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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

Friends come and go. Enemies accumulate.

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

Friends come and go. Enemies accumulate.

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I'm not sure what the figures for this are - I have heard various sums mentioned - and the data is probably all out of date since there are delays in reporting and the "bank run" of funds out of the Irish banking system is ongoing.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?

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 11th, 2011 at 05:56:51 AM EST
[ Parent ]

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