IRISH TAXPAYER (Séan): “I am really furious right now, Helmut…”

As I mentioned yesterday, the markets were distinctly unimpressed with the details of Ireland’s bail-out

The Irish Times today notes that

Although banking stocks rose yesterday, global stock markets closed lower as markets failed to be convinced that the €85 billion package for Ireland would solve the euro zone debt crisis.

EU economic and monetary affairs commissioner Olli Rehn said yesterday that Spain may need further austerity measures to reduce its deficit if growth was lower than forecast next year.

And the paper adds in a seperate [borrowed] report

The focus was on Italy and Spain, two of the euro zone’s largest economies, which are dubbed by some investors as “too big to fail”.

The premium both countries pay for their debt above benchmark German interest rates rose to a fresh high since the introduction of the euro a decade ago.

Italy saw some of the biggest moves of the day as it held a €6.8 billion debt auction but paid half a percentage point more than a month ago.

“The crisis is not abating,” said Alan Wilde, head of fixed income and currency at Baring Asset Management. “The euro is being hit, and Italy has now been drawn in with a big fall in its bond markets for the first time.”

And, somewhat related to Mack’s post, Gavin Barrett imagines a conversation on the Clapham omnibus Clontarf dart – also from the Irish Times

[Helmut:] Like I said, it’s in nobody’s interest to see Ireland bankrupted – although it is fair that you feel quite a bit of economic pain for your really irresponsible behaviour. You can’t seriously expect us to lend you money while you instigate a panic with your “bondholder- burning” that would wreck our banking system and our currency.

Seán: We won’t pay this. We can’t pay it. It’s too much.

Helmut: I am afraid you will have to, Seán. If you don’t accept the terms on offer you have absolutely no way of financing your ongoing budget deficit. Plus your banks will collapse because, well, you’ll have nothing to finance them with.

Seán: We could just refuse the loan and bring you down too.

Helmut: I don’t think you would dare. For a start, another major crisis in the euro zone is in nobody’s interest – least of all Ireland’s. Secondly, Ireland would collapse financially first, not anyone else. Your problem, Seán, is that you are looking at things the wrong way. You are supposing a moral duty on other countries to help Ireland out to an extraordinary degree. I don’t accept the existence of any such duty. The reality is that every state in the euro zone, and indeed in the EU, is there, for the most part, for its own benefit: out of enlightened self-interest.

Seán: You have a strange idea of EU these days.

Helmut: Is it so very different from yours? I don’t recall too many Irish people on either side of the Lisbon Treaty debate in Ireland ever talking about Europe’s interests. On the contrary, that debate was all about Ireland, Ireland, Ireland. It strikes me that people who accuse Germans of not being very good Europeans should look into their own hearts a bit more.

Frau Bundeskanzerlin, history’s knocking…

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  • HeinzGuderian

    Not even I could argue with that !!!

  • DC

    You could have added the cherry on top with a real comment from Chancellor ‘George’ Gideon Osborne:

    “Ireland is a friend in need and we’re here to help.”

    Translated that means:

    “we have been very irresponsible in Ireland too – us Britons – well us British financial elite – come on Ireland please don’t stop this debt party take the EU money – otherwise our house comes down as well!”

    And by the British financial elite I mean the likes of Fred the Shred of RBS – who has a nice pension today – but isn’t it RBS that is exposed to crappy toxic debts in Ireland?

    The British financial elite:

    Former RBS chief executive Sir Fred Goodwin, ex-chairman Sir Tom McKillop and former HBOS leaders Andy Hornby and Lord Stevenson of Coddenham were grilled by the Treasury Select Committee on the banking crisis.

    Each of them apologised at the beginning of the hearing for their role in the collapse of the banks – but they all stopped short of admitting blame.

    Sir Fred, known as “Fred the Shred” for his cost cutting measures, said: “I’ve apologised in full and I’m happy to do that again.”

    Somebody in British politics really should halve Sir Fred’s pension and remove his ‘Sir’ title.

  • JJ Malloy

    Ask Helmut what he thinks of forcing Ireland to vote on Lisbon enough until the Eurocrats got the answer they wanted

  • pippakin

    It can’t be done. The wretched bankers and their accomplices must know that they are supposed to be good at maths…

  • Alias

    It’s a funny old world when the EU is being more truthful to the Irish people than their own government:

    “EU economic and monetary affairs commissioner Olli Rehn said yesterday that Spain may need further austerity measures to reduce its deficit if growth was lower than forecast next year.”

    The government’s growth projections are pure invention since they are predicated on the biazrre premise that you can grow an economy by extracting revenue from it in the form of taxation and other funds and exporting that capital to other countries in the form of free money courtesy of the Irish taxpayers.

    The real level of ‘austerity’ will only kick in when the interest bill for the true cost of bailing-out the eurosystem (now 500+ billion) becomes greater than the total tax revenue of the state.

  • DC, how did you manage to get yellow carded? It does not suit you. You look too much like a Lib Dem.

    “Frau Bundeskanzerlin, history’s knocking…”

    Absolutely correct. I see that the contagion of expensive bond rates has now spread to Italy. Time is running out for the Euro. She needs to come up with a plan to save it very very quickly.

  • Greenflag

    DC ,

    How did you manage to get yellow carded ? Can you tell ?

  • 21stcentury fenian

    Seems to me that most of the commentary on this is hampered by two glaring but mostly over looked misconceptions:
    1. Economists know what they’re talking about and at least some their predictions are vaguely correct
    2. Markets are rational and are sending a coherent message

  • DC

    Not sure GF me ole china, probably using a swear word to describe speculators and stuff like that. Calling a certain speculator a name that rhymes with hunt.

  • DC,

    In my mind, that would not justify a yellow card but then I dont know the full facts.

    It does make me wonder about commenting policy.
    Margaret Thatcher is often accused of being a murderer of the hunger strikers. That is, of course, the most extreme charge you can make towards a fellow human being. Lets forget the fact that I am a Tory. If Michael Foot had been in power in 1981 and taken the same approach as Mrs. T, I would still have found it offensive if he had been described as a murderer.

    Should commenters be allowed limitless latitude just because their offensive remarks are towards a politician, rather than a blogger or commenter?

  • DC

    I can be a bit volatile at times so perhaps the admin on here thinks a bit of regulation my way might help.