Who’s against the “bailout”? Almost everyone

The IMF’s mission chief in Ireland, Ajai Chopra, said of the Irish bailout: “This is a very good deal for Ireland in current circumstances.”

Not quite everyone agrees.

In fact, basically no-one without a vested interest agrees.

Paul Krugman and Fintan O’Toole wrote columns excoriating it, Richard Douthwaite and Constantin Gurdgiev both loathe it… does anyone actually like this bailout?

The issue cuts across ideological lines. Could green-inclined Douthwaite, free-marketeer Gurdiev and social democrat O’Toole agree on much else? On the libertarian right, UCD professor Gerard Casey says the Irish are being treated like peasants. On the libertarian left, meanwhile, James Heartfield says the bailout is colonisation by another name. Social democrat Stephen Kinsells says it’s inequitable and regressive.

Quote of the day goes to Slugger’s Mick Fealty, though, for reasons you’ll have to read the article to understand.

Read the full article at Newswhip.ie.

  • tolpuddlemartyr

    Ireland went mad in the sweetie shop.
    http://www.tolpuddlemartyr.blogspot.com

  • John East Belfast

    Hold on a second here !

    Irish bankers behave recklessly

    Irish Developers behave recklessly

    Irish Bankers & Developers had been lauded as national heros – especially when they were buying up chunks of England

    Irish people pay ridiculous amounts for their houses and borrow against it and go a spending spree

    Irish Govt decides it too will go on a spending spree and provides a Welfare system that is twice its nearest neighbour and was the author of the Welfare State

    Irish Govt insists on the lowest Corporation tax in the developed world

    Irish Regulator asleep at the wheel

    Irish Govt – democratically elected by the Irish people – encourages the binge and lightly touches the aforementioned Regulators

    Irish Govt with its culture of cronyism, corruption and cute hoorism is re-elected by the Irish People

    Irish Govt because its Banks were about to collapse and everyone was about to take out their money gives a blanket guarantee to encourage their Banks’ creditors to leave their money where it is and indeed lend more money to both it and its Banks.

    Please tell me why other Eurpean tax payers should pick up the bill for this party so that the ROI public sector and Welfare claimants can continue with outrageous pay and benefits that the Country clearly cant afford ?

  • Alias

    Taxpayers should not “pick up the bill” for the reckless investments of private corporations, Irish, British or German. Those private corporations that made reckless investments – such as the British, German, etc, banks – should “pick up the bill” for their own investments, just as they intended to pick up the profits.

    Each house sale in Ireland equalled a massive profit for a bank in the UK who loaned the money to a bank in Ireland to fuel the property bubble. Those greedy British banks knew where their massive profits were coming from and what the risks of property bubbles are. In fact, so greedy, so reckless, and so lucrative was the racket that UK banks injected 130 billion into it. Indeed, the British government was enjoying huge taxes on those profits and so its regulatory authorities turned a blind eye to the risks to its banks from their reckless activity.

    It is not the responsibility of citizens to underwrite the losses of private corporations, and it is morally repugnant for them to do so.

  • Itwas SammyMcNally whatdoneit

    Jason,

    the attitude of columnists has been already marked on Slugger – what is not clear is where the political parties lie.

    It iseems it is Ourselves Alone(SF) alone in favour of default as far the ‘main’ parties (ie those with seats) are concerned.

    Alias,

    Many people in Ireland made loadsa-money from selling property that they bought at a fraction of the cost they paid for it or took out 2nd mortgages. They are at least partially responsible.

    JEB,

    I agree with you up to point but ‘pain sharing’ with bondholders is probably reasonable.

  • John East Belfast – UK/German banks lent 4-5% of THEIR countries’ GNP to Irish banks. Someone should have said “bloody hell that’s a lot of money to give what is, tiger or not, a bloody small country”

    While there can be argument about causation and who should pay in what proportions, turning this in Versailles-on-the-Liffey and allocating zero blame to the core countries who lent the money and to the ECB will do lasting harm to the European project because every country with under 10m people will consider the fact that at any time Angela Merkel and Jean-Claude Trichet can decide to simply cut them loose, but start stepping in once bond prices in Spain and Italy rise.

  • Alias

    Sammy, that is a proper argument for holding mortgage defaulters to account for their own profit-seeking activity but it is not, as you confuse it as being, an argument for holding taxpayers to account for the activities of those mortage holders.

  • John East Belfast

    The point I am trying to make is that responsibility is being shifted to the extent that the ROI financial crisis is something that was visited upon Ireland by others as opposed to a massive collective Irish responsibility – people are moving into delusion on this default.

    However sharing the pain among Lenders and Borrowers is ultimately likely but until Public Sector Wage costs and Welfare Benefits are at least brought down to UK levels and Corporates pay a sensible share of tax on profits earned then there is not a lot of sympathy for the case.

    If you defaulted on your mortgage whilst enjoying an extravagent life style you would not get any sympathy in the Bankruptcy courts.

    The tills are still ringing in Dublin and people are still spending – there remains a lot of untapped money.

    What the Revenue Commissioners should do is trawl through the Capital Gains Tax Returns of Individuals and Corporates the last 10 years and levy a retrospective tax on what were clearly artificial gains. A lot of the profits on Property deals are still with ROI companies and citisens – take it off them

  • Itwas SammyMcNally whatdoneit

    Alias,

    This crisis is a combination of failure of regulation by the state and failure of common sense by both the Plain and not so Plain People of Ireland – and reckless lending to the lenders themselves.

    But trying to suggest that European banks are entirely to blame for our collective stupidity is not going to wash.

    “for holding mortgage defaulters to account for their own profit-seeking activity”

    Interesting to see how you can get money back from someone who has bought a new car, gone on holiday and owns a new house.

  • Cynic

    Fine then. Don’t have it. Default. And see what happens. But please just stop whinging

  • lover not a fighter

    Irish people should not pay for gambling bankers and moronic politician.

    What ever must be done not to pay for gambling bankers and moronic politicians must be done.

    All options should be used until one that achieves this outcome is found.

    And I mean “all options”.

  • anne warren

    Worth reading this article from The Telegraph which presents the dilemma very clearly

    “The question is, should the Dail vote against the austerity budget on December 7, Pearl Harbour Day. And should the next government – with Sinn Fein in the coalition? – tell the EU to go to Hell, do an Iceland, wash its hands of the banks, and carry out a unilateral default on senior debt by refusing to extend the guarantee?

    The risks are huge, but then the provocations are also huge. And there is a score to settle. Did the EU not disregard the Irish `No’ to Lisbon, just as it disregarded the first Irish `No’ to Nice? Did it not trample all over Irish democracy?”
    http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100008812/irelands-debt-servitude/

  • @John East Belfast remember the Irish people are ALREADY paying for the excesses of Anglo etc. NAMA bonds, equity infusions into AIB/BOI now massively written down, the NPRF raided etc. Huge personal catastrophies of jobs vanished, businesses wiped out.

    How much more would you like them to pay on top of that?

  • Comrade Stalin

    JEB

    Please tell me why other Eurpean tax payers should pick up the bill for this party so that the ROI public sector and Welfare claimants can continue with outrageous pay and benefits that the Country clearly cant afford ?

    I would not argue with your point that responsibility for the state of the country lies squarely with the Irish government and, by extension, those who elected the corrupt bastards who created the mess. People have to expect to suffer for the mistakes caused by their greed.

    However, the European taxpayers are not being asked to bankroll the country. There are two aspects to be clear about. Firstly, Europe is providing Ireland with a loan, not a grant. Robert Peston pointed out that the UK could borrow the money at a fraction of the cost and lend it to Ireland at 5% – helping Ireland and also making a straight profit – and I’m sure it’s the same for the other European countries. I have nothing against those things per se, but please don’t pretend that this is some sort of misguided charitable act – it isn’t.

