Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.

We aren't where we think we are (revised 6/2/11)

by Frank Schnittger Sun Feb 6th, 2011 at 07:00:00 AM EST

The phrase "We are where we are" has probably become the most dominant and most annoying catch phrase of the Irish general election campaign.  It is used even by those who argue that the Government Bank Guarantee was ill-advised; that the ECB/IMF deal was poorly negotiated by a distracted Government; and that the consequent austerity plan will be ruinous for the Irish economy and society. It is used to argue that nevertheless, the Irish electorate have no choice but to "suck it up" and carry on as best we can in the severely diminished circumstances that are its inevitable outcome.

Nothing could be further from the truth. There is nothing irreversible about the bank guarantee:  Governments can and do restructure sovereign debts all the time.  Insolvent banks can and often are "restructured" without any loss of ongoing functionality for the general public and business sector. A central function of central banks is to provide liquidity to banks and economies which are experiencing a crisis of market confidence.

Neither is it impossible to renegotiate the ECB/IMF deal.  Of course all the players will rehearse their opening negotiating positions in advance trying to safeguard their own positions as much as possible.  But there are a few irreducible truths to which all must ultimately comply: Debts which cannot be repaid, will not be paid.  It is better to default before the real economy implodes completely, rather than afterwards, and ultimately all the players have a stake in avoiding a spiralling descent into recession under an unsustainable burden of debts, interest payments, taxes and diminishing economic activity.


This crisis is not about retirement ages, constitutional brakes on sovereign indebtedness, or corporation taxes as Chancellor Merkel and the neo-liberals in her Government would have us believe. Neither is it about excessive public expenditures or health and social welfare benefits, although inefficiencies in public service provision can and should be addressed in any case.

It is about BOTH private creditors and debtors who lent and borrowed irresponsibly. It is about regulators, both Irish and European, who failed to do their jobs properly. It is about a common Eurozone currency area which does not have the fiscal mechanisms in place to manage structural and regional imbalances.

Above all, it is about a government that didn't and apparently still doesn't understand that the public taxpayers should never be put on the hazard for the private losses of investors and speculators; that sovereign debts are routinely restructured when they become unsustainable; that insolvent banks can be restructured and separated from their bad assets whilst traditional retail and business banking activities flourish; and that it is the job of central banks to step in and provide liquidity when private markets lose confidence. That is what "quantitative easing" as practised by the US Federal Reserve is all about.

What is required now is that the Irish people and incoming Government do not lose their nerve and repeat the mistakes of the outgoing Government.  If necessary the Irish Central Bank can, and indeed already has issued new Euros to keep the banks liquid.  There is no reason why the Irish banks cannot continue to provide basic banking services until such time as their balance sheets have been repaired. The ATMs can and will continue to work.

Moreover if the ECB wants itself and foreign banks and investors to be repaid at all, it has to agree to a debt restructuring, schedule of repayments, and interest rates which are sustainable by the real Irish economy.  All else is political posturing by those with an ideological agenda.  

The current IMF/ECB plan is based on false assumptions and will fail sooner or later.  It is best for all concerned that it be fixed sooner rather than later.  Irish Growth rates have already been down graded from those assumed in the plan.  Once the current (and three future!) austerity budgets kick in, there won't even be any spoils for those who think they are the victors in the current débâcle to fight over.  The patient will have died: Irish people, enterprise and jobs will have migrated to the US, Canada, Australia and the Far East. Europe, as well as Ireland, will be the loser.

What we need is a Government with real balls and the ability to negotiate properly. Such negotiations cannot be delegated to civil servants and the Governor of the Central Bank as happened with the ECB/IMF deal. We live in a Democracy, not a Bankocracy; in a European Union, not a new German Reich. We will have to negotiate with our EU partners as equals at head of Government level. It is thus important that our next Government is led by Ministers who are both serious thinkers and heavyweight negotiators.

