The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[seafoid]

If Spain gets sucked in there are 2 choices

-Print hundreds of billions of Euros  to pay off the debts of the banks and to hell with the inflation consequences
-Break up the Eurozone and have son of Lehman Brothers 
The global financial system is going to crash anyway ....

[Declan]

Gene Kerrigan: Elite stand ready to serve new overlords
Cowen's cheerleaders aren't mourning lost sovereignty but their own loss of influence, writes Gene Kerrigan

Sunday November 21 2010
Shame, humiliation, embarrassment. Public and private figures lined up to disclose their emotional turmoil over the past few days. Oddly enough, I didn't truly feel even a shadow of any of those responses as the IMF took over the running of the economy.

Anger, maybe? That's true. But let's be honest, I've been seething since the week Mr Cowen and Mr Lenihan gave the banks the disastrous blanket guarantee.

Here's the question. Are you any worse off this week than you were last week? Or even last year?

Yes, yes, yes. I know we're all supposed to be traumatised because the Government has thrown away the self-determination for which generations of Irish patriots struggled etc etc etc. Was it for this, asked a melodramatic Irish Times editorial, that the men of 1916 fought?

Get a grip. If self-determination is so important (and it is), perhaps we should ask who this 'self' is who has been determining how the country is run?

Let's leave aside the regularity with which Mr Cowen and Mr Lenihan have had to scutter over to Brussels to take their riding instructions from the EU. Leave aside the fact that every major decision had to be okayed by the likes of EU Economic Commissioner Olli Rehn. Leave aside the slavish deference to the interests of unidentified bondholders.

Within this republic, there's a layer of well-off people who have had an inordinate and unaccountable influence on the running of the country. Golden circles, if you will. They are surrounded by cheerleaders -- professionals and media fans -- who amplify their every wish.

For decades politicians have had blatantly unhealthy relationships with wealthy people. They take money, they discuss policy. There are battalions of lobbyists who make a very good living conveying to the politicians the explicit wishes of the folks who fund their parties.

This is considered okay, as long as no one leaves a memo lying around that says, "Hey, Big Boy, thanks for the donation! I hereby give you my word that I'll corruptly act in your interests."

It's true that Fianna Fail handed over the country to the bankers and the developers and the gamblers. But, come on, let's not pretend that was a secret. One result of the donations and the lobbying was the light-touch regulation that led to the credit bubble and the economic collapse. Again, let's not pretend the lack of effective regulation was a secret. It was a founding principle of the Progressive Democrats, eagerly adopted by Fianna Fail. And widely applauded.

The comfortable classes were supported in their aims by the regiments of professionals who made fortunes from the boom. And they were ferociously defended by the media elite. To question the demands of 'the risk takers' and the alleged 'wealth creators' was unpatriotic and socialistic.

Regulation was denounced as a product of the 'nanny state'. Anyone looking for functional regulation was denounced for trying to tie the hands of entrepreneurs with 'red tape'.

Have we forgotten all that? It's a bit rich, now that Mr Chopra has arrived in town, to pretend that a handful of reckless politicians crippled our sovereignty.

Where's the shame among all those who assured us that Brian Cowen is an intellectual powerhouse? Every time he spouted two coherent sentences he was deluged with orgasmic approval. And even as Cowen's star faded, the same people assured us that Brian Lenihan was an even greater intellectual powerhouse -- even as he fervidly and ridiculously assured us again and again that we'd 'turned the corner'.

Given his illness, Lenihan's personal courage and commitment to his job are not in doubt. It's his conservative politics that haven't been up to it. When the bubble burst, the crisis was so big that it needed a truly radical response. Instead, for over two years we've had business as usual -- the politicians seeking above all to protect the privileges of the comfortable classes. Thus came the fatal blanket guarantee of the banks.

The decision to socialise the losses of the banks, to protect the rich and pass the tab to those who use the public health and public education facilities was applauded at the time.

Central Bank Governor Patrick Honohan assured us the tens of billions blown on the failed rescue of dead banks was 'affordable'. Politicians told us it was the government deficit that was the real problem, and deflating the real economy was the answer. The opposite was the truth -- the government deficit was based on an actual economy. It arose from services and businesses and structural development -- the basis for growth. It was the wasteful effort to protect the structural inequalities -- epitomised by the dead banks and their crazed bankers -- that did for the economy.

Let me quote Mr Rehn's admirably frank reminder: "We need to recall that sovereign debt has not been at the origin of the crisis. Rather, private debt has become public debt. The financial sector has misallocated resources in the economy and then stopped working."

We've been told that the arrival of the IMF has set De Valera and Collins spinning in their graves. You mean, De Valera didn't spin like a Hotpoint when Haughey was lying about taking millions from his sugar daddies? Or when servile, ingratiating Fianna Fail ministers queued up to claim they believed Bertie won all that money on a horse? You mean Collins rested in peace as Enda and his insipid front bench lined up to back Fianna Fail's plan to socialise the losses of the elite and force the poorest to pay for the golden circle's gambling?