    Secondly, Irish taxpayers are being asked to bail out European bond holders by repaying the loans which are in turn being used to pay off the Europeans who purchased them. In other words, it’s heads I win, tails you lose. That’s not a bailout, that’s investors being protected from their bad decisions – which is a perversion. It’s an injustice and it’s deeply damaging to the idea of economic and monetary union, playing right into the hands of those on both the extreme left and the extreme right who argue that the EU is run in the interest of the largest countries within it.

  • anne warren

    In support of Comrade Stalin’s observation that
    “Irish taxpayers are being asked to bail out European bond holders by repaying the loans which are in turn being used to pay off the Europeans who purchased them. In other words, it’s heads I win, tails you lose!

    Nobel winner Paul Krugman says banks ripping Ireland off

    Ireland’s bailout is ‘Worse than a Crime’
    http://www.irishcentral.com/news/Irelands-bailout-is-Worse-than-a-Crime-says-NY-Times-columnist-110850374.html

  • Greenflag

    JEB,

    ‘However sharing the pain among Lenders and Borrowers is ultimately likely’

    No question . It’ll be the first item on the agenda whenever the new Government is elected . I had a pleasant dream last night in which I saw Gerry Adams as the new Taoiseach of a very left coalition sitting across from Ollie Rehm (ECB) and Chopra of the IMF in re -negotiations and then one of the SF negotiators mentioned that he knew where both Ollie and Choppers lived ;(

    And mirabile dictu somehow the IMF and ECB managed to reduce the debt by 75% . Normally Adams as taoiseach would be a ‘nightmare’ but hey we don’t live in normal times anymore 🙁

  • Comrade Stalin

    I had a pleasant dream last night in which I saw Gerry Adams as the new Taoiseach

    I don’t think he’ll make it as Taoiseach but knowing republicans and their macabre sense of humour I suspect he’d happily plump for Ministry of Defence.

  • Itwas SammyMcNally whatdoneit

    Greenflag

    “I had a pleasant dream last night in which I saw Gerry Adams as the new Taoiseach”

    It will be interesting to see at what point Labour will change its position when and if telling the bond holders to feck off becomes the position of choice of the Plain People of Ireland.

    But just to indulge your fantasy a bit – Marty would make a better Taoiseach than Grizzly and most definitely should be involved in any negotiations -having dealt excellently with the naysayers of the DUP the quarefellahs from the IMF/EU will be easy meat.

  • Alias

    If Gerry Adams was new Taoiseach then Ireland would never default since his handlers would not allow him to write-off the 130 billion owed to UK banks.

  • Alias

    Also, Jason, lots of folks are not against the bail-out of banks. I haven’t seen some folks in such good a mood in a long time as I have seen them this week. They’re delighted that they now see their deposits as being safe. It’s a huge worry off a lot of minds. They’re smart enough not to give that impression to those who don’t have large deposits, however.

  • lamhdearg

    If Eire tells the bond holders to feck of, who will pay the binmen nurses and teachers next summer, the deal even if it is a bad deal is the only deal on the table.The people of Eire would be better taking the loans and working there way out of this for the sake of Eires future. Greenflag on gerry the Taoiseach and this is the truth i have been telling people for years (most of whom look back blankly) that gerrys aim was to be Irish foreign minster(in a coalition) and ulsters first minster at the same time, how he seems to have given ulster up he may have to sit facing martin while robbo sulks in the corner.

  • Comrade Stalin

    Sammy:
    Sammy:

    But just to indulge your fantasy a bit – Marty would make a better Taoiseach than Grizzly and most definitely should be involved in any negotiations -having dealt excellently with the naysayers of the DUP the quarefellahs from the IMF/EU will be easy meat.