We cannot be kicked out of the EU or Eurozone, and however much Merkel et al may wish to create a two speed Europe, they cannot do so without our agreement. If we are forced to default because they sought to impose punitive terms they will only have themselves to blame. In the meantime, it is to be hoped that all European leaders quickly get what we in Ireland call some "cop on". They need us to thrive more than they might think, and much more than the majority of our leaders seem to realise.

We aren't where we think we are at all - a nation without liquidity, resources, access to markets or friends. Our European partners need us to bail out their banks (who foolishly lent to our even more foolish banks) and to keep the Eurozone functioning and stable. No one has an interest in forcing a default or an implosion of the Irish economy. The rise in Euroscepticism such an implosion would cause would also place any future Treaty changes requiring an Irish referendum in jeopardy. What has been lacking all round, is clear-sighted analysis, vision and leadership. Ireland would be doing its partners a favour if we helped to rectify that deficit.

Display:
My apologies for dumping this hastily concocted rant on ET.  I absolutely have to run, but thought I would put the bones of an LTE together on display for public comment - to complement the work being done by others on OP ed pieces etc.  I will attempt to edit and take on board any comments on my return tomorrow afternoon.  Please feel free to plagiarise, critique, condemn.  It really is a rush job.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Feb 5th, 2011 at 09:05:29 AM EST
You sell yourself short ;-)

It's an excellent description of the pitfalls Ireland faces and how it must avoid them.

- 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 10:04:49 AM EST
[ Parent ]
A succinct rant is better than an interminable rant - besides the fact that you have captured the situation quite well.

paul spencer
by paul spencer (spencerinthegorge AT yahoo DOT com) on Sat Feb 5th, 2011 at 11:49:13 AM EST
[ Parent ]
And I am thinking that a series of LTEs would be more effective -- and that time is running out.

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 Thu Feb 10th, 2011 at 10:42:33 AM EST
[ Parent ]
I don't know if the op-ed based on JakeS's diary is finalized yet, but a condensed version of the first two paragraphs would make a great intro. Perhaps:

The phrase "We are where we are" is the most annoying catch phrase of the campaign. It is used by those who argue that we must "suck it up" and carry on despite the flawed Government Bank guarantee, the unfair ECB/IMF deal, and the ruinous austerity plan.

Nothing could be further from the truth. We aren't where we think we are. By carefully following a sensible negotiation strategy, Ireland can avoid a long period of stagnation and provide both resolution to the bank debt crisis and position the country for future prosperity.

That last line could probably use some work, but you see where I'm going with it. If you like it, feel free to use without attribution. If it sucks, well, no big deal.

And the world will live as one

by Montereyan (robert at calitics dot com) on Sat Feb 5th, 2011 at 11:17:44 PM EST
[ Parent ]
the ECB/IMF deal was poorly negotiated by a distracted Government

And by just what were they distracted? It would seem that this deal should have been the top priority. Perhaps they were distracted by the same thing that led them to extend the disastrous bank guarantees to begin with? By their long time personal and institutional relations with those who used to own the banks? Or were they distracted by the thought of how they were betraying the trust of the Irish people?

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 10:54:30 AM EST
Quote marks around the word distracted would be an economical way to imply much of the essence of the above remark.

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 10:58:54 AM EST
[ Parent ]
You might find this hard to believe - I do - but as far as I can determine the actual deal was negotiated by our central bank Governor and the top civil servant in the Dept. Finance with minimal political input or involvement.  It was a deal by bankers/administrators for bankers/administrators.  Not surprisingly the emphasis was on legalities rather than realities.  

