Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
A default is the unilateral imposition of ANY change to the terms agreed upon in the loan document that are to the detriment of the creditor. This happens all the time. When the USA unilaterally ceased to redeem Federal Reserve Silver Certificate currency in 1971 that was a default. In the last two years China has unilaterally refused to honor obligations on futures contracts, claiming that the market had been manipulated. Both of these are examples of sovereign default.

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

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

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 4th, 2011 at 11:06:57 AM EST
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