Euro crisis: “even though we know how difficult a treaty change will be”

Whilst the Eurogroup continues working “on a proposal”, there are some other snippets to note.

The IMF has announced it is releasing almost €1.5billion to Ireland as part of the EU-IMF financial aid package for the country.  Apparently the Irish government has maintained “resolute implementation” of the economic restructuring programme, and is “ahead of schedule in some areas”.

Not so Greece.  The Irish Times’ Arthur Beesley informs us that the EU-IMF inspectors have “unexpectedly left Greece yesterday after the emergence of divisions with the government over the execution of reforms agreed in its first international bailout.”

The troika – comprising the EU Commission, the ECB and the IMF – sent an inspection team to Athens a fortnight ago for the fifth quarterly review of the first Greek rescue. Top officials from the three institutions joined talks with Greek ministers on Monday but the deadlock persists.

“At a certain point you reach the conclusion that there is no point in having new meetings every day – and you leave the Greeks a chance to do their homework,” said a source close the troika.

At issue is the Greek government’s failure to deliver promised reforms to public sector pay and its tax collection system. The troika is also unhappy with the government’s failure to liberalise a number of professions.

The troika and Athens are at odds over the extent to which these questions are hampering the effort to tackle the Greek deficit, now set to be larger than forecast.

Greece blames a quickening of recession but the troika says promised reforms would ease pressure on the economy.

“They’re not happy,” said a Greek government source in reference to the troika.

“On the other hand I think they can see that we are at the very limit here and you can’t just turn something on or off, but there is nothing that could put in question the continuation of the meetings.”

And as for Italy…  There has been a declaration of independence by the new Principality of Filettino.  And the Italian government are being warned by the head of the European Central Bank, Jean-Claude Trichet, to ‘stick to the plan’.  From the BBC report

Mr Trichet declined to discuss the ECB’s bond-buying plans at Saturday’s conference, in Cernobbio on northern Italy’s Lake Como, but was quoted by Reuters as saying the ECB would discuss it at a meeting next week.

He urged Italy to push through the package of cuts announced in early August, saying: “It is essential that the target which was announced to diminish the deficit will be fully confirmed and implemented.”

He described as “extremely important” all measures to improve the “flexibility” of Italy’s economy.

Both industrialists and union leaders have accused the austerity plan of relying too much on spending cuts and new taxes, and offering little to stimulate growth or to encourage job creation.

Disagreements over taxes and pensions within Mr Berlusconi’s coalition government led to a series of U-turns over the past week.

A tax on high earners and a rise in the pension age were proposed, then dropped, within days.

And that’s before we get to Germany, where the Finance Minister, Wolfgang Schäuble, is reportedly telling his party colleagues “that solving the euro zone crisis was not possible without a successor to the Lisbon Treaty, “even though we know how difficult a treaty change will be”.”

Well, that is an option.  And he’s probably right.  Although I’m not sure how viable an option it is at the minute…

And there’s still “the political trilemma.” 

[Europe is still sexy! – Ed]  Of course it is.

And, as I’ve been saying, for supporters of the “European Project”, the options are stark.

And when it’s that serious, you have to lie…

Adds  BBC Europe editor Gavin Hewitt covers similar ground.

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  • huntsman

    Ireland is slowly but surely escaping from the dire economic situation it founded itself in after the banks and the builders left the people to pay the bills. Once the budget is balanced, Ireland should use the opportunity to leave the euro. It should never have been there as it two main trading partners, the US and the UK are outside. It would never have gotten into the housing bubble if it could set its own interest rates. A mistake was made and a trerrible price paid, but now is not the time to amplify that mistake.

    There is zero chance of a new treaty getting through either Ireland.

    Trichet has probably done more dmage in Europe than anybody since Hitler and Stain. His policies have been a diaster.

  • Pete Baker

    Godwin-ed by the first comment.

    Oh dear…

  • huntsman

    Peter,

    I supported the idea of a common currency at the beginning but the result for Ireland has been terrible and I admit I was wrong.

    Trichet and his allies have made the ECB into the German Central Bank. Their whole operation is to support the German economy. It cannot work like that and it has not worked.

    I cannot think of a major reason why Ireland should stay in the Eurozone in the longer run. The country greatly prospered in the period immediately up to the creation of the Euro when it had its own currency and set its own interst rates.

