ECB self censoring its own comms with an (overly?) sensitive Irish marketplace?

In the digital age, edits get noticed. Clearly there are some details about the ECB’s bail out for banks that it didn’t want too widely publicised in Ireland… Jörg Asmussen, a German member of the executive board of the European Central Bank, where he has responsibility for international and European relations…

Perhaps Mr Asmussen has inherited the Danish penchant for speaking plainly from his Flensburg home but on Friday in a speech to the IEA in Dublin, he said:

“…the main reasoning [for the repayment of unsecured bondholders of Irish banks] was to ensure that no negative spillover effects would be created to other Irish banks or to banks in other European Countries.”

The eagle-eyed ones at SSpreadbetting.com noticed that that last reference to banks in other countries was quietly dropped. Too much truth for one speech? (“Sometimes you have to lie”, eh Jean Claude?) Is it fair that Ireland bails out other countries’s banks as the price of bailing out their own?

To hear some of the central bank’s critics you’d almost fall into believing that the bank debt had nothing to do with Ireland. Default too has become almost mainstream as an option amongst some of Ireland’s best and brightest economic minds; regardless of the social and economic let along political costs of striking (or even threatening to) out alone.

The Irish taxpayer has such a large bill because the government of the time believed it was the only way to stop the whole system from keeling over in one night. Time for thought and action were short. And importantly, every single party in the Dail (bar Labour) backed them at the time.

Labour is now trying to deal with the legacy of that decision, whilst Sinn Fein who backed it have changed their minds and are now pulling has hard as they can in the opposite direction.

At the time, the Irish government did not know just how big that debt would prove. At the time, the country acted unilaterally believing at the time, apparently, that it would never have to foot more than a fraction of a maximal bill.

And it was an Irish government which covered the foreign debtor banks (British, French and German amongst others), not the ECB. Regardless of which, it seems there are certain truths that even the ECB feels it cannot be discovered talking honestly and openly about within the Irish public space.

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  • PaulT

    Ah Mick, wondered where you were going with this one….and then..

    “And importantly, every single party in the Dail (bar Labour) backed them at the time.

    Labour is now trying to deal with the legacy of that decision, whilst Sinn Fein who backed it have changed their minds and are now pulling has hard as they can in the opposite direction. ”

    Mick, here is RTE reporting on the vote

    “The measure was opposed by Labour and by Sinn Féin, who had earlier supported the Credit Institutions Bill.

    Sinn Féin’s Arthur Morgan said the party chose not to offer its support to the terms and conditions of the document because the detailed scheme did not give enough protection to the taxpayer.”

    Your spin is a good 12 months out of date Mick, here is a nice concise explanation from P.ie

    “Sigh.

    And here we go again.

    Sinn Fein voted against the Bank Guarantee Scheme brought forward by Brian Lenihan on 17th October 2008. You can check this on the Dáil record and it’s on RTE here: Dil approves terms of guarantee scheme – RT News. This is the scheme by which the government is bailing out the banks

    What Labour accuse Sinn Féin of voting for is NOT the bank bailout. Sinn Fein voted for the Financial Support Bill brought forward by Brian Lenihan on 30 September 2008. Labour did not.

    The Bill said the Minister could act when there was:
    a. A threat to the stability of credit institutions in the State
    b. A need to maintain stability of the financial system in the State
    c. necessity to remedy a serious disturbance in the economy of the State

    It wasn’t a bank guarantee scheme, it was to allow for a bank guarantee scheme to be drawn up and presented to the Dáil if the minister thought it should be done. Sinn Féin was crystal clear that though the party had no problem with someone bringing forward a plan, we would not vote for it unless it contained

    a. A bank levy
    b. No more bonuses for bankers
    c. Salary cuts for the top bankers
    d. Support for mortgage holders under pressure, including a moratorium on repossessions
    e. A state bank

    None of this is in the bank guarantee scheme as it was presented to the Dáil and that is why Sinn Féin opposed it.

    What I find fascinating about the debate is that Labour claims Sinn Féin voted for the bank guarantee scheme in September. Since it didn’t exist, that’s a claim that’s hard to square with the real world.

    It’s also a sign of desperation that this keeps coming up.”

    http://www.politics.ie/forum/current-affairs/151008-sinn-fein-denial-bank-bailout.html

  • PaulT

    Oh, and here is Gilmore pre-election, which I think you’ll agree is a tad different from his attitude today, whereas the SF message has remained unchanged, basically against it then and not implementing it now, unlike the stickies

  • Mick Fealty

    That’s the criticism you were looking for PaulT, it’s not why I wrote the piece. If you don’t mind, I’m not getting involved any further other than to quote myself back at you where I say:

    “The Irish taxpayer has such a large bill because the government of the time believed it* was the only way to stop the whole system from keeling over in one night. Time for thought and action were short. And importantly, every single party in the Dail (bar Labour) backed them at the time.”

    * ‘It’ being the ‘bank guarantee’… with the other obligations flowing from that one momentous decision. I’ve accounted for Labour’s volte face, but I can’t account for SF’s other than to say it will hold at least until the point it leaves opposition and joins the government…

    Like I also say above, “time for thought and action were short”. But it was not that short that we did not know by the time the legislation is enacted with SF support what the measure was to be.

  • PaulT

    Mick, read my post, read the RTE report and read the explanation given on P.ie.

    if ‘It’ is the ‘bank guarantee’ than you are (as I’ve already shown you) wrong.

    The RTE report states that SF voted against it.

    P.ie outlines the reasons why

    You are trying to do what Labour gave up trying to do, that is to merge the two Bills into one, SF voted for the first one which gave protection to bank a/c savers etc, and against the one that came after it which bailed out the bankers (the one Gilmore is implementing)

  • andnowwhat

    I don’t have southern TV but I hope this makes it on to the news. This is not some fringe journo who can be dismissed as some leftie but it does confirm what the left has been saying.

    Banks have been where they were in 2008 before and on one occasion, the decision was to take it on the chin and camcel debts. We’ve all heard the wee mumble at the end of financila ads that say, your investment can go down as well as up. Clearly, this only counts when it comes to the normal person, nit the banks.

    The shinner’s flip doesn’t wash. They can’t pull the cross bench Iraq war excuse of “based on what we knew at the time”. There were enough journalist and experts who proclaimed the sell-out as well as the genuine left wingers to let the shinners know what was happening.

  • Mick Fealty

    Paul,

    What andnowwhat… said…

    You’re making a distinction that did not substantially exist at that time. We knew and we still know we knew the day after the 28th September what Lenihan proposed to do.

    SF backed him. The oppositional line came in later, possibly when they’d had the chance to appraise themselves of the the nature of the opportunity it presented them politically.