic infrastructure could be supported. When Irish MEP Joe Higgins suggested that the EU was complicit in the impoverishment of working class Irish families, Barroso was not best pleased:

Barroso rounds on Higgins - The Irish Times - Wed, Jan 19, 2011

European Commission president Jose Manuel Barroso reacted with fury today as Irish Socialist MEP Joe Higgins accused Brussels of destroying Irish services and living standards.

During a debate at the European Parliament in Strasbourg, Mr Higgins described the European Financial Stability Facility, as the euro zone rescue fund is known, as "nothing more than another tool to cushion major European banks from the consequences of their reckless speculation on the financial markets".

Mr Higgins claimed the EFSF was a "mechanism to make working class people throughout Europe pay for the crisis of a broken financial system and a crisis-ridden European capitalism".

He accused Mr Barroso and European Council president Herman Van Rompuy of effectively transferring tens of billions of euros of private bad debts "on to the shoulders of the Irish people".

Mr Higgins claimed the EU was destroying services and the living standards of Irish people. "Far from being a bailout, your International Monetary Fund-EU intervention in Ireland is a mechanism to make vassals of Irish taxpayers to the European banks," he said. "We on the left in Ireland will insist that it goes to a referendum of the Irish people before it is passed."

A furious Mr Barroso rejected the claims, instead blaming Irish banks and lax regulation for Ireland's problems.

"To the distinguished member of this Parliament who comes from Ireland, who asked a question suggesting that the problems of Ireland were created by Europe, let me tell you: the problems of Ireland were created by the irresponsible financial behaviour of some Irish institutions, and by the lack of supervision in the Irish market.

"Europe is now part of the solution, it is trying to support Ireland. But it was not Europe that created this fiscally irresponsible situation, and this financially irresponsible behaviour," he said.

However no one, Joe Higgins included, is disputing that the banks and lax financial regulation in Ireland caused a large part of the problem.  The problem lies in the deflationary solution currently being proposed by the IMF/ECB. The EU has it in its power to resolve at least part of that problem, and at no net cost to the EU.  Unless there is at least some flexibility on that IMF/ECB plan, the Irish economy and polity will continue to implode, and any new Government could well suffer the same fate as Fianna Fail.  Debts which cannot be paid will not be paid... so why wait until both Ireland and the Eurozone are fatally destabilised?

Display:
But if the Irish electorate rejects the bail-out as currently constituted, the stability of the entire Eurozone could once again be threatened.

And that would be a bad thing? Ireland should only agree to bear the cost of, at most, half of the bad debt, and that, IMO, would be generous. In turn the Irish government should then turn to claw-backs from all who benefited from the bailout -- down to every cent they ever earned as executives and board members. It should tell Brussels and the ECB to eat the rest or to get it from the banks that lent it. This situation will be exactly as disastrous as the Irish electorate and resulting government allow it to be.

Joe Higgins should repeat his speech at every opportunity and point out that Barroso offered no real argument in refutation, only bare assertions, and accuse him of serving as the front man for banksters.  At least Ireland has one Socialist worthy of the name.

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 Jan 21st, 2011 at 10:57:59 PM EST
As in any negotiation, it's largely a matter of the balance of power between the two sides.  Right now Ireland has few bargaining chips, other than the negative one of being able to create a lot of grief for other Eurozone members.  Virtually all the bank bondholders have been repaid by now - by raiding the national pension fund, currency reserves, and new borrowing.  This is money which will never come back.  It is the new money which has to be borrowed to fill the whole that is causing the problem.

The huge mistake was in turning the private debt of private banks into public sovereign debt - and that is why Fianna Fail are in freefall.  Fine Gael wouldn't have been much better if in power.  They all subscribed to the inferiority complex which demanded that the Gods of the international markets had to be appeased.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jan 22nd, 2011 at 04:56:44 AM EST
[ Parent ]
On the contrary. Ireland is holding the whip here:

Ireland is fully funded for the next year or so and can take a 50 % export hit before you get a current accounts problem. Just default. By the time you need to issue bonds to cover your next deficit budget, the hysterical children in the markets will have calmed down sufficiently. Or maybe not, in which case you can up the ante further by issuing greenbacks instead of bonds until the ECB starts doing its job and puts a ceiling on all EU sovereign debt yields.

With the sort of current accounts you have, there ain't nothing nobody can do to touch you, short of sending a naval task force.

As for the emptying of the "trust funds," those funds' assets are in government paper anyway. Nothing prevents the Irish government from defaulting on those papers that were removed from the "trust fund" and replacing them with newly issued paper. Or, for that matter, abolishing the "trust fund" nonsense entirely and start accounting for social transfers on a pay-as-you-go basis (which is the only meaningful way to account for public spending anyway, since public spending is constrained by macroeconomic stability rather than the present value of assets).

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 23rd, 2011 at 11:53:45 AM EST
[ Parent ]
You forget the ECB can probably crash the Irish banking system by refusing to provide liquidity to the commercial banks (which precipitated the crisis at the end of last year) or refusing to clear payments with the Irish Central bank...

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 Jan 23rd, 2011 at 12:38:30 PM EST
[ Parent ]
You forget the ECB can probably crash the Irish banking system by refusing to provide liquidity to the commercial banks

Nothing wrong with that you can't solve with greenbacks.

or refusing to clear payments with the Irish Central bank...

They could, but the Irish private sector would remain a net creditor even after a sovereign default. A clearing breakdown amounts to a negation of all cross-border debts, plus an instant current accounts rebalancing. Which would hurt the rest of the world more than it would hurt Ireland.

They can still do it just to be dicks, of course, but even so the damage to Ireland would be higher-order effects (in contrast to, say, Greece, where immediate rebalancing of the current accounts would lead to a substantial loss of consumption options; or Lichtenstein, where mutual default would destroy most of their net worth).

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 23rd, 2011 at 01:29:17 PM EST
[ Parent ]
What do you make of this?