    I doubt if many in Denmak or Swedan, two small counties compariable to Ireland, would today opt to join the Euro. The only argument in favour of Ireland staying is that in the present precarious situation it would be very hard to manage the new currency. Therefore the Irish must put its fiscal position in order before it departs the sinking ship.

    Trichet has made the wrong calls on every occasion and his severe deflationary medicene could see whole countries become destabailised and others bankrupt, all to support Germany. Some of the Southern European countries do not have the resourses of Ireland to escape the Tricket noose.

    I look forward to any referendum in Ireland on a new Treaty.

  • aquifer

    ‘I supported the idea of a common currency at the beginning but the result for Ireland has been terrible and I admit I was wrong.’

    Not your fault. Ireland’s banking and credit regulation was lamentable, you could not have predicted that people would be that reckless in government.

    With a little less boom the bust need not have happened.

  • huntsman

    Aquifer,

    I agree but even if there had been proper regulation (and that is a very big if) Ireland would still have had inappropiate interest rates at the time.

    Nobody could have foreseen that the ECB would operate in one country’s national interest. Germany was always going to have a big influence but I dont think the other countries thought their’s would be ignored. The last interest rate rise was pure vandalism towards Spain, where the country is making valiant attempts to mitigate the damage a housing bubble had caused.

    Spain has a lower budget deficit in GDP terms than the UK and also a lower % National debt than the UK. The market sentiment is against Spain because it is in the Eurozone and the dealers know it will not get any consideration from Trichet and his gang in its difficulties. Spain should follow Ireland out of the present rigid framework and decide on an economic policy which actually suits the country.

  • Comrade Stalin

    It would never have gotten into the housing bubble if it could set its own interest rates.

    An ingenious plan. Why didn’t it work in the UK and USA ?

    Why did Euro members such as France and Germany, or smaller countries such as Sweden etc., avoid a housing bubble even though they lacked the power to adjust interest rates ?

    Could it possibly be the case that government policy relying solely on interest rates to control the housing market was at fault ?

  • Greenflag

    @ Comrade Stalin,

    ‘Why didn’t it work in the UK and USA ?’

    Precisely . As to the lack of a housing bubble in France , Germany , Sweden or Denmark ? the form of capitalism that these countries ‘enjoy’ is much more concerned with maintaining social stability and a measure of equity in their societies than the Anglophone countries are other than maybe Australia and Canada .

    An excellent article from the BBC on what is ‘ailing ‘ the western plutocracies and why they cannot seem to unravel from the downward spiral of recession .It seems ‘capitalism ‘ was much better behaved when it had some real competition . Nature abhors a vacuum even in the world of economics . Whatever Mr Fukuyama was smoking at the top of his mountain when he put pen to paper to write ‘The End of History ‘ must have clouded his thinking processes .

    Not an end just a new beginning -one world dead and another one just beginning more like it which has still to find it’s feet before it can climb up from it’s current prostration at the feet of international plutocracy .

    http://www.bbc.co.uk/news/magazine-14764357

  • Alias

    “An ingenious plan. Why didn’t it work in the UK and USA ?”

    That is simply your own failure to understand monetary and macroeconomic policy.

    The question should be why did economies that didn’t employ expansionist monetary policies avoid a property bubble? They avoided them because they didn’t act to stimulate borrowing by proffering cheap money.

    The central banks of the economies that implemented expansionist monetary policies – the Bank of England, The Federal Reserve, and the ECB – all got the same results from those policies. The economies that didn’t implement got different results.

    Ergo, your flawed argument simply proves the opposite of what you would like it to prove.

  • ‘Why didn’t it work in the UK and USA ?’

    Monetary contol does work, if used properly. The Housing boom in the UK occurred because interest rates were too low. The Bank of England was supposed to follow inflation targets. However, inflation was measured by the increase in consumer prices, not assets such as land. That lesson was learned, at least by the Conservatives in opposition. Here is a quote from a speech by George Osborne, Mansion House April 2008

    “Because our inflation was low, thanks in large part to the import of deflation from an emerging Asia, anyone who raised concerns about imbalances in other areas – the current account, debt, or the odd fact that our growth was becoming more and more concentrated in a few limited areas of the economy – was told to stop worrying, that the world had moved on.