Quite how the Minister for Finance and Taoiseach, not to mention the cabinet were absent from the substantive negotiations of quite the most import deal in the history of the state is beyond belief - and doesn't even seem to have entered public consciousness or political controversy yet.  It illustrates the degree to which Ireland and the EU have become international finance run entities rather than democracies.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Feb 6th, 2011 at 05:52:42 AM EST
[ Parent ]
what do we have regulators for, if they are so easily captured, and have no moral hazard?

that to me is the achilles heel to go for.

it's not about blame per se, though there's plenty of that, it's the total impunity and relative anonymity they enjoy.

i understand the 'set a thief to get a thief' logic, but with no price to pay personally for their fake 'oops!', and the convenience of needing revolving door appointments, because no lay person understands the devious logorrhea and arcane numericals these scams are couched in, but these people have betrayed millions by their convenient incompetence at their jobs, jobs which destroy quality of life for the many, enriching only a few.

who are they, why aren't their faces and names on front pages, why aren't they accountable, hiding behind their disposable stooge politicians?

they are worse than spies selling state secrets, no better than common criminals, yet when did one have to grovel even a little bit?

the present ones should be quaking, yet i have the impression they are continuing their selfish, corrupt games, while marionette pols go down like flies.

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Sun Feb 6th, 2011 at 07:02:19 AM EST
[ Parent ]
"what do we have regulators for, if they are so easily captured, and have no moral hazard?"

Ah, that would be because when they cannot be so easily captured, a fake scandal is created in order to get rid of them.
After which of course, capture becomes a pre-condition for nomination.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Feb 7th, 2011 at 02:34:04 AM EST
[ Parent ]
Quite how the Minister for Finance and Taoiseach, not to mention the cabinet were absent from the substantive negotiations of quite the most import deal in the history of the state is beyond belief - and doesn't even seem to have entered public consciousness or political controversy yet.

Seems a good time to use this issue to give the pot a vigorous stir, though possibly in a separate LTE. My suggestion is that three factors entered into this:

  1. Cowan and other FF politicians were terrified of this issue and wanted to keep their fingerprints off of it to the extent possible.

  2. They have too little understanding of economics to deal effectively with problems of international finance.

  3. This is justified by the neo-liberal/neo-classical economics myth that economics is a separate realm from politics and has to be allowed to function according to its own laws -- the better for the economy to eat the society and pass the "profits" to the wealthy. "Filthy lucre" indeed!


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 03:48:13 PM EST
[ Parent ]
They're all demented at this stage.

On top of their deep rooted denial of responsibility, the Finance Minister is very sick with cancer, the Foreign Minister - now leader of Fianna Fail - had lost a daughter a few weeks before and it was alleged to me that the Taoiseach had taken to wandering around his department asking if anyone - including the porters and cleaners - had any good ideas. Those are the rumours I feel I can report. There are nastier ones.

The ex-Taoiseach Ahern says that his biggest regret is not building the fucking sports stadium he had conceived of as his monument. Oh, and that no-one told him about the upcoming bank problems that had been discussed to death on ET.

by Colman (colman at eurotrib.com) on Mon Feb 7th, 2011 at 08:29:30 AM EST
[ Parent ]
We need to recruit administration cleaners as spokespersons...

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 Feb 7th, 2011 at 10:03:17 AM EST
[ Parent ]
Eurointelligence: Aftermath of a "surreal" summit
Leader of Irish Labour Party calls Jean-Claude Trichet a civil servant

Reuters picked up a nice quote from Eamon Gilmore, the leader of the Irish Labour Party, and likely to be the next Irish deputy PM. In an Irish radio interview, he said about Jean-Claude Trichet, who rejects a renegotiation of the Irish loan agreement with the EU/IMF:  "Mr. Trichet is a European civil servant. He's a very important European civil servant and any civil servant will of course always stick to the plan that is there at the moment, just as he will stick to the plan that is renegotiated when it is renegotiated."



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 04:50:11 AM EST
There is a view in Ireland that we are seriously pissing off all the people who matter in the EU and that they will be doing us no favours when the next Government is formed.  This could get ugly if a Government is forced into a "backs to the wall" type situation.  Unfortunately End Kenny is just the type of leader you would NOT want in any serious argument, negotiation, or bun fight.

Meanwhile the Irish Independent is running front page stories using a bogus company to do bogus polls and drawing even more bogus conclusions from those polls in order to try to create a bandwagon for a single party Fine Gael Government.  Then all would be resolved within the cosy club of the EPP.