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 Jan 23rd, 2011 at 06:58:53 PM EST
[ Parent ]
It doesn't tell me anything important.

The real game is whether the Irish central bank can set the rediscount rate, haircuts and criteria for what sort of assets they can take on their balance sheet. If they can't do that, it's just about whether the Irish state has to transfer the ECB policy rate to the ECB for distribution among the ECB's shareholders, or the Irish get to keep it.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jan 23rd, 2011 at 07:20:07 PM EST
[ Parent ]
I would assume that there is an agreement that the Irish Central Bank will use the money so created very much like the Fed used lots of money it created: it was given loanedto the banks for them to hold on their books to avoid formal insolvency, but they are not supposed to use it for other purposes. It is only to help the banks, not to help the economy.

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 Jan 23rd, 2011 at 08:24:40 PM EST
[ Parent ]
Therefore it is not inflationary.

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 Jan 24th, 2011 at 04:20:57 AM EST
[ Parent ]
What you propose goes way beyond the collective imagination of the body politic as to what is possible.  AFAIK the Government is only funded to mid 2011 at best, and the commercial banks need huge funds from the ECB to boost liquidity in the meantime.  Depositors have fled - thanks to their own stupidity and Merkel et al...


Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 02:29:16 PM EST
[ Parent ]
One solution might be to permit the €2 Billion"profit" made by the IMF/ECB on the loans to Ireland to be used to restore the cuts in capital expenditure in the budget - focused on green energy and infrastructural projects receiving specific EU approval - which would have the side benefit of facilitating an least a partial recovery in the domestic sector and labour market.

European Parliament

Committee chair Sharon Bowles (ALDE, UK), proposed a solution to some Member States' high refinancing costs.  "Member States contributing to the EU stabilisation mechanisms should not act as investment bankers when assisting fellow indebted members.  Once a Member State using the stabilisation facility has repaid the loan obtained, the windfall earnings should be returned to that country, in effect as a good behaviour bonus.  Moral hazard will still be addressed because high interest rates will be paid until the loan is repaid", she said.  Thís proposal was welcomed by Mr Monti, as it had been by Mr Barroso, when presented during a seminar the previous day.


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 Jan 22nd, 2011 at 04:12:04 AM EST
Wow, I didn't expect even this much from the liberals any more...

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Jan 22nd, 2011 at 04:21:40 AM EST
[ Parent ]
The EU might well end up doing what's needed after wasting a year or two trying every worse 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 Sat Jan 22nd, 2011 at 06:27:50 AM EST
[ Parent ]
I have met Sharon Bowles and my impression is that she is a nice person, as well as an effective politician (qualities that do not always go together).
by Gary J on Mon Jan 24th, 2011 at 06:47:44 AM EST
[ Parent ]
I met a number of the Lib Dem MEPs back in 2007 and the only one I didn't like was Liz Lynne.

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 Jan 24th, 2011 at 06:50:07 AM EST
[ Parent ]
Thanks for the quote - I hadn't seen this particular idea floated anywhere else. Unfortunately paying the "bonus" AFTER the debts have been repaid is far to late to have any great benefit.  The Irish economy needs to be reflated NOW.  If the debts ever are repaid, we won't need the money as our debt GDP ratio will be back to somewhere near the 25% it was before this all blew up.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jan 22nd, 2011 at 04:50:00 AM EST
[ Parent ]
This is not dissimilar to the Guarantee Society approach I advocate of a provision/guarantee charge paid both by members with a 'common bond' who extend and receive credit in respect of the use of a mutual guarantee.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Sat Jan 22nd, 2011 at 05:00:37 AM EST
[ Parent ]
Debts which cannot be paid will not be paid...

JakeS: Odious debts have odious debtors

... 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.

This was written about Iceland, but it applies equally to Ireland. Your own diary The Irish Disease provides a suitable starting point...

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 Jan 22nd, 2011 at 04:15:44 AM EST
Assuming the bad debt of Anglo-Irish et al. by the Irish State made about as much sense as putting your house on a donkey's back! It will reliably kill the donkey. Opponents of the deal should argue that anyone in the Dail who voted for assumption of any of these debts has shown prima facie evidence of either incompetence, of disloyalty or both and should never again hold office. And then there should be a thorough-going investigation of ALL relationships between the banks involved and the ministers and members who supported the bailout. I would guess that there is a high probability that more than one criminal prosecution would result. Then you would have your odious debt.

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 Jan 22nd, 2011 at 11:18:49 AM EST
[ Parent ]

Irish Prime Minister Cowen Resigns as Party Leader

DUBLIN--Irish Prime Minister Brian Cowen said he was resigning as leader of the governing Fianna Fail party ahead of the March 11 general election, bowing to pressure from within his party.

Mr. Cowen will remain as prime minister through the election. "I want the party to be in the best possible position to fight that campaign as a united party," Mr. Cowen said. "Fianna Fail's big fight is with the opposition not with ourselves."



Wind power
by Jerome a Paris (etg@eurotrib.com) on Sat Jan 22nd, 2011 at 10:17:50 AM EST
At the moment it's all about what's good for Fianna Fail, and clearly they don't want Cowen's mugshot on their election posters.  There is little debate about what is good for the country and almost none about the merits of the austerity budget which is to be implemented as part of the IMF/ECB deal.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jan 22nd, 2011 at 12:50:36 PM EST
[ Parent ]
Frank has noted that Brian Cowan came from a family of publicans and auctioneers. He appears to have done what he knew how to do. He kept the public feeling good as long as possible and then has auctioned off the state's assets. However it appears he was a better publican than auctioneer. He did not get much of a price for the state and society.

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 Jan 22nd, 2011 at 04:25:03 PM EST
[ Parent ]
Cowan should be given a Nobel. He would be a fitting companion for Obama.