    Since asset prices – houses, property, and shares – are not part of the inflation target, the massive inflation in asset prices was allowed to go unchecked.”

    Later in Februay 2009, Osborne confirmed, in a press release, that in Government, they would consider asset prices in order to assess inflation.

  • Alias

    Greenie, German banks are the most under-capitalised banks in the world. They are under-capitalised because they are over-leveraged, and they are over-leveraged because they have loaned too much cheap credit courtesy of the ECB setting the policy rate.

  • Comrade Stalin

    The central banks of the economies that implemented expansionist monetary policies – the Bank of England, The Federal Reserve, and the ECB – all got the same results from those policies.

    The same results ? How many of the Euro’s 17 members have had to call in the IMF ?

  • Comrade Stalin

    Monetary contol does work, if used properly.

    Seymour, indeed. The problem is that all of the countries with a particular emphasis on monetary control (especially the USA and a UK) all failed at the “used properly” part.

    My point is that relying on interest rate policy to fix everything when there’s trouble doesn’t work. Therefore, the statement “we would have avoided all this crap had we been outside the Euro” is wrong. I see no reason to believe that Ireland’s fiscal and monetary policy if it had its own currency would have been substantially different from that of, say, the UK.

  • Greenflag

    @ Alias ,

    ‘ They (German banks and others I’d add ) are under-capitalised because they are over-leveraged, and they are over-leveraged because they have loaned too much cheap credit courtesy of the ECB setting the policy rate.’

    This we know Alias but we also know that the ECB’s cheap credit policy was the ‘answer ‘ to the USA’s cheaper still credit policy which had been underway since the late 1990’s and which sparked the US housing and credit bubbles and the idiotic waging of several unnnecessary wars on the national credit card to be paid for by the next generations of US taxpayers .

    I have for what it’s worth changed my view on the Wall St bail outs by both Bush and Obama . At the time I believed that had they not done so then the risk of a massive collapse of the banking system worldwide would have led to societal chaos , wars and with 50 million americans armed perhaps worse .

    But now it seems the banksters have learnt nothing these past three years neither in the USA nor UK nor Germany and seem determined to oppose any and all attempts to corral their economy destroying rapacious thievery . And now I read that a US government agency is suing 17 of the biggest banks including Goldman Sachs , BOA , Citigroup, Deutsche Bank and Morgan Stanley for outright ‘fraud ‘ during the sub prime debacle which still hangs over the US and world economies .

    And the response of the banks to the suing ? They are now threatening the US government that if they are sued and found guilty and are fined heavily i.e billions for their illegal activities then they will ‘retaliate ‘ by ‘losing monies ‘ which they would otherwise have lent to businesses to expand and hire new employees etc etc – All of this is of course utter and barefaced hypocrisy .

    It seems now that bailing out the banks was a mistake for the US taxpayer and government and ditto for the UK and Ireland . The ungrateful swine have as I said learnt nothing from their ‘destruction of entire economies ‘ and the saddest part is that our politicians are so scared of these thugs that they bow and scrape to every banksters demand or so it seems .

    Iceland got it right and are now on the path to recovery . And I read that even Argentina once the pariah of the IMF and the world’s banksters has 4% unemployment and a growing economy and has even been able to increase social welfare provisions for it’s poorest people and improve their education.

    I also read that the Israeli’s are demonstrating by the half million against their governments ‘austerity ‘ measures which of course in their case means money for guns and weaponry and the rich with shag all for the rest .

    The crisis of anarchic capitalism continues with no end in sight and with none of the major players the USA or EU being prepared to do much more than hold on to whatever policy rails they are gripping while they take themselves and the world economy over the edge — again 🙁

    This will end badly and not just for North Africa or Greece 🙁

  • Pete Baker

    Guys

    Focus on what’s to come in the eurozone.

    Rather than attempting to rationalise what’s already happened…

  • Alias

    Some times you get to the future via the past. As ‘Dave’ explained, there won’t be any further EU referendum placed before the Irish people.