This is not shaping up well.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 7th, 2011 at 08:05:24 AM EST
[ Parent ]
Where do the (Sunday) Independent's loyalties lie these days? I couldn't tell if that was meant to be an attempt to whip up support for single party FG government or an attempt to sabotage it.

But we're screwed anyway, since I don't see anyway to avoid an even more ideologically conventional FG government, at best moderated by Labour - at the cost of what sliver is left of Labour's soul - to be followed by a majority Fianna Fail government in about 18 months when everyone has forgotten about the mess they got us in. You think markets have short memories? Try voters.

This is classic however:

Whilst troubled Labour leader Eamon Gilmore secures a similar vote in Dun Laoghaire, the low first preference vote secured by Ivana Bacik means it is low-profile FG candidates Sean Barrett and Mary Mitchell O'Connor, rather than the Labour dream team, who are poised to win two seats in the constituency.

Meanwhile, Fine Gael, courtesy of Enda Kenny's stunning de Valera-style 25,000-strong vote, is now odds-on to win four out of the five seats in Mayo.

A number of other political heavyweights who are poised to rack up huge personal votes include Eamon Gilmore, Simon Coveney and Fergus O'Dowd, who on today's figures will top the poll in Louth with more than 16,000 first preferences.

Eamon Gilmore the troubled Labour leader and political heavyweight whose personal vote will rival that of Saint Enda's. They don't even expect their readers to remember two sentences ago - probably expect them to be too distracted by the scantily clad young women on page 3.

I fucking hate the Sunday Independent. Have for years.

by Colman (colman at eurotrib.com) on Mon Feb 7th, 2011 at 08:18:50 AM EST
[ Parent ]
The last time the SINDO frontpaged a Quantum poll - it was 1 200 respondent phone poll to landlines.  The margin of error of such a poll is astronomical - if done properly - and there was no mention of any of this when they discussed small movements ion trends - they quoted FF at 8% and gave no figures for the other parties!

The current constituency polls are also apparently phone polls to landlines only (excl. the vast majority of younger voters who have mobiles only).

And the analysis crap.  On the figures given Ivana Bacik will easily beat Mary Mitchell O'Connor (FG) assuming a reasonable transfer rate from Gilmore and also more transfers from Boyd Barrett and Ciaran Cuffe.

The last seat is actually between Mary Hanafin (favourite) and Mary Mitchell O'Connor on those figures, but that doesn't fit the FG landslide headline.

Like you I wasn't sure if John Drennan is for real - doing his editors bidding whilst knowing he might well provoke a backlash and the opposite result.

I would be interested in doing an expose on "Quantum Research".  Online I can find no more than an address at the Arthur Cox building. I never buy the SINDO - but do you know if the print edition gave any more details on the methodology of the polls?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 7th, 2011 at 08:44:49 AM EST
[ Parent ]
"it was 1 200 respondent phone poll to landlines " should have read a 200 respondent poll!

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 7th, 2011 at 08:45:45 AM EST
[ Parent ]
Mmm 200 now THAT's ridiculous.


Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Mon Feb 7th, 2011 at 09:13:50 AM EST
[ Parent ]
especially when the pollster is unknown, the methodology largely unknown.  What kind of news editor makes a story on that data (containing no MOE caveats) his front page lead?  The poll was just a cheap vehicle for the "scientification" of old fashioned prejudice.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 7th, 2011 at 09:23:42 AM EST
[ Parent ]
Not like the favours they did us last time around when they were so beneficent?
by Colman (colman at eurotrib.com) on Mon Feb 7th, 2011 at 08:19:55 AM EST
[ Parent ]
Frank Schnittger:
There is a view in Ireland that we are seriously pissing off all the people who matter in the EU and that they will be doing us no favours when the next Government is formed.
What, by telling Trichet he's a civil servant and not a politician?