    Now that Gerry is out of the way how much would you like to bet on the SF position on education changing ?

    lamhdearg:

    If Eire tells the bond holders to feck of, who will pay the binmen nurses and teachers next summer,.

    A loan can still be obtained from the IMF/EU who have not said in public that they require Irish taxpayers to pay off the bondholders. If that’s what they want – then let them say it is part of the price of the deal. If it’s not what they want then what’s the problem ?

    the deal even if it is a bad deal is the only deal on the table.

    How do you know ? The country is being asked to put their trust in the people who spent the past number of years getting it in that mess.

  • Alias

    Lamh, that’s the EU’s idea of involving the IMF. It has the purpose of locking Ireland into servitiude to the eurosystem by denying it the means to exit via a default. If you default to the IMF, the lender of last resort, then no one will lend to you in the last resort. The EU is miles ahead of these domestic europhile gombeens.

  • Itwas SammyMcNally whatdoneit

    lamhdearg,

    “Irish foreign minster”

    I dont think (rightly) Gerry would be comfortable under that title. I think he might argue for a longer more descriptive ministerial title Minister for Reunifcation of the Northern Province, which was temporarily and unjustly grabbed by the Englezes with the rest of the homeland.

  • Itwas SammyMcNally whatdoneit

    CS,

    Unionists are even out of step with the Tories on education, No change (hopefully) there.

    Is there a simple answer to the question – do the Alliance Party support selection?

  • Comrade Stalin

    Unionists are even out of step with the Tories on education, No change (hopefully) there.

    Unionists were never in step with the Tories, hence the election disaster for UCUNF.

    Is there a simple answer to the question – do the Alliance Party support selection?

    You answer my question first about the bet. Then I’ll answer yours.

  • John East Belfast

    Comrade and Mark

    I am commenting on the legitimacy, even morality of Default but when someone defaults on their Debts they are usually at rock bottom – they have lost everything but are being given a clean sheet to start over.

    As far as I can see some people are wanting the ROI to walkway from its commitments but with their own personal wealth protected. The bill will then be picked up by other European tax payers as we step in to support effectively nationalised institutions like RBOS.

    I draw your attention to the following extract from Andy Pollack’s thread “Castles built on sand”

    “During the weeks of Ireland’s financial ‘bail-out’ crisis this month, the Northern papers have featured amazed articles about the huge differences between Irish and Northern Irish social welfare and public sector pay levels: the contributory pension £195 per week in the South, £97 in the North; the jobseekers allowance for those over 25, £166 per week in the South, £65 in the North; child benefit for a first child £127 in the South, £88 in the North; a first year hospital consultant’s pay, £156-163,000 in the South, £74,000 in the North; a secondary school principal’s pay £80,500-89,000 in the South, £55,800 in the North; and so on(2).

    The outspoken former president of University of Limerick, Dr Ed Walsh, has even suggested the Republic could solve most of its financial problems at a stroke by reducing such payments to Northern levels: “If we were to benchmark public servants’ pay to those in Northern Ireland, we could save €15 billion, and if we were to bring key social welfare benefits down to those in Northern Ireland, we would save a further €8 billion a year.”(3)

    In a letter to the Irish Times in late November, University of Ulster economics professor Dr Vani Borooah wrote: “A single person in Ireland pays tax after €18,300; in the UK this is closer to £9,000. In my own profession, a full professor at a university earns on average £60,000 annually; in Ireland this figure is at least €100,000. So get real: you’ve overpaid and under-taxed yourselves too long.”

    Consider the absurd situation where Brian Cowan tells Cameron and Merkel — “Sorry but we cant pay our debts after all – we simply cant afford it” – depite him being on a bigger salary than both.

  • Alias

    John, public expenditure should be cut if the purpose is to allow taxpayers to retain more of their own income. It should not be cut, however, for the actual purpose of transfering workers’ income from workers to foreign bondholders so that those bndholders can forego the consequences of their own reckless investments.

  • John East Belfast

    Alias

    Someone needs to do a costing on how much the Irish Taxpayer would have actually incurred in Sep 2008 if the Irish Govt had not given the Bank Guarantee.

    There is no doubt the BOI, AIB & Ango Irish would have collapsed.

    What cost would that have been to the ROI Taxpayer ?

    The Eur 100k guarantee would have kicked in for a start.
    A lot of Corporates would have gone bankrupt as they lost their cash deposits and access to any credit.

    Property prices would hve totally collapsed as the Bank’s creditors would hve firesold the assets they would have inherited from the Banks they would have sent the Administrators into

    The economy would have been wrecked and the ROI taxpayer would have been picking up a lot more pieces than what they re now.

    You would have been borrowing even greater amounts of money in a bigger bail out.

  • Itwas SammyMcNally whatdoneit

    JEB,

    “The economy would have been wrecked and the ROI taxpayer would have been picking up a lot more pieces than what they re now.”

    I tend to agree and doubt if many of the columnists who are now suggesting default were suggesting cutting off the banks then.

    But that does not mean there should not be pain sharing now.

    CS,

    re. betting on education.

    I would not like to bet anything on SF changing its education policy in the short term and things may change after the Stormo elections.

    Any simple answer to the question – does the Alliance Party support selection?

  • Mack

    JEB –

    It’s not like I haven’t spent the last two years blogging that we face two crises – 1 fiscal and 1 banking. It is the attempt to conflate the 2 that causes the problems. The debts run up by private institutions are just that private, not sovereign debts.

    The structural fiscal deficit has to be solved whether the senior bank bond holders take a haircut or not. This is not ‘Ireland’ defaulting as these debts are not Irish debts. By extending the guarantee Ireland is protecting it’s own banking system as well as European banks. It was able to d so because the ECB providing €130bn in exchange for (probably dodgy) collateral from the banks. As the ECB make clear that this facility can’t be extended and hint it may be withdrawn in the future – the Irish state must take steps to ensure Ireland has a functioning banking system, but we can’t bailout the European banking system as well.

  • Mr Brightside

    The reset button (default) will only be pressed if true misery (or at least the threat of it) is inflicted upon the populace at large.

    The RoI is a long way from that and until then giving up on a new mobile phone and transferring sovereignty to Brussels is probably still a better deal than that throw of the dice.

    Better the devil you know. Which may explain why FF are still managing over 20% of the vote.

  • Itwas SammyMcNally whatdoneit

    Mack,

    it is a little disingenuous to state

    “but we can’t bailout the European banking system as well.”

    when the money in question was pissed up against the wall by amateur and professional Irish property developers.

    Regarding the ‘conflation’ arguement – there was a complete failure of lending regulation by the Irish government/regulators and a complete failure of common sense by the Plain People of Ireland so to suggest it is all down to Fritz the foreign financier simply wont wash politcally, intellectually or financially – even if it is very appealing in these dreadful times.

  • Mack

    Sammy –

    That much is true, but it is also true that there was a complete failure of regulation by the German government and regulator, British government and regulator.

    Believe it or not German banks are / were more leveraged than ours!

    It’s just instead of lending money to be pissed up against the wall by a small coterie of property developers they leant the money to be pissed up against the wall to other (foreign / external) Euro system banks.

    The difference here is that the German banks are getting the taxpayers of other nations to repay every last cent to their bank.

  • Mack

    Here is the thing. Ireland needs a banking system. It doesn’t neccessarily need the banking system we currently have.

    Here is what could have happened. September 2008 – the government does nothing, Anglo, BoI, AIB, PTSB, Irish Nationwide etc. all go the wall.

    The government creates a new bank, capitalised from the national pension reserve fund and the markets with reserves of €30-50bn. The new bank purchases a branch network, and deposits, loan books – cherry picking the best from the wreckage. Deposits are guaranteed to 90% of the first €20k.

    Lots of Irish depositors loose some money. The big corporates in Ireland take a massive hit (IFSC companies, Intel, Microsoft and the like – this by the way – is why we had the guarantee in the first place).

    The economy goes into free fall, but soon the new banking system starts to operate. We sort out the structural fiscal deficit and begin to grow again much earlier without the debt overhang..

  • Mack

    Barry Eichengreen – “Ireland’s Reparations Burden”

    http://www.irisheconomy.ie/index.php/2010/12/01/barry-eichengreen-on-the-irish-bailout/

  • John East Belfast

    Mack

    “The new bank purchases a branch network, and deposits, loan books – cherry picking the best from the wreckage. Deposits are guaranteed to 90% of the first €20k.”

    Mack that is the biggest problem you have in your theory – who is going to capitalise this New Bank – The Eur 19billion Pension Reserve would not have been enough.

    As for an Eur 18k Guarantee on deposits then that is all anyone would have put in – infact they wouldnt even have done that as they would have feared the Govt’s ability to honour it – how big a hole would the previous Eur 100k Guarantee have put in the Govt coffers ?

    The Bond Holders would not be up for lending new Money.

    Remember it isnt money that makes the world go around – it is Credit – and ensuring the flow of that is what the bail out is about as far as the ROI Govt is concerned. The problem then arises on being able to service the interest and then for future generations having to repay the capital.

    On the latter I think there remains significant fat in the ROI public and welfare sector to make a big dent. There are also under taxed gains on what were clearly artifcial profits in the hands of ROI citisens and corporates that could be shaken down.

  • Itwas SammyMcNally whatdoneit

    Mack,

    “The difference here is that the German banks are getting the taxpayers of other nations to repay every last cent to their bank.”

    What the Germans banks do is a separate (though related)matter but I thiink you are conflating Ireland’s (banks, politicans, regulators and people) responsiblity for borrowing money recklessly and the fiasco we have brought on ourselves with what are the best tactics for dealing with this fiasco.

  • Mack

    JEB –

    There is €19 bn in the NPR Fund today – it was closer to €30bn two years ago. Also Ireland had a debt-to-GDP ratio of around 20% in 2008, there would have been significant capacity for borrowing from the markets to recapitalise the banks then.

    The biggest flaw is that allowing the banks to go bust at that point in time would have had a knock-on effect in other European countries. Potentially kicking off a debt-deflation spiral. Ireland may well have wound up in a worse position than we are today, but our partners would be suffering with us. As things stands the import of this gesture appears to be unappreciated..

  • Mack

    Also on deposit protection, in August 2008 deposits in banks regulated by the Irish financial regulator had that guarantee (90% of the first €20k or so in place). The cost of replacing those deposits would have been limited..

  • Comrade Stalin

    JEB :

    As far as I can see some people are wanting the ROI to walkway from its commitments but with their own personal wealth protected.

    The point here is that the money owed by banks to private bondholders is not an RoI commitment. Why should the State be liable for private debts ?

    The bill will then be picked up by other European tax payers

    Why are you repeating this lie ? The Irish state is not being bankrolled. It is being offered a loan, against which the EU will extract a profitable interest rate – with some degree of risk. How does this amount to the bill being picked up by taxpayers ?

    as we step in to support effectively nationalised institutions like RBOS.

    The British government was right to act as it did WRT Northern Rock, HBOS/Lloyds and RBS, and it will make a healthy profit as a result as well as stabilizing the banking system. Win-win. What’s not to like ?

    Consider the absurd situation where Brian Cowan tells Cameron and Merkel — “Sorry but we cant pay our debts after all – we simply cant afford it” – depite him being on a bigger salary than both.

    It’s not that the Irish state can’t afford it. It’s about why it should be affording it in the first place. Why should the state bail out private bondholders ?

  • Comrade Stalin

    JEB:

    (on what might have happened had the Irish government stepped in)

    Property prices would hve totally collapsed as the Bank’s creditors would hve firesold the assets they would have inherited from the Banks they would have sent the Administrators into

    That’s not right either John. If the government had nationalized the banks instead of guaranteeing them, a measured approach could have been taken to the loan books with the impaired ones being shifted off to NAMA and the good ones being kept and potentially sold to other European banks, or (as the British government did with Northern Rock) encouraging customers to remortgage with other institutions where possible.

    The doomsday scenario you describe would have been very unlikely. From an investment point of view it makes no sense to recall loans which are performing. No banker will keep cash in the current account when it can be out there earning X%.

  • Comrade Stalin

    Sammy,

    Well at least you’re admitting that SF policy may change now that Grizzly is out of the way.

    Alliance opposes selection at 11 and favours shifting the decision point to 14. I think this is something similar to the system operated in the Craigavon area ?

  • Alias

    Ireland doesn’t have any sovereignty over the minimum level of guarantee that a depositor receives. That is determined by the EC under the Deposit Guarantee Scheme Directive.

  • John East Belfast

    Comrade

    I am doing you the justice you know what you are talking about here but I am not so sure to be honest ?

    “The point here is that the money owed by banks to private bondholders is not an RoI commitment. Why should the State be liable for private debts ?”

    Because in Sept 2008 to stop the Bank’s creditors withdrawing/demanding all their money back they gave a Guarantee.
    They realised that if they hadnt given that Guarantee their Banking Systems and economy would have collapsed.

    They decided that the cost of that collase would be the worst of two evils. At that time although everyone thought the Guarantee was ludicrous it was also lauded by many – if you look at Slugger archives after that date you will see that. The key trick was they thought the Guarantee would never be called upon in its entirity – which of course is the basis of Banking.

    In addition to stopping a run on and collapse of their banks they secured additional credit lines and more Deposits.
    It also gave them space to paln NAMA etc.

    Therefore – to date – the pain being born in the ROI is nothing to what would ahve happened had their Banks and economy collapsed.

    To listen to people you would think this Guarantee was given last month – it was given two years ago and the benefits of it ahve been enjoyed to date – the costs of it are yet to come – maybe borne over a generation but that is the price to pay for collective national greed and incompetence.

    Remember the Irish Govt regulated these Banks and the Irish people consistently re-elected people who they knew were looking the other way. Meanwhile everyone binged on the party that was the Celtic Tiger.

    “The bill will then be picked up by other European tax payers

    Why are you repeating this lie ?”

    If you read/understood what I was saying this was what would happen in the event of an ROI default. In such circumstances if European Banks are writing of Billions of Euros of ROI Loans then European Govts will have to further tap European tax payers to support those banks – it is hardly a revolutionary thing to say and certainly not a lie.

    “It’s not that the Irish state can’t afford it. It’s about why it should be affording it in the first place. Why should the state bail out private bondholders ?”

    See above. That question was asked two years ago and the powers that be decided it was the lesser of two evils. Since that Guarantee was given more money has been extracted and NAMA introduced.

    Personally I think an excellent Documentary would be “What would have happened to the Irish Economy had the Guarantee not been Made”

    That horror film may change a few peoples’ minds on the matter

  • Alias

    “Personally I think an excellent Documentary would be “What would have happened to the Irish Economy had the Guarantee not been Made””

    That would be a short film. The failed banks would have been allowed to fail, with the assets being used to pay off the depositors. New banks would have been created, and failed banks would have been taken over by successful banks, in addition to existing banks enjoying new demand for their existing services. The taxpayers of the state would not be responsible for the debts of failed corporations, and failed corporations would not have continued to inflict damage on the state.

  • Alias

    Incidentally, an economic depression is temporary and an economy usually comes out of one stronger than when it entered with weak businesses consolidated it but a 500 billion euro debt is permanent. Plus, of course, the euro will collapse anyway once Portugal and Spain accept that it has duly destroyed their economies and wrecked any prospect of their recovery.