    The Supreme Court was of the opinion that the State is authorised to undertake an act “necessitated by the obligations of membership of the Communities” and that such acts are by the nature of the multilateral agreement and the supranational organisation that the people consented that the State could be party to are subject to alteration:

    “It is the opinion of the Court that the first sentence in Article 29, s. 4, sub-s. 3 of the Constitution must be construed as an authorisation given to the State not only to join the Communities as they stood in 1973, but also to join in amendments of the Treaties so long as such amendments do not alter the essential scope or objectives of the Communities. To hold that the first sentence of Article 29, s. 4, sub-s. 3 does not authorise any form of amendment to the Treaties after 1973 without a further amendment of the Constitution would be too narrow a construction; to construe it as an open-ended authority to agree, without further amendment of the Constitution, to any amendment of the Treaties would be too broad.” – Crotty v. An Taoiseach

    Given that Lisbon is an all-encompassing treaty that establishes a new federal state with a constitution that takes supremacy over the Irish constitution, the people should have a reasonable expectation that the treaty can and will be amended to consolidate the new state wherein they have consented that their state should become a subordinated region.

    In approving a treaty with a self-amending clause, they pre-approve all further derogations of their sovereignty that may come about by that means, just as long as they are consistent with the objectives of the treaty (and being an all-encompassing treaty, there is little that would be held to be inconsistent).

    While fiscal union would require substantial revisions of the treaty that may fall outside the scope Article 48 of the Lisbon treaty, it wouldn’t fall outside of the scope of “the essential scope or objectives of the Communities” and so the State could ratify it without a referendum in Ireland.

    Likewise, the other member states would do the same, domestic difficulties permitting. The Irish had their chance, and they blew it.

    Comrade, 7 out of the 17 of the eurozone member states are now verging on bankrupcy so that is a catastrophic failure rate of 41%, with the rest enjoying top rabkings among the world’s most indebted states. EU crisis! What EU crisis!?

  • Neville Bagnall

    From the article:
    Mr Schäuble has insisted that national budgetary law isn’t up for discussion.

    “The federal budget law is the fundamental right of our parliamentary democracy and no one can take it away,” he said. “As finance minister I don’t even want to take it away.”

    And from this: http://www.irishtimes.com/newspaper/finance/2011/0905/1224303498207.html

    “Germany is having a lively discussion behind which it’s saying: eurobonds aren’t for free’,” said Ulrike Guerot, Berlin head of the European Council on Foreign Relations. “Collective debt backed largely by Germany can only come with collective decision-making over who spends what.”

    As far as I can see, so far the discussion is about Eurobonds, and how far beyond the Euro+ pact we would need to go. Clearly Germany will not sign up for Eurobonds without Court of Justice enforceable penalties. That would most likely involve Treaty changes. And since it would transfer competence from the political sphere to the legal sphere, it would almost certainly be interpreted by the Supreme Court as competence changing and therefore referendum triggering. However, while Eurobonds look more and more necessary, I still think they will be resisted to the last.

    As for Schäuble’s 1994 paper, I don’t think there is any appetite for that level of integration, even among those who would favour Eurobonds and a Euro+ Treaty.

    What we will be looking at in a EuroBond scenario, is limitations on how Eurobonds can be issued. That will require some level of stress testing of each national budget (its not much good saying “no new bonds” after a crisis has hit). However as Schäuble makes clear, within those boundaries, national parliaments and governments are as protective of their rights as ever. This is much less a new Euro-government and much more a European Office for Budget Responsibility, but with legal teeth.

  • Neville Bagnall

    As an aside, for those who say the ECB only took account of Germany’s needs in the last decade, can I point you to http://spustrategy.files.wordpress.com/2011/07/gdp-of-members-within-the-eurozone1.jpg

    The states that are critical in deciding eurozone policy are Germany, France, Italy, Spain and the Netherlands plus to some extent Belgium, Austria and Greece.

    For most of the last decade those countries had growth rates below or close to the eurozone average, which itself was mostly below 2%.
    And three of the biggest, Germany, Italy and the Netherlands went close or into recession.

    The ECB policy was not set for Germanys benefit, it was set for the eurozones benefit. We were the insignificant outliers. We still are. Given that, we need far-seeing economic leadership to introduce the unpopular countercyclical policies. Well, we didn’t get it when it could have been done relatively painlessly. Now we get to do it the hard way.