Much of the shame, humiliation and embarrassment on display over the past few days comes from people who felt they had some influence within that setup. Media types, and the comfortable classes who knew their concerns were never far from the minds of Brian Lenihan and Mary Harney. It's frustrating for them that they lack similar clout with the likes of Mr Chopra and his mates.

These people will get over their emotional upset.

We've been told the arrival of the IMF is like the Germans marching into Paris in 1940. Eh, not quite. Mr Chopra is no Nazi, he's a technician. The IMF are here to safeguard the euro, and the interests of German and French banks. And I can't see the comfortable classes imitating the heroic maquis and taking to the hills.

Yes, people will die from IMF policies. They'll die on the same hospital waiting lists they'd have died on as a result of Mr Cowen's policies. Just as people died prematurely in the 1980s, when the comfortable classes used the corrupt banks to hide their tax frauds, and the politicians took 'tough decisions' with the health and jobs of the disposable classes.

The comparison with an occupied population, as in Paris in 1940, has one element of validity. In such circumstances, certain circles find it sensible and productive to collaborate with the new powers-that-be (in the interests of stability, don't you know). With an agenda of their own to protect, aiming to survive the recession with much of their fortunes intact (all the better to build the new Ireland), they'll point out where the troublesome elements are to be found, and the disposable citizens.

[Declan]

A short term solution for the euro. An absolutely monumental disaster for Ireland if we ever draw any of this money down for the Banks.

Ray Kinsella (ex Irish central bank and IMF) was interviewed this morning on Bloomberg. Painted a very scary scenario for both Ireland and the Euro zone in general. His conclusions

The bailout won't work and the contagion will spread to other Euro zone countries. He door stepped Rehn when Rehn was in Dublin. "Why are you proposing taking 6billion out of the Irish economy which will lead to even bigger problems"? Rehn refused to answer him.
We have just agreed to take on another 100 billion in sovereign debt.

Our debt levels will now be 200 billion plus by the end of 2011. This will cost us 8 billion a year to servive, without reducing the amount owed.

We earn 30 billion or less a year, meaning debt servicing will take up over 25%of our annual budget.

We are currently devising plans to take another 6 billion out of our economy.

[An Gaeilgoir]

The Golden Circle indeed. To listen to A. Fanny (Sindo Editor) on the late late the other night was sickening. He was shiteing on about this great country blah blah blah. Nobody asked him about his pal's visits to the paper and his soft interviews, to help him maintain his grip on power. It is indeed not only the fault of the bankers that we have ended up where we are now.

[seafoid]

A short term solution for the euro. An absolutely monumental disaster for Ireland if we ever draw any of this money down for the Banks.  Ray Kinsella (ex Irish central bank and IMF) was interviewed this morning on Bloomberg. Painted a very scary scenario for both Ireland and the Euro zone in general. His conclusions

The bailout won't work and the contagion will spread to other Euro zone countries. He door stepped Rehn when Rehn was in Dublin. "Why are you proposing taking 6billion out of the Irish economy which will lead to even bigger problems"? Rehn refused to answer him. We have just agreed to take on another 100 billion in sovereign debt. Our debt levels will now be 200 billion plus by the end of 2011. This will cost us 8 billion a year to servive, without reducing the amount owed. We earn 30 billion or less a year, meaning debt servicing will take up over 25%of our annual budget. We are currently devising plans to take another 6 billion out of our economy.

The 100bn includes money the government would have borrowed anyway over the next 3 years- 13bn next year then say 9 after and then 4 after than. There may be no other option but to let AIB go to the wall.

I agree that the plan looks stupid but let's see what the IMF say. They are going over all the books and  they don't have the green jersey. I expect a lot of sickening revelations when they reveal their findings. 

[glens abu]

Greens to hold press conference at 11.30.Will they walk?

[Shamrock Shore]

Hope they do.

This government is a blight on our country and while I don't relish a General Election on St. Stephen's Day I do think the people of Ireland need an opportunity to vent.

[Hardy]

Sounds like it. Apparently "F**k you Deputy Stagg" has been tweeting that there's a "big announcement" coming.

[seafoid]

They would be doing the State some service.

[seafoid]

Sounds like it. Apparently "F**k you Deputy Stagg" has been tweeting that there's a "big announcement" coming.

Meath could restore some honour by booting out the FF muppets it elected last time. It's all linked to the all-Ireland QF shambles. 

[Hardy]

They've said set a date now for a general election in the second half of January. (Or else we walk now, seems to be the implication).

[Declan]

By then of course their ministerial pensions are safe!!!

[Hardy]

It's a real sleeveen move on so many levels.

[Declan]

It's a real sleeveen move on so many levels.

Spot on Hardy

[Billys Boots]

It's a real sleeveen move on so many levels.

Spot on Hardy

What should we expect from a pig but a grunt.  Judging from the FF post, this Govt are unlikely to get the trouncing they deserve.  However, it would appear that the electorate are going to get the trouncing they deserve.