What's left of central bank independence? | willem buiter's maverecon | Blog by Professor of European Political Economy, London School of Economics and Political Science - FT.com

President Trichet of the ECB is already so far down the road of telling governments what to do and what not to do in the fiscal and structural reform domains, that one is hardly surprised by yet another lecture on budgetary policy from the Eurotower.  Traditionally, continental European central bankers speak very little about monetary policy in public, and are often unwilling to engage in public debate or answer questions about their monetary duties, but carry on endlessly about budgetary and structural reform matters.  It's always easier to speak about things you have no responsibility for, that are not part of your mandate and about which you probably don't know very much.


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 08:46:07 AM EST
[ Parent ]
In September 2010 the last big chunk of money the Irish banks owed the bondholders, 26 billion euros, came due. Once the bondholders were paid off in full, a window of opportunity for the Irish government closed. A default of the banks now would be a default not to private investors but a bill presented directly to European governments.

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103?currentPage=all

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Mon Feb 7th, 2011 at 01:38:21 PM EST
Wow guys, you just gotta read the article linked to above. It's absolutely sick.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Feb 7th, 2011 at 02:15:07 PM EST
[ Parent ]
And that is why we're not talking about defaulting on bank debt anymore - we're talking about defaulting on sovereign debt.

That default should hit, in declining order of evilness:

  1. Irish oligarchs who profiteered from the bubble years.

  2. Major money market operators, who have been attacking €-zone countries for more or less valid reasons.

  3. The ESFS, for being a useless abortion that needs to blow up sooner rather than later.

  4. The ECB, for not doing its goddamn job and printing money on demand.

  5. German, French and Dutch private banks, to incentivise the ECB to start doing its goddamn job and printing money on demand.

  6. German, French and Dutch sovereigns and pension funds, for the same reason.

But you are in all probability through the odious part of the debt before you start hitting pension funds.

Yes, it won't hit all the people who stole the money in the first place, and yes it will hit some people who didn't steal any money in this particular bailout. But not hitting every crook is not an excuse for hitting no crook, and with the exception of the pension funds, the ones on this list who didn't steal any money in the bailout are still horse thieves who should lose their shirts on general principles.

- 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 11:17:29 PM EST
[ Parent ]
How would a sovereign default hurt anyone but the ECB (and other holders of Irish sovereign debt)?

I'm all for hitting crooks, but it seems to me that because of the willfull insanity of the Irish governement, the ECB and the other euro governments, that window of opportunity is closed.

The best thing I can see is an Irish partial sovereign default, where they default on all debt except that held by other euro nations (i.e. the ECB).

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Tue Feb 8th, 2011 at 09:02:04 AM EST
[ Parent ]
Hitting the ECB is good since it forces Germany to be part of a "transfer union" as the capital of the ECB is shared by all EU countries in proportion to their GDP.

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 Feb 8th, 2011 at 09:14:54 AM EST
[ Parent ]
And touch off Unternehmen Grün... :P

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Feb 8th, 2011 at 10:07:17 AM EST
[ Parent ]
How would a sovereign default hurt anyone but the ECB (and other holders of Irish sovereign debt)?

It wouldn't.

But there are a lot of holders of Irish sovereign debt that we want to hit.

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 9th, 2011 at 01:15:20 AM EST
[ Parent ]
Like who? Who holds the outstanding Irsih debt, beside the ECB?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 10th, 2011 at 10:36:16 AM EST
[ Parent ]
Private banks with exposure to Ireland - since there isn't any private Irish interbank debt left, per your top-level comment.

We are talking, if the BIS is to be believed, about a quit substantial sum there.

But of course, threatening to default on the ECB isn't a bad idea either. Might motivate them to stop behaving like a hedge fund and start behaving like a central bank. Or not. But then, that would solve the problem as well...