  • Greenflag

    As he faces trial for complicity in Iceland’s financial meltdown former Icelandic Prime Minister’s defence was

    We saved the country from going bankrupt,” he insisted, claiming that if he and his government had acted differently when the banks failed in October 2008, the economy could have fallen off a cliff.
    “That is evident if you look at our situation now and you compare it to Ireland or not to mention Greece,” he said, adding that the two countries “made mistakes that we did not make … We did not guarantee the external debts of the banking system

    the full strory at

    http://www.rte.ie/news/2011/0905/iceland.html

  • Greenflag

    alias ,

    ‘Some times you get to the future via the past.’

    And sometimes you get the past via the future as anyone who looks at how both the EU and USA are facing into the next meltdown.

    While pete would prefer the thread to focus on the ‘future ‘ I’m inclined to paraphrase Alias’s ‘crisis -what crisis ‘ ‘future what future ‘

    And despite everything I’ve read and heard and seen these past couple of years I have still not found an answer to the point raised by former Icelandic Prime Minister Haarde .

    Why did the Irish Govt guarantee the external debts of the banking system when the advice from Merril Lynch to whom they paid a mere 7 million dollars for the eh consultancy was — DON’T .

    IIRC Dave McWilliams proffered the same advice.

    As Neville Bagnall remarks above

    ‘we needed far-seeing economic leadership to introduce the unpopular countercyclical policies. Well, we didn’t get it when it could have been done relatively painlessly.’

    ‘Now we get to do it the hard way.’

    Which is fair comment and correct . It’s just the matter of the ‘we’ in his comment that needs expanding . The ‘we’ does not extend to the ‘banksters’ and those who aided and abetted them across several countries in the greatest ‘looting ‘ in world economic history to date . The ‘we’ means the ‘taxpayers ‘ and the bottom 80% of taxpayers and the poorest of the poor in western societies . Meanwhile those who concocted the weapons of mass financial destruction mostly get a free pass and a bigger bonus .

  • Pete Baker

    Adds BBC Europe editor Gavin Hewitt covers similar ground.

  • Neville Bagnall

    The ‘we’ means the ‘taxpayers ‘ and the bottom 80% of taxpayers and the poorest of the poor in western societies . Meanwhile those who concocted the weapons of mass financial destruction mostly get a free pass and a bigger bonus .

    Totally true. But here is the problem. Quants=Nuclear scientists, Traders=Crew of Enola Gay, Pension Investors=American families of GIs, Western consumers=Kamikaze pilots, Bank Boards=Harry Truman.

    Who do you punish for dropping the bomb? How do you stop the next war?

  • Neville Bagnall

    Why did the Irish Govt guarantee the external debts of the banking system when the advice from Merril Lynch to whom they paid a mere 7 million dollars for the eh consultancy was — DON’T .

    The appalling vista combined with lies. The banks lied to them about the quality of the loan book. Without the guarantee all the banks would have been sold internationally for peanuts or (more likely given the state of the loan book) simply gone bust. That was the appalling vista, and (given the lies) was actually an underestimate.

    It turns out the complete appalling vista (all the banks going bust, no buyers) might have been preferable. Too late now.

  • Greenflag

    ‘How do you stop the next war?’

    Who’s trying to stop it ? From my perusal of the political and economic and monetary world it seems as if ‘the next war ‘ (i.e double or even a first treble dip) ) can hardly come soon enough for those who direct monetary and fiscal policies . It seems nothing has been learned in the past three years either by the banksters or even worse by our so called political leaders who once may have seemed like puppets on a string being ‘dangled ‘ by the financial sector to the virtual exclusion of all others – but who are now seen as having been relegated to humpty dumpty status by increasing numbers within electorates all over the western world .

    Historically of course some wars can’t be stopped or so it seems in hindsight – the unravelling back which would be required or the unlearning that would require such major turn arounds in conventional thinking is simply beyond our human and political capacity . World War I might not have happened or might have been put off for several years had the Archduke of Austria not been assassinated .

    The present monetary . budgetary and fiscal crises might have been avoided had the US Congress and other western countries not deregulated the financial sector to the extent they did or had Lehman’s not been allowed to go under or had Greece not been admitted to the Euro Zone etc etc etc .