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 Jan 22nd, 2011 at 04:25:52 PM EST
[ Parent ]
European Tribune - Cowengate (Updated)

Now some Fianna Fail dissidents are threatening to vote against the government in a parliamentary vote of No Confidence tabled by the Labour Party and due to be debated early next week. If Brian Cowen loses that vote he will have no option but to resign immediately and bring forward the general election currently announced for March 11th.

The significance of this is that there may then be no time to pass the Finance Bill which gives effect to the draconian budget agreed as part of the IMF/ECB deal.

Would they even have the votes to pass the Finance Bill with an election coming up? Are the Greens so suicidal?

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Sat Jan 22nd, 2011 at 01:46:00 PM EST
Probably yes, and Yes.

There is little public debate about any alternative to the IMF/ECB plan

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jan 22nd, 2011 at 01:58:21 PM EST
[ Parent ]
Three candidates step forward - The Irish Times - Sat, Jan 22, 2011
There will be a contest for the Fianna Fáil leadership after three senior members stepped forward as candidates following the resignation of Brian Cowen earlier today.

Former minister for foreign affairs Micheál Martin this afternoon paid tribute to the Taoiseach for his honesty and integrity and confirmed that he would be putting his name forward as a candidate to succeed him as party leader.

Minister for Finance Brian Lenihan also confirmed he will contest the leadership. He is expected to hold a press conference tomorrow.

This evening, Minister for Social Protection Éamon Ó Cuív told RTÉ Raidió na Gaeltachta that he would contest the leadership.

Minister for Tourism Mary Hanafin, who has previously expressed an interest in the role, has yet to say if she will stand.

Martin is favourite to win and is a personable and reasonably able politician who can communicate well and will help Fianna Fail recover a little when the election comes. He also has good relationships with colleagues in the EU and would probably be an astute negotiator.

Lenihan is probably too closely identified with the bank bail-out and financial melt-down to succeed.  O Cuiv is grandson of Fianna Fail Founder and former Taoiseach and president Eamonn De Valera - a direct line to the 1916 rising and Civil War.  He represents the antediluvian element of Fianna Fail. Mary Hanafin is a teacher and acts like one.

Whoever wins will end up leading a much diminished Fianna Fail party.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jan 22nd, 2011 at 03:39:37 PM EST
Europe profiting from our misery -- ex-NTMA boss - National News, Frontpage - Independent.ie
THE former chief executive of the NTMA, Dr Michael Somers, has slammed claims made by EU President Jose Manuel Barroso that Ireland has only itself to blame for its banking problems.

Asked by the Sunday Independent for his reaction to Mr Barroso's angry rebuke of Socialist MEP Joe Higgins' critique of the terms of the so-called EU/IMF bailout in Strasbourg last Wednesday, Dr Somers said: "I was quite surprised by the heat of his remarks, especially coming from a man from a country which itself has problems [Portugal], I was quite surprised at the level of hostility that he seemed to project towards an elected Irish representative [Joe Higgins], whether you agree with that representative of not."

Commenting on Mr Barroso's claim that the EU was in no way responsible for Ireland's difficulties, and was only now involved "as part of the solution", Dr Somers said that in lending us money our European partners "were only supporting themselves".

He said: "The money that they claim they are lending to us; that's money to replace the money that was lent to us on the interbank market by other banks within Europe. So all they are doing is giving the Irish banking system money to pay back other banks in Europe.

"No money has disappeared out of the system or anything. Whether they like it or not, if they wanted to do something about it, they should have looked at it earlier on to see why was the Irish banking system taking so much money out of the rest of the European banking system? If they knew about it, what did they do about it? And if they didn't know about it, why didn't they know about it? God knows the statistics were there."

Commenting on the punitive levels of interest being charged on the money being borrowed by Ireland under the €85bn EU/IMF bailout, Dr Somers said it wasn't the "behaviour you would expect of your European partners".

He contrasted the loan penalties now being imposed on Ireland by the EU with the subsidies its precursor, the EEC, had given to encourage us to join the European Monetary System (EMS) in 1978.

On this, he said: "I remember very clearly when the major countries in Europe were trying to set up the European Monetary System. They actually offered us interest subsidies at the time.

"They were so anxious for us to break the link with sterling and join the EMS that they gave us loans with an interest subsidy attached to them because they knew it would be difficult for us due to the close links we had with the UK.

"It was important for them politically to have credibility by having as many countries join the EMS as possible. Now when we get into this spot of bother, instead of giving us subsidies to help us get out of trouble, they charge us this huge penalty of 3 per cent. I mean it's not exactly the behaviour you would expect of your European partners, that they make a profit from the help they give you."

Returning to the issue of the blame, he added: "They shouldn't start blaming the Irish taxpayer, because that seems to be what Barroso is at.

"Maybe we did, or maybe some people did in respect of borrowings, but they [the ECB] must have known.

"Our central bank was no longer an instrument of Irish public policy. They emphasised their independence and that they were part of the European system of central banks, with their head office in Frankfurt."



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 10:23:24 AM EST
BBC News - Ireland's Green Party quits government of Brian Cowen

The Republic of Ireland's Green Party is pulling out of the ruling coalition, a move expected to bring forward the general election from 11 March.

The party's announcement, after a meeting in Dublin, follows a decision on Saturday by PM Brian Cowen to quit as leader of his Fianna Fail party.



Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun Jan 23rd, 2011 at 10:57:53 AM EST
Thanks for this - I have updated the top of the diary to reflect this.  Things are moving very rapidly at the moment.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 11:03:22 AM EST
[ Parent ]
I saw it about 20 minutes ago, but all the links then appeared to go back to old nothing new stories. think they were throwing the links up before theyd finished typing

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun Jan 23rd, 2011 at 11:05:46 AM EST
[ Parent ]
I think the odds of Biffo passing his confidence motion are slim indeed...