- Jake

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

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 11th, 2011 at 01:42:01 AM EST
[ Parent ]
I'm not sure what the figures for this are - I have heard various sums mentioned - and the data is probably all out of date since there are delays in reporting and the "bank run" of funds out of the Irish banking system is ongoing.  The way not to manage a default is to keep talking about it - it has become a major argument within the election campaign - and not actually do anything.  It just exacerbates the funds outflow and dependency on the ECB.

The ECB really need this issue to be settled by a democratic mandate from the people or it will fester on for years.  The opposition parties will have a mandate for some sort of renegotiation and if the ECB is obdurate and agrees nothing - then we may just have a Government collapse and another General election and another year of instability.

Do these guys ever learn?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 11th, 2011 at 05:56:51 AM EST
[ Parent ]
Also, from the other thread:
BusinessWeek: Anglo Irish to Swap 90 Percent of Subordinated Debt (December 21, 2010)
Investors agreed to exchange 307 million euros ($404 million) of its so-called lower Tier 2 bonds due 2014 and 459.5 million euros of similarly ranked notes maturing 2016 at an 80 percent discount to par value, the Dublin-based bank said in a statement. By accepting the swap, holders agreed to changes in conditions that will wipe out investors refusing to take part.


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 Feb 8th, 2011 at 04:31:02 AM EST
[ Parent ]
My argument too.
by IM on Tue Feb 8th, 2011 at 10:00:06 AM EST
[ Parent ]
There is no doubt the current Govt. has done it's utmost to close down all the options for its successor and that Ireland is in a much weaker position defaulting on Sovereign as opposed to private debt.

Nevertheless the issue of sustainability remains:  If the Irish economy goes into a death spiral in consequence of 4 austerity budgets in a row then default becomes unavoidable no matter how undesirable it may be.

No matter how you "package" it, we need a "stimulus" plan to complement the austerity measures and whilst I have no difficulty in cutting bloated salaries of senior politicians/civil servants and some appallingly inefficient administrative overheads the solution cannot be public expenditure cuts alone.

A rebalancing of the EU intervention - away from the ECB as the sole intervening institution - towards more active engagement by the Commission/Council supporting investment in infrastructural or green energy projects - in line with the Lisbon competitiveness agenda - and which could be funded by interest payments or regional/cohesion funds - would go along way to reducing the noxious effects of austerity and risks of default.

We have got to move away from the ECB being almost the sole EU institution involved in economic development - and return it to its proper, and much more limited role as a monetory authority and regulator - and tell it to do its own business better - i.e. regulate banks and hedge funds much more effectively.

It is the absence of an EU political vision and action programme that is the most striking since Merkel's rise.  It is almost as if the British eurosceptics have been replaced by Germans, and the other 20 odd members have gone AWOL.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Feb 8th, 2011 at 10:40:06 AM EST
[ Parent ]
I'll be very disappointed if Cowen doesn't get some fancy appointment to an EU institution or an international bank soon after he leaves government.

The desperation to lock in the successor governments doesn't make any sense otherwise.

by Colman (colman at eurotrib.com) on Tue Feb 8th, 2011 at 10:59:29 AM EST
[ Parent ]
Frank Schnittger:
we need a "stimulus" plan to complement the austerity measures
Isn't "stimulus" antithetical to "austerity"?

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 Feb 8th, 2011 at 11:09:22 AM EST
[ Parent ]
being smart are we?

How about increasing the capital budget whilst reducing the current expenditure budget? At the moment everything is being cut to bits. Shifting resources from less productive to more productive activities is what businesses do all the time. Infrastructural and other investments which increase future productive capacity and reduce future operational costs (incl carbon energy inputs) should be a priority even Merkel wouldn't have a problem with.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Feb 8th, 2011 at 11:16:58 AM EST
[ Parent ]
Fianna Fail will survive because they have a very professional backup team. If you watch the election broadcast of new Party Leader, Michael Martin you would never guess he was a senior cabinet Minister for the pst 14 years!



Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 7th, 2011 at 02:49:34 PM EST


Display:
Go to: [ European Tribune Homepage : Top of page : Top of comments ]

Top Diaries