    The thought may have struck you that it can’t be stopped and that the current world monetary and fiscal order is beyond redemption given the USA’s political gridlock and the Eurozone’s never ending ‘crises’.

    Seems to me as if both major economic blocs and the other major international economy players are all in ‘Maginot line ‘ building mode and we all know how successful the Maginot line was -don’t we ?

    Your ‘problem ‘ analogy above descriptive omitted Policy Makers – I suggest the FED or the ECB , and Legislatures
    for which I suggest the Congress , Westminster and the Bundestag

    When Ron Paul begins to sound like he’s talking sense and Mitt Romney begins to look moderate and when even Sarah Palin no longer seems as bat shit crazy as heretofore then it may be time too throw in the towel on any hope for an exit out of this particular crisis of anarchic ‘creative ‘ destruction .

    The end of boom and bust ends with the biggest bust up of economic and maybe political history.

    But Mr Greenspan says he did’nt think that the banksters would have gone so ape shit or that consumers would have become so irrationally exuberant and that the war industry would require the creation of another 4 trillion dollars of national debt 🙁

  • Greenflag

    ‘Too late now.’

    The conventional wisdom would say so but then the conventionnally wise policy makers fiscal, monetary and budgetary are not making much headway .

    There are times when the ‘conventional ‘ passes it’s sell by date in terms of being an effective response to a crisis and this may be one such time .

    So instead of ‘too late now ‘ perhaps ‘better late than never ‘..
    I saw last wee on German TV a ‘report’ on the current status of the so called ‘pigs ‘ economies and Ireland got a thumbs up for it’s ‘response ‘ to the ‘bail out’ whereas Portugal and Spain and Italy were given ‘an ‘unsteady as you go’ rating . Greece was given another thumbs down – It appears that despite throwing billions at the problem the Greeks are not or can’t respond and the Germans and French know it -but they (their banks ) can’t afford a Greek default .

    Whether or not the Greeks default will be a matter for the Greeks themselves but as things stand they seem less opposed to the idea than heretofore and their politicians appear even less credible than ours .

  • DC

    Why does a wry smile on my face appear whenever I see such high minded concerns about ‘democracy’ and the EU particularly in the context of private debt and capitalism.

    Since when has capitalism ever given a toss for democracy and takeBritain, where Westminster still has a say over its economy and currency, what is the current government doing, it’s hardly going after the banks or those that caused this crisis with a view to getting some pay back from them – the perpetrators.

    The usual approach is adopted – cutting public spending and increased taxes on the many – the ‘democratic’ government of the UK is nothing other than glorified debt collectors.

    Frankly I wouldn’t give a toss for democracy – not one little bit – if the EU found a way to solve this debt crisis which dealt with the issue of moral hazard and absolved taxpayers of footing the bill for these multiple and multi-national bank bailouts.

    The SOCA approach is still one worth considering and I would gladly accept an undemocratic government as much as a democratic one, in fact it is highly unlikely that any democratic government would go after the wealthy:

    http://labourbelfast.blogspot.com/2011/06/how-to-turn-austerity-into-normality.html

  • Neville Bagnall

    The SOCA approach…

    Its a nice punishment for those we might consider in some way responsible or even those who were “just following orders”. But it won’t avert austerity.

    The wealth is gone. Burnt up. Destroyed. Annihilated.

    John and Jane Doe took their hard earned money and converted it into virtual money, either in taxes, investments, pensions or overpriced houses. That virtual money has been burned in the crash. It wasn’t given to the Bankers, they got a tiny percentage off the top. The money is gone.

    Same with the new virtual money in the bailouts. Thats someone else’s real money converted into a virtual pension, taxes, etc. Some of its been burnt already in the NAMA process. We can burn the rest too by defaulting. Or you could just take your neighbours wallet or furniture and burn it.

    Put another way, our mortgaged house is on fire and the neighbours have turned up in their fire engine. The fire hoses are already working, the fire might still spread on its own, but no, technically, its not too late to set the fire engine ablaze too.

    But hey, if the whole terrace burns, we’ll all be in the same situation; no harm, no foul… right?

  • I supported the idea of a common currency at the beginning but the result for Ireland has been terrible and I admit I was wrong

  • Greenflag

    @neville bagnall ,

    ‘The money is gone.’

    No it’s not -the fiat , derivatised and inflated ‘monies ‘ property and stock/share were created by the anarchic financial sector with with deregulated, irresponsible government approval if not criminal negligence and now ‘taxpayers ‘ from Cork to Colorado and Clapham to Caithness have to pay up both in terms of extra taxation adn in terms of reduced public spending and greater unemployment . Meanwhile the wealth differential between the few and the many has widened and I read that in the USA a large percentage of the newly dispossessed are from the African -American , Hispanic and Asian communities the latter especially in California and Nevada .

    But we don’t hear a lot about the loot skimmed of the top by the banksters nor that much of it is now safely ensconced off shore in the 100 plus Crown dependencies which go by the name of tax havens and which are made use of in all manner of transactions by bankers these past several decades as they continue to find ways of avoiding and as we have seen only too often evading tax.

    And then there’s Switzerland and anybody who has been keeping up with the news should have heard of how the UBS Swiss bank was sending it’s eh investment sales teams to the USA complete with encrypted lap top computers which helped American tax evaders transfer funds directly to Switzerland without having to suffer the inconvenience of a physical visit or risk being discovered committing a criminal act by American law enforcement . and so on and on and on and it still goes on . They have learnt nothing the financial terrorists and won’t until they are consumed by their own stupidity and greed .

    And here’s Max & Stacy again with artistic bank burning the new avant garde of the art world and profitable too for some . Ireland gets a brief mention as does Bank of England and the fractional reserve system .

    http://maxkeiser.com/tag/keiser-report/

  • DC

    To be fair to Neville he’s probably thinking with his Irish hat on, than British or American, or for that matter German. Because in Ireland I’m sure there’s not much real cash floating around given the dire state of its banking system which is all but formally bankrupt in name. Whereas there will be massive winners still around but on the flip side of this coin.

    Greenflag is right the money is still there, if not at the same level during the boom, but it is still there in part, the likes of Henry ‘Hank’ Paulson (Chief Secretary to the Treasury when George Bush was in office) did sell his shares in Goldman Sachs just before the crash in 2006 and pocketed 460 million dollars. Yes, that is right, 460 million dollars! This will be sitting in his bank account and there are many more like him across America and Britain and Germany for that matter.

    For every pitiful loser there will be a majestic winner. That’s capitalism, winners and losers. This time in terms of Ireland and even Britain, the loser has been the taxpayer.

  • DC

    Correction it was 480 million dollars, not 460.

    Here’s the paragraph:

    http://www.spiegel.de/international/business/0,1518,608993-2,00.html

    Part 2: The Illusion of Value

    When Henry Paulson resigned from his job as CEO of the investment bank Goldman Sachs in June 2006 to serve as the US treasury secretary, he received a generous bonus of $18.7 million (€14.4 million). He was also permitted to sell his accumulated Goldman stock, worth $480 million (€369 million), earlier than had originally been stipulated.

    Half a billion dollars, for one person, earned in only a few years — what kind of work could be worth that much money?

  • Flying the flag at half-mast – a suggestion for PIIGS – conveyed by a German EU Commissioner.

  • Greenflag

    I notice they’re not offering places as teachers in German gymnasiums teaching young girls ‘Home Economics ‘

    http://www.youtube.com/watch?v=XLlpFyk46es&feature=related

    Perhaps they should have flags lowered and hoisted on the basis of other indicators such as the bank leverage ratios- kamikaze risk taking investments based on worthless asset values and of course the hare brained decision to allow Greece into the Eurozone when even economic retards in the back streets of Paris and Berlin knew that Goldman Sachs had cooked the Greek books in such a manner and gave them such a glossy overcoat of scam that even Merlin the Magician would have been impressed 🙁

    The Germans reputedly do ‘humiliation ‘ very well from both ends of the spectrum or so Winston Churchill once commented when he was quoted as saying ‘They are either at your heels or at your throat ‘

    Greece is going out of the Eurozone sooner or later despite all assertions to the contrary and it will be an interesting event from a number of economic and political viewpoints . Some of the Greek military establishment may already be shining up their campaign medals and brushing the dust off their epaulettes as they ready to ‘save ‘ a society which will be thrown to the ‘wolves’.

    Of course that may be preferable to being eviscerated over the period of a generation or more .