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 Jan 23rd, 2011 at 11:05:28 AM EST
[ Parent ]
The opposition parties are prepared to withdraw motion of no confidence if Biffo agrees to pass Finance Bill in a week and call elections immediately afterwards for Mid-February. Basically they want all the dirty work to be done before they get into office.  This strategy obscures all debate as to the actual merits of the IMF/ECB imposed Finance Bill in the first place.

Any renegotiation any new Government might attempt will only be post the fact of the major tranche of the austerity plan having been adopted and implemented.  It substantially reduces the national bargaining position if the ECB/IMF have already gotten most of what they wanted withour any quid pro quo on interest rates etc.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 02:25:31 PM EST
[ Parent ]
What a travesty.

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 Jan 23rd, 2011 at 06:57:12 PM EST
[ Parent ]
RTE Election (RTE_Elections) on Twitter
  1. Taoiseach also says the Finance Spokespersons will meet with the Minister for Finance tomorrow to talk about Fin Bill half a minute ago via web
    • Speaking in Portlaoise, Brian Cowen says he has no intention of resigning as Taoiseach #ge11 3 minutes ago via web
      • Taoiseach says as soon as the resignations are accepted by the President he will reassign the portfolios #ge11 4 minutes ago via web
        • Taoiseach has said he will arrange for the resignations of the Green Party Ministers to be forwarded to the President #ge11


        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Sun Jan 23rd, 2011 at 11:10:38 AM EST
        Padraig Reidy (mePadraigReidy) on Twitter
        Taoiseach says he has "no intention" of resigning. President definitely needs to get kettle on, then #ge11 #greens


        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Sun Jan 23rd, 2011 at 11:11:35 AM EST
        [ Parent ]
        Shane Ross: Warhorse Joe flattens Jose - Shane Ross, Columnists - Independent.ie

        JOE Higgins was in cracking form when he rose to speak in the European Parliament last Wednesday.

        The forum is hostile terrain for Joe but he is a master of guerrilla warfare. Nobody lobs more lethal grenades. And even if Joe expresses his views in the medieval language of "vassals" and "serfs", he sometimes hits the target bang on.

        It was wonderful to see him get right under the skin of European Commission President Jose Manuel Barroso. Indeed, it is a rare accolade for a little-known MEP to provoke the portly Portuguese plutocrat to anger.

        Joe was railing on about the banks, a subject on which he speaks plenty of good sense in language that is a trifle too ideological.

        His claim that Ireland's deal with the EU/IMF was merely a cute transfer of bad debts from banks to taxpayers is correct.

        And the old agitator rightly went on to denounce the national bailout as a tool to cushion the banks from the consequences of reckless speculation.

        Which it was. Europe's power houses are protecting their banks from the consequences of their reckless loans to Anglo Irish, Bank of Ireland and AIB.

        Shane Ross is an ex-stockbroker, Senator, financial journalist, and likely independent candidate in the General election.  He has been one of the few arguing for default - which is very effective as he is generally seen as a conservative posh prod Irishman speaking with a slightly Brit accent.

        Index of Frank's Diaries

        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 02:34:02 PM EST
        Shane Ross: Warhorse Joe flattens Jose - Shane Ross, Columnists - Independent.ie

        But I have a little uncomfortable news for Joe. He has strange bedfellows. In recent weeks, I spent a day in Geneva and another in London, seeking to find out what the ruthless investors in the markets felt about Ireland's deal with Europe and the IMF. Did our negotiators do well?

        The results were revealing.

        Far from congratulating Ireland on lifting itself out of the mire, far from castigating us for our economic insanity, they were stunned in disbelief.

        A vast majority of the traders to whom I spoke were in shock. They wanted to know why we had not defaulted. They understood the law of the jungle: if bankers lend to a high-risk client -- like Ireland -- they expect to pay the price; Ireland's Government have behaved like mugs. In short, they should have burned the bondholders. Instead, they capitulated to the demands of the big guns in Europe and threw the citizens to the wolves.

        Joe Higgins, the principled socialist, is in agreement with the free marketeers.

        Default was an option, but we bottled it.

        The traders were adamant: default would have been far better for the credit rating of the nation than the current endless doubts about the prospects for our solvency.

        Our failure to default means that, instead, we are constantly being downgraded, ensuring that we cannot borrow in the global markets.

        We are bankrupt. Let us default. Once we have settled with our creditors, we will rapidly rebuild confidence. Our credit rating will recover.

        Foreign investors are already circling the bombed-out investments of Ireland, bottom-fishing for bargains. Some are even wondering whether to buy Irish debt. If we default, there is only one way for confidence -- up.

        Optimists point at our US multinationals, still brimming with confidence as evidenced by Intel's $500m investment last week. US multinationals are ignoring the crisis in the public finances, confident that they can flourish inside a bankrupt state.



        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 02:47:14 PM EST
        [ Parent ]
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 23rd, 2011 at 07:40:02 PM EST
        These discussions about the financial relationships between the EU and the European countries are very interesting. We don't have that sort of thing between the US federal government and the states--because the states have little control of monetary affairs--and it is somewhat mind-bending to consider how it works...or doesn't work, in some cases...
        by asdf on Mon Jan 24th, 2011 at 09:51:23 AM EST
        Although there are financial games being played between the states and the Feds as well - usually at the expense of the most vulnerable.

        The financial governance of the EU is still primarily at a state level with the EU level only slowly emerging - with the Euro being the chief accomplishment to date but with little by way of supporting fiscal or monetary infrastructure - largely because of the nationalistic and neo-liberal proclivities of the major players.

        Index of Frank's Diaries

        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jan 24th, 2011 at 10:40:14 AM EST
        [ Parent ]
        BBC - Newsnight: Michael Crick: Gerry Adams makes British Parliamentary history

        Gerry Adams, it seems, has made Parliamentary history - British Parliamentary history. It appears that the Sinn Fein leader managed to resign as a Westminster MP last Friday without going through the traditional procedures.

        I wrote here a few weeks ago that if Adams planned to stand down as a Westminster MP, in order to stand for the Irish Parliament, he would have to go through the usual rigmarole whereby a resigning MP applies for an office of profit under the Crown - the British Crown.

        All rather embarrassing for the world's leading Irish Republican.

        A resolution of the House of Commons from almost 400 years ago - March 1624 - says an MP cannot directly resign their seat except by death, disqualification or expulsion



        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jan 24th, 2011 at 12:37:23 PM EST
        (update to your linked article)
        I was also advised that one way Adams might get round this without expressing allegiance to the British Crown in any form would be to turn up at the House of Commons and try to sit in the Chamber.

        He would then be automatically disqualified from the House on the grounds that he hasn't sworn the oath, and a writ would then be moved for a by-election in West Belfast.

        "The seat is vacated as if they were dead," I'm told.

        And what a drama it would be if Adams were to do that, and be ejected from the Commons.

        But since he refuses to take his seat... it would be funny if they actually let him in...

        But oddly enough :

        If Adams was elected to the Irish Parliament it would be no problem in British law for him to serve as an MP for the Irish and British Parliaments simultaneously. That was allowed by the Disqualifications Act passed in 2000.

        How about a Twitter campaign : Gerry Adams for Bailiff of the Chiltern Hundreds!

        It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

        by eurogreen on Tue Jan 25th, 2011 at 10:15:17 AM EST
        [ Parent ]
        Would he have to wear a fancy imperial uniform?

        Given he never took his seat, untaking it shouldn't be much of a problem!

        Index of Frank's Diaries

        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 25th, 2011 at 10:36:50 AM EST
        [ Parent ]
        You would think so, but he's elected and his voters have a right to be represented so the rules say you can't quit, once your voters have chosen. whether you've done the proper post vote paperwork or not.

        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Tue Jan 25th, 2011 at 02:20:06 PM EST
        [ Parent ]
        But I suppose the voters wouldn't mind if he quits to become the Steward of the Manor of Northstead....
        by gk (g k quattro due due sette "at" gmail.com) on Tue Jan 25th, 2011 at 03:24:01 PM EST
        [ Parent ]
        More likely the Earl of Ardoyne...

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 25th, 2011 at 04:16:13 PM EST
        [ Parent ]
        From Wiki it would appear that he can hold both the seat in Westminster and in Dublin simultaneously.

        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 Tue Jan 25th, 2011 at 04:57:57 PM EST
        [ Parent ]
        More details.
        But under parliamentary rules dating back to 1624, an MP who wishes to quit has to apply for one of a number of obscure, paid crown posts: Crown Steward and Bailiff of the three Chiltern Hundreds of Stoke, Desborough and Burnham or Steward of the Manor of Northstead.

        [...]

        The Speaker's office said there was one alternative route - or piece of political pantomime - open to Sinn Féin MPs, who have refused to take the oath of allegiance to the crown, as well as their seats in Westminster.

        If an elected MP who has not sworn the oath attempts to take his or her seat in the Commons during a debate, then that would also formally lead to their ejection from Westminster.

        Under the Parliamentary Oaths Act 1865, "if the MP sits in the house without having taken the oath" then he would lose his seat, the Speaker's Office confirmed. Sinn Féin said Adams would not participate in such a political charade.

        by gk (g k quattro due due sette "at" gmail.com) on Tue Jan 25th, 2011 at 03:23:11 PM EST
        [ Parent ]
        I am filled with joy at the prospect of Irish TDs (Members of Parliament) referring to Adams as the British MP or the Member from Westminster...

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 25th, 2011 at 04:19:53 PM EST
        [ Parent ]
        If he resigned to become Steward of the Manor of Northstead they could also have fun, as he would be following in the footsteps of Ian Paisley and Enoch Powell, even though the former only held the position for a few minutes (seconds?) on 17/12/1985, being replaced by lots of other Irish MPs resigning one after the other.
        by gk (g k quattro due due sette "at" gmail.com) on Tue Jan 25th, 2011 at 04:23:43 PM EST
        [ Parent ]
        Adams resigns from Westminister - The Irish Times - Wed, Jan 26, 2011
        At Commons question time today, David Cameron told MPs that Mr Adams had agreed to become "baron of the Manor of Northstead".

        His confirmation came after DUP spokesman Nigel Dodds said: "You may be aware that one of the members elected to this House has decided to emigrate - and you may want to chalk that up as one of your achievements.

        "The said Member for West Belfast, Gerry Adams, seems to be embarrassed about applying for an office under the Crown, an office for profit - although he has shown no such embarrassment of profiting from his office in this House for many years at taxpayers' expense."

        "When will you deliver on your pre-election pledge to hard-pressed taxpayers that you will abolish parliamentary money for parliamentary purposes going to those who do not fulfil their parliamentary duties?"

        Mr Cameron replied: "First of all, just in case people haven't caught up with the news, you are quite right that the Honourable Member for West Belfast has accepted an office for profit under the Crown, which of course is the only way you can retire from this house."

        To laughter, he added: "I'm not sure that Gerry Adams will be delighted to be a baron of the Manor of Northstead. But nonetheless I'm pleased that tradition has been maintained.



        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jan 26th, 2011 at 09:27:00 AM EST
        [ Parent ]
        Even though it's an office "for profit", all references I've seen to it claim that the renumeration is "nominal". But nobody gives details: is their notion of "nominal" the same as ours?

        Other Barons of the Manor of Northstead before Adams include, besides Paisley and Powell, William Fox, Anthony Eden, Peter Mandelson and Boris Johnson. The most recent Baron, Michael Martin, managed to keep his job for well over a year before being kicked out by Adams.

        by gk (g k quattro due due sette "at" gmail.com) on Wed Jan 26th, 2011 at 09:45:35 AM EST
        [ Parent ]
        the remunerations was probably set 400 years ago at 5 guineas, 3 shilling, 4 pence and three farthings...

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jan 26th, 2011 at 10:12:12 AM EST
        [ Parent ]
        normally he'd be a farmer : i.e. he makes the peasants pay their rent and he pays a fixed annual amount to the Crown.

        (Still think Bailiff of the Chiltern Hundreds is a better title for him. They might be Republican martyrs.)

        It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

        by eurogreen on Wed Jan 26th, 2011 at 10:50:33 AM EST
        [ Parent ]
        Not much rent. According to Wikipedia,
        The Manor of Northstead was once a collection of fields and farms in the parish of Scalby in the North Riding of Yorkshire in England. By 1600, the manor house had fallen into disrepair and was occupied only by a shepherd. At present the Manor is part of the Barrowcliff area of the town of Scarborough.
        by gk (g k quattro due due sette "at" gmail.com) on Wed Jan 26th, 2011 at 03:20:38 PM EST
        [ Parent ]
        Adams not resigned to being appointed officer of the crown - The Irish Times - Thu, Jan 27, 2011

        SINN FÉIN president Gerry Adams, who tendered his resignation as an MP last week, has been appointed without his agreement as crown steward and bailiff of the manor of Northstead by British chancellor of the exchequer George Osborne.

        Under 400-year-old Westminster rules, an MP who wants to quit must temporarily occupy the Northstead sinecure, or become crown steward and bailiff of the three Chiltern Hundreds of Stoke, Desborough and Burnham.

        The Treasury in London said yesterday that Mr Adams's one-line resignation letter was being treated as an application for one of the crown offices and dealt with accordingly.

        "Gerry Adams has said publicly that he is resigning from parliament," a spokesman said.

        "Consistent with long-standing precedent, the chancellor has taken this as a request to be appointed the steward and bailiff of the manor of Northstead and granted the office."

        In the House of Commons yesterday, prime minister David Cameron could not hide his mirth as he told Democratic Unionist MP Nigel Dodds about the appointment of the republican leader to the nominally-paid position.

        "First of all, just in case everyone has not caught up with the news, the right honourable gentleman is quite right that the honourable member for Belfast West has accepted an office of profit under the crown, which is, of course, the only way to retire from this House.

        "I am not sure that Gerry Adams will be delighted to be a baron of the manor of Northstead, but none the less, I am pleased that tradition has been maintained," he said, to laughter from MPs on both sides of the House.

        Mr Adams, however, later pointed out that he had not applied for the crown sinecure and nor had he accepted the appointment, as Mr Cameron had told MPs.

        "I simply resigned. I was not consulted, nor was I asked to accept such an office. I am an Irish republican. I have had no truck whatsoever with these antiquated and quite bizarre aspects of the British parliamentary system," he said.

        Mr Adams is running in Louth in the general election. There is no legal bar on someone being an MP and a TD at the same time.

        A Downing Street spokesman said last night Mr Cameron was standing by remarks he made during prime minister's questions yesterday regarding Mr Adams's status.

        But he said Mr Cameron's private secretary had apologised to Mr Adams for the fact that news of the appointment had been made public without his foreknowledge.

        Even if he does not want to be the temporary holder of the post of chief steward and bailiff of the manor of Northstead, Mr Adams is in good historical company, since it was previously held by the son of Daniel O'Connell, also named Daniel, in 1863 and by Land League founder Michael Davitt in 1899.



        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jan 26th, 2011 at 08:24:52 PM EST
        [ Parent ]
        Given a choice between Cameron and Adams, who do you believe? The latest from Adams.
        In a detailed statement, Adams said: "Mr Cameron has claimed that 'the Honourable Member for West Belfast has accepted an office for profit under the crown'. This is untrue. I simply resigned. I was not consulted nor was I asked to accept such an office. I am an Irish republican. I have had no truck whatsoever with these antiquated and quite bizarre aspects of the British parliamentary system.

        "Mr Cameron's announcement that I have become Crown Steward and Bailiff of the Manor of Northstead, wherever that is, is a bizarre development. I am sure the burghers of that manor are as bemused as me. I have spoken to the prime minister's private secretary today and he has apologised for today's events.

        Maybe one can be appointed Bailiff of the manor against your will and it still counts?
        by gk (g k quattro due due sette "at" gmail.com) on Wed Jan 26th, 2011 at 12:32:17 PM EST
        [ Parent ]
        Presumably not, since that would be way too obvious a loophole for kicking people out of the House of Commons.

        On the other hand, it is at least conceivable that a letter of resignation could be "interpreted" as an application of one of the offices used to disqualify MPs.

        Though personally I don't quite understand why he doesn't just show up and try to vote without taking the oath. That seems like the sort of stunt he should find it amusing to pull.

        - Jake

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

        by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 26th, 2011 at 03:02:04 PM EST
        [ Parent ]
        Adams not resigned to being appointed officer of the crown - The Irish Times - Thu, Jan 27, 2011

        SINN FÉIN president Gerry Adams, who tendered his resignation as an MP last week, has been appointed without his agreement as crown steward and bailiff of the manor of Northstead by British chancellor of the exchequer George Osborne.

        Under 400-year-old Westminster rules, an MP who wants to quit must temporarily occupy the Northstead sinecure, or become crown steward and bailiff of the three Chiltern Hundreds of Stoke, Desborough and Burnham.

        The Treasury in London said yesterday that Mr Adams's one-line resignation letter was being treated as an application for one of the crown offices and dealt with accordingly.

        "Gerry Adams has said publicly that he is resigning from parliament," a spokesman said.

        "Consistent with long-standing precedent, the chancellor has taken this as a request to be appointed the steward and bailiff of the manor of Northstead and granted the office."

        In the House of Commons yesterday, prime minister David Cameron could not hide his mirth as he told Democratic Unionist MP Nigel Dodds about the appointment of the republican leader to the nominally-paid position.

        "First of all, just in case everyone has not caught up with the news, the right honourable gentleman is quite right that the honourable member for Belfast West has accepted an office of profit under the crown, which is, of course, the only way to retire from this House.

        "I am not sure that Gerry Adams will be delighted to be a baron of the manor of Northstead, but none the less, I am pleased that tradition has been maintained," he said, to laughter from MPs on both sides of the House.

        Mr Adams, however, later pointed out that he had not applied for the crown sinecure and nor had he accepted the appointment, as Mr Cameron had told MPs.

        "I simply resigned. I was not consulted, nor was I asked to accept such an office. I am an Irish republican. I have had no truck whatsoever with these antiquated and quite bizarre aspects of the British parliamentary system," he said.

        Mr Adams is running in Louth in the general election. There is no legal bar on someone being an MP and a TD at the same time.

        A Downing Street spokesman said last night Mr Cameron was standing by remarks he made during prime minister's questions yesterday regarding Mr Adams's status.

        But he said Mr Cameron's private secretary had apologised to Mr Adams for the fact that news of the appointment had been made public without his foreknowledge.

        Even if he does not want to be the temporary holder of the post of chief steward and bailiff of the manor of Northstead, Mr Adams is in good historical company, since it was previously held by the son of Daniel O'Connell, also named Daniel, in 1863 and by Land League founder Michael Davitt in 1899.



        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jan 26th, 2011 at 08:26:12 PM EST
        [ Parent ]
        'Crucial' that Ireland passes bailout bill before vote: EU
        It is "crucial" that Ireland passes its finance bill before new elections, the European Commission said Monday, a day after the ruling coalition collapsed in Dublin.

        It is important for Ireland's stability and credibility that this finance bill is passed soon," said Amadeu Altafaj, spokesman for EU economic affairs

        commissioner Olli RehnOlli Rehn.

        The finance bill is crucial to ensuring the 2011 budget is implemeted as it was agreed in the EU/IMF programme," he said of the terms and conditions behind a 67.5-billion-euro ($92-billion) international bailout sealed before Christmas.

        Ireland's political parties were in crisis talks Monday, following the dramatic withdrawal of the Green party from the coalition on Sunday.

        The opposition demanded that the government also bring forward elections and gave embattled Prime Minister Brian CowenBrian Cowen a deadline of Friday to comply or to face a no-confidence vote.

        Altafaj said he was "confident" that a "large consensus" among Ireland's parties would hold to enable the bill to become law before voters are asked to pass judgment, which would be seen as considerably risky in Brussels after rejection of the European Union's Lisbon treaty in a past referendum.



        Delays on the Irish rescue could also throw back into turmoil the EU's attempts to soothe markets worried about wider eurozone debt levels and a

        patchwork political response to-date.

        Can't have elections halt shock treatment.

        A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

        by A swedish kind of death on Mon Jan 24th, 2011 at 12:55:52 PM EST
        As we know, European Tribune - Cowengate (Update 2)
        A furious Mr Barroso [blamed] Irish banks and lax regulation for Ireland's problems.

        "To the distinguished member of this Parliament who comes from Ireland, who asked a question suggesting that the problems of Ireland were created by Europe, let me tell you: the problems of Ireland were created by the irresponsible financial behaviour of some Irish institutions, and by the lack of supervision in the Irish market.

        "Europe is now part of the solution, it is trying to support Ireland. But it was not Europe that created this fiscally irresponsible situation, and this financially irresponsible behaviour," he said.



        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 Jan 24th, 2011 at 01:05:55 PM EST
        [ Parent ]
        Amadeu Altafaj would have been better advised to keep his trap shut. His remarks were prominently reported in Irish media and contributed to a sense that the EU is poking its nose into domestic Irish politics. People are very sensitive about their democratic prerogatives and regardless of whether his remarks are in some sense correct or agreed with - they contribute to the sense of loss of Sovereignty - and being bossed by others.  Expect a growing anti-EU vote if we ever have another referendum on an EU treaty.

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jan 24th, 2011 at 02:04:34 PM EST
        [ Parent ]
        Asked whether he felt these comments were helpful, Mr Juncker said: "In my opinion, certain people would do better to think before they speak ...sometimes they would do better to keep their mouths shut."
        (said on a different occasion, but still one of the memorable quotes from this crisis)

        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 Jan 24th, 2011 at 02:51:38 PM EST
        [ Parent ]
        He also said: "If ridicule could kill, there would be bodies piling up in the streets in Brussels"

        "People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them." - Jean Monnet
        by Melanchthon on Mon Jan 24th, 2011 at 03:01:21 PM EST
        [ Parent ]
        Sky News Newsdesk (SkyNewsBreak) on Twitter
        Sky sources: Irish government agrees to bring election forward to February 25


        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jan 24th, 2011 at 01:39:07 PM EST
        Probable but not yet absolutely certain.  Calling the election is still the Taoiseach's prerogative.  But it looks like that date is the quid quo pro for Labour and Fine Gael "facilitating" passage of the austerity budget.

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jan 24th, 2011 at 02:07:07 PM EST
        [ Parent ]
        Would that someone or some party would 'de-facilitate' the passage of the financial bill, or make it subject to re-negotiation by the new parliament. This is like watching a train wreck filmed at 1000 frames/second and played back at one frame an hour.

        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 Mon Jan 24th, 2011 at 03:32:52 PM EST
        [ Parent ]
        Sinn Fein and the United Left Alliance (which currently has one MEP - Joe Higgins - and no members of Parliament) are the only parties to oppose "facilitation" of the passage of the bill and who want the general election to be called today.  Labour claims to be against the Budget - and will vote against it - whilst withdrawing its no-confidence motion so that it can be voted through by others.  That way they won't have to introduce an austerity budget of their own if elected to Government and blame all the current cuts on Fianna Fail.

        However that is only the current budget which implements 6 Billion of the 18 Billion in cuts demanded by the IMF/ECN as part of the deal with the next 12 Billion to be implemented over the next three years. Presumably it is those 12 Billion in cuts Labour will seek to negotiate on.

        The really scary thing is that the IMF/ECB deal was effectively negotiated by civil servants because the Ministers were distracted by other events and never really got involved.

        Thus the most horrendous deal in the history of the state was agreed by the Government without any real negotiation...

        Index of Frank's Diaries

        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jan 24th, 2011 at 05:26:20 PM EST
        [ Parent ]
        Poor Biffo:
        According to something I heard on the radio earlier, the election date [of March 11] is just late enough that Cowen won't be the shortest serving Fianna Fail Taoiseach ...
        (Colman)

        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 Jan 24th, 2011 at 02:49:01 PM EST
        [ Parent ]
        RTE Election (RTE_Elections) on Twitter
        Brian Dowling tells #newsatone that polling in Dublin suggests that FF are in the low teens, which will make their #ge11 campaign difficult.


        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Tue Jan 25th, 2011 at 08:45:05 AM EST
        RTE Election (RTE_Elections) on Twitter
        Noel Treacy says voters are not telling people conducting the polls about their true voting intentions #ge11 #newsatone 18 minutes ago Favorite Retweet Reply » RTE_Elections RTE Election Noel Treacy says he believes Fianna Fáil will do well in #ge11 and 'surprise everyone' #newsatone


        Any idiot can face a crisis - it's day to day living that wears you out.
        by ceebs (ceebs (at) eurotrib (dot) com) on Tue Jan 25th, 2011 at 08:46:14 AM EST
        [ Parent ]
        If they elect Michael Martin and conduct an even moderately competent campaign, I wouldn't be too surprised to see them hit 20% in the actual poll.  Their support is predominantly elderly and the elderly have a high differential turnout.  For many of them to vote than FF would be unthinkable - as it was for their fathers before them...

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 25th, 2011 at 10:39:49 AM EST
        [ Parent ]
        But it was not Europe that created this fiscally irresponsible situation, and this financially irresponsible behaviour," he said.

        Only 2 yrs ago they celebrated that Ireland was a "celtic tiger" etc. and a model to all new members. Now they are "irresponsible." This shows how clueless these people are.

        by kjr63 on Tue Jan 25th, 2011 at 03:44:02 PM EST
        Europe set up the economic incentives for it by constraining public deficits and debt and demanding GDP growth while leaving private debt unconstrained, refusing to harmonize taxation and contain within-EU trade balances, and running a low interest rate policy.

        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 Tue Jan 25th, 2011 at 03:50:59 PM EST
        [ Parent ]
        And though these things are undeniably true, those who set the policies and constraints will deny responsibility, as they will self-righteously claim that these outcomes were not their intention.

        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 Tue Jan 25th, 2011 at 05:04:09 PM EST
        [ Parent ]
        More than that, they will claim that these outcomes do not follow from those policies.

        Which is, you know...

        - Jake

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

        by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 26th, 2011 at 12:41:21 AM EST
        [ Parent ]
        Well:
        I also blame the ECB, because when it started functioning it got it in its head to carry out a tremendously expansive policy, pushed by Germany and France.

        France and Germany were then convinced that what Europe needed was fuel because its two economies did, and in truth that was a disaster. And for countries such as Spain, Ireland or like Portugal or like Greece which were countries coming out of a phase of rather slow growth, getting into such a strong expansive phase was very dangerous, but well, I said it at the ECB council until I was fed up. We were in something that had no way out. But well, as it happens in these instances of expansion, they didn't listen to me".

        ...

        Various degrees of seriousness and various policy measures. Where is a coordinated action by the EU? "Each country must cope as best it can, and the whole, an arrangement for the whole of Europe [will come] step by step. I don't think Europe is in a position, for the moment, to tackle the issue jointly. It would be good for the ECOFIN to have more power, it would be good for the ECB not to have the ideas it has and to be an institution with a more general vision".

        (That would be Luis Ángel Rojo, Spain's central banker in 1992-2000, that is during the convergence to the Euro and the first couple of years of it before it circulated as currency; as well as the man responsible for Spain's counter-cyclical bank capital regime which he claimed was not liked by the ECB...)

        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 Wed Jan 26th, 2011 at 05:05:22 AM EST
        [ Parent ]
        Ireland has never even had a member on the ECB Board. so I can we expect it to represent Irish or peripheral European interests?  It was never intended to.  And yet the ECB is now the most important institution in the EU.  Democratic deficit anyone?

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jan 26th, 2011 at 07:10:29 AM EST
        [ Parent ]
        You doth protest too much

        ECB: Governing Council

        The Governing Council is the main decision-making body of the ECB. It consists of
        • the six members of the Executive Board, plus
        • the governors of the national central banks of the 17 euro area countries.
        On the other hand, there have only ever been 13 members of the Executive Board so obviously some countries will never have been represented on it, without this implying a "democratic deficit".

        In fact, you don't have to be in the Eurozone to take part in ECB governance:

        ECB: General Council

        The General Council comprises
        • the President of the ECB;
        • the Vice-President of the ECB; and
        • the governors of the national central banks (NCBs) of the 27 EU Member States.
        In other words, the General Council includes representatives of the 17 euro area countries and the 10 non-euro area countries.

        The other members of the ECB's Executive Board, the President of the EU Council and one member of the European Commission may attend the meetings of the General Council but do not have the right to vote.




        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 Wed Jan 26th, 2011 at 08:16:03 AM EST
        [ Parent ]
        Point taken, but in practice it appears to be run by the Franco-German axis.  To some extent it is understandable that the largest economies will call the shots, but it also means there is no institutional mechanism in place to correct core-periphery imbalances.

        Index of Frank's Diaries
        by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jan 26th, 2011 at 09:39:21 AM EST
        [ Parent ]
        In any system of international trade without Keynes'-style negative feedback on imbalances, power accrues to the surplus countries.

        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 Wed Jan 26th, 2011 at 09:43:16 AM EST
        [ Parent ]


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