Europe – Page 17 – Slugger O'Toole

Details of Ireland’s €85 billion bail-out agreed

Pete Baker on November 28, 2010, 6:58 pm

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As RTÉ reports, European Union finance ministers have agreed the €85 billion bail-out for Ireland. Of the total package €35bn is to be used to support the banking system. Of that €10bn will be used immediately to inject fresh capital as a buffer against expected loan losses. The remaining €25bn will be made available as a contingency fund, effectively a massive overdraft facility, to be drawn down by the banks as and when required. And the other €50billion? The Irish …

Euro crisis: “The avoidance of such a meltdown must be the over-riding interest of both Ireland and Europe now”

Pete Baker on November 26, 2010, 12:14 pm

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I’m not entirely convinced that the “strongest argument against a State default has disappeared” completely, but in the Irish Times Dan O’Brien provides the rationale behind the argument against a default in the short-term It is no longer in Ireland’s narrow national interest to prevent senior bondholders from suffering the consequences of their own bad judgement. But this is very unlikely to happen, in the short term at any rate. That is so because a consensus exists among European policymakers regarding …

Europe gets serious. May double the EFSF, may burn bank senior bond holders

Mack on November 25, 2010, 5:15 pm

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The Wall Street Journal are speculating that the size of the EFSF may double to almost €1trn, if German opposition can be overcome. This is an effort to assure markets that Europe can bail out Spain if neccessary. Doubling the EFSF’s capacity to €880 billion would remove any doubt about whether the facility has enough firepower to prop up Spain’s government. Such an expansion would require a bigger financial commitment from Germany, where many lawmakers and voters are skeptical about …

Euro crisis: “Come on, Frau Bundeskanzlerin, history is knocking at your door.”

Pete Baker on November 25, 2010, 11:13 am

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The Irish Times reports the comments by chief of the European Financial Stability Facility, Klaus Regling. “There is zero danger,” Klaus Regling, chief of the European Financial Stability Facility (EFSF), told German daily Bild when asked if the euro zone could break up. “It is inconceivable that the euro fails. “No country will give up the euro of its own will: for weaker countries that would be economic suicide, likewise for the stronger countries. And politically Europe would only have …

The prospects for lower CT – clarification urgently needed

Brian Walker on November 24, 2010, 11:08 pm

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On reflection, I agree with the comments that David Cameron did not necessarily go so far as the Bel Tel claim that he had “dropped a heavy hint that calls for a cut in Northern Ireland’s corporation tax would be kicked into the long grass as a result of the collapse of the Irish economy.” On this important point, his reported remarks are far from clear – nor does he appear to have been pressed for clarity – and he may …

Ireland’s Four Year “National Recovery” Plan

Pete Baker on November 24, 2010, 3:03 pm

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The Irish Government has announced details of its, IMF/ECB agreed, four year national recovery plan [pdf file]. The BBC provides some key points. And The Guardian continues its live-coverage of Ireland’s financial crisis. 2.37pm: Cowen has explained that negotiations with the IMF are based on the assumption that €6bn of the €15bn cutbacks will be implemented in 2011. That means that 40% of the total programme is ‘front-loaded’. The aim is to slash Ireland’s deficit to 3% of its GDP. …

Fintan O’Toole sounds great but he’s got it wrong

Brian Walker on November 24, 2010, 12:05 am

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The Republic supports two latter day raging Jonathan Swifts, Vincent Browne who had the plug pulled on him by RTE and Fintan O’Toole. To be sure, there’s a horrible banality as well as tragedy about being in hock to bankers just as it was to 19th landlords or ironclad industrial capitalists. Fintan comes close to recommending revolt, surely a risky approach at this time of high anxiety and volatility. And where is the real strategy in this howl of protest? The primary goal of the IMF-EU …

“It is the long term nature of this crisis that is just beginning to gain recognition.”

Pete Baker on November 23, 2010, 10:27 pm

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If there was any uncertainty about the markets’ reaction yesterday to Ireland’s bail-out, and to subsequent events, today’s plummeting Irish bank shares and more evidence of the fear of contagion in the markets should remove all doubt. The euro has hit a seven-week low against the dollar and global stock markets retreated today on fears that the Republic’s debt crisis may spread to other European countries with large budget deficits. Investors fear that Portugal and Spain may also have to seek financial help. The Spanish …

Stephanomics: “broad lessons for the eurozone are already clear, and not encouraging”

Pete Baker on November 22, 2010, 5:35 pm

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Market Moves notes the reaction to today’s events in their London Market’s closing comments Worries over stability in the Emerald Isle are being compounded as the bailout becomes more and more political by the day, with the opposition party Fine Gael calling for a snap general election, citing public distrust over the handling of the crisis. The risk of contagion still lingers over European markets, with traders now eyeing up the next sacrificial lamb. Spanish and Italian markets are down …

Olli Rehn: ‘it is likely unfortunately to imply tax increases’

Pete Baker on November 22, 2010, 1:25 pm

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I’d wait for the detail, Brian, before declaring anything ‘safe’. RTÉ reports the latest comments from European Commissioner for Economic and Monetary Affairs, Olli Rehn, on Ireland’s bail-out application. From the RTÉ report European Commissioner for Economic and Monetary Affairs Olli Rehn has reiterated that Ireland would no longer be a low tax economy. When asked in an interview with RTÉ News if the corporate tax rate was now off the table for good, Mr Rehn said that by Ireland ceasing …

CT seems safe – and don’t forget the North and GB

Brian Walker on November 22, 2010, 12:35 pm

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Nerves will be stretched until the exact terms of the deal are known. Meanwhile government spin continues to minimise the extent of the damage. The bond markets at least seem satisfied for the moment but what about the Irish people, still much in the dