Category: Comment

Notable comments in international blogosphere in reaction to four year plan. FYI; Bond spreads still rising.

Krugman…

What’s going on here? In a nutshell, Ireland has been orthodox and responsible — guaranteeing all debts, engaging in savage austerity to try to pay for the cost of those guarantees, and, of course, staying on the euro. Iceland has been heterodox: capital controls, large devaluation, and a lot of debt restructuring — notice that wonderful line from the IMF, above, about how “private sector bankruptcies have led to a marked decline in external debt”. Bankrupting yourself to recovery! Seriously.

Also, Alphaville.

Instead of talk of bailout, now talk has turned to default. Ireland simply cannot afford to repay its debts. S&P has again cut our sovereign debt rating. This is going to be an interesting few weeks.

And to remind our readers (and welcome new ones) here’s what our Financial Regulator said in October 2008:

May we live in interesting times.

Scannal (the excellent sub-titled part-As Gaelige documentary show on RTE One) was – in an amazingly perfect event of ironic timing – about the Insurance Corporation of Ireland last night.

ICI was a significant subsidiary of AIB which collapsed in 1985. The taxpayer bailed out AIB. It eventually cost us IR£400m, a massive figure at the time.

Find last night’s programme in the archive here.

It was a story of lax regulation and greedy banking policies which led to a massive hit on the taxpayer that threatened to pull down “the sovereign”. It’s one of the major events in AIB’s “colourful history” referred to earlier on this blog.

Now, time for some Shirley Bassey…

“They say the next big thing is here,
That the revolution’s near,
But to me it seems quite clear,
That it’s all just a little bit of history repeating”

… he has been in bailout talks with Irish for “several weeks”. Here. Guardian liveblog on our bailout here.

Absurd day. National budget or December election on the horizon it appears after John Gormley announced the Greens will be pulling out of Government, but err… not until after voting for the budget; which essentially makes their support for the budget pretty irrelevant.

Gormley says the decision was based on there being a real problem with communications and the answers the Greens had received in recent days. He also said the decision had been made on Saturday after a series of – presumably, internal-party – meetings.

But I was watching Gormley speaking to Sky News yesterday evening and seem to remember him saying he backed Brian Lenihan and his proposal for applying for an IMF bailout despite reservations about communications earlier in the week.

Does anyone have the clip [or a more specific memory of the of it/transcript]?

I can’t find it on the Sky website. He was speaking outside Government Buildings wearing a reflective jacket and was standing beside his bike. I love to hear the quote again to check it against my own recollection. Sky hacks, where you at?

Quotes. Mainly the two Brians. Links from RTE.ie broken because they’ve changed the site link structure.

Quotes. Make of them what you will…

Brian Lenihan; 19 Sept 2008. Six One News.

“Our financial sector is sound and we are determined to ensure that continues”

Brian Lenihan; 30 Sept 2008. Morning Ireland.

“Does this mean the Irish government is exposed? No that’s not correct, of course every Irish bank has to write up their assets and liabilities in balance. The banks would be insolvent otherwise”

Brian Cowen; 30 Sept 2008. Six One News.

We have a banking system which has over the past number of years had good profits, in a healthy state, well capitalisted, well-secured loans. The first people to hurt if anything happens in the bank are the shareholders

Brian Lenihan; 10 Oct 2008. Irish Times.

“the cheapest bailout in the world so far”

Brian Lenihan; 19  Nov 2008. Six One News.

“We’re not rushing into the banks like some governments in other countries without knowing exaclty what the situation is in those banks…”

Brian Lenihan; 14 Dec 2008. Six One News.

“There will be no exposure to the taxpayer on this [€10bn support fund for banks]…”

Brian Lenihan; 16  Jan 2009. Morning Ireland.

Interviewer: Is it possible that you could in a few weeks time that you could move to nationalise AIB and Bank of Ireland as well? “No it’s not… there are no difficulties in these banks, there is no problem”

Brian Lenihan; 8 Feb 2009. The Week in Politics.

“We are now going to commit an investment for a definite return to the taxpayer. This is not bailing out the banks. This is a commercial investment for the state…” Continue reading “Talking points in time”

The UK is making some big changes today, and we look forward to these changes being implemented here:

The UK Government will open its books for the whole world. All expenditure for all Government departments over £25,000 will be published at data.gov.uk. For some departments, we will publish all data over £500. We will be publishing all this as open data, and we will be publishing updated data every month.

There is a big financial incentive. We want people around the world to help us identify savings; we want individuals and organisations to use and abuse this data for commercial purposes; and we want companies to offer to undercut their competitors who are already providing services to the UK Government.

Most importantly we want British taxpayers to hold us account. We want them to ask why we are spending money on a particular service, or a particular company. We want them to understand what their taxes are being spent on.

But we need your help. We want you to bring this data alive – and we want you to explain what these figures actually mean. We want you to reuse and scrutinise this data in any way you can.

Britain is committed to being the world leader on transparent data, and with your help, this data will be a major step in achieving this aim.

This WSJ piece gives a decent outline of the position the Government finds itself in (though I think the poker analogy – now in use everywhere – is really soulless. I know, I know, it’s the WSJ.).

[…] This game is due to be played out over the rest of this week, with European Union and International Monetary Fund officials descending on Dublin to thrash out a deal. Ireland has signaled it is willing to consider a deal to recapitalize its banks, allowing them to borrow again in private markets.

That suits the Irish because it enables them to claim the government itself remains solvent and so shouldn’t be subject to any external fiscal oversight that might put its tax arrangements at risk. Legally and practically, this argument is nonsense, because any bailout needs to be channeled via the government, giving the lenders the right to impose any conditions they wish.

That may point to an extended standoff between Ireland and the rest of the EU. If so, this crisis simply would be following the path of every other period of stress over the past three years in Europe and elsewhere. But eventually, the market will succeed in pressuring policy makers into the response it is seeking.

I still can’t see business taxes remaining as they are now. It’s not politically possible for a German – or French – government to sell a bailout for Ireland to its public while Ireland poaches business from them due to its tax haven status.

Also, for the record; if we access the EFSF the euro will be gone within five years. It’s bloody awfully designed. More on this in a later post.

The Irish Election Literature Blog brings this one from its seemingly endless archive of old canvassing literature.

Well, lads?

Hasn’t happened too often in recent years but… an Irish Times editorial with some guts.

The true ignominy of our current situation is not that our sovereignty has been taken away from us, it is that we ourselves have squandered it. Let us not seek to assuage our sense of shame in the comforting illusion that powerful nations in Europe are conspiring to become our masters. We are, after all, no great prize for any would-be overlord now. No rational European would willingly take on the task of cleaning up the mess we have made. It is the incompetence of the governments we ourselves elected that has so deeply compromised our capacity to make our own decisions.

They did so, let us recall, from a period when Irish sovereignty had never been stronger. Our national debt was negligible. The mass emigration that had mocked our claims to be a people in control of our own destiny was reversed. A genuine act of national self-determination had occurred in 1998 when both parts of the island voted to accept the Belfast Agreement. The sense of failure and inferiority had been banished, we thought, for good.

To drag this State down from those heights and make it again subject to the decisions of others is an achievement that will not soon be forgiven. It must mark, surely, the ignominious end of a failed administration.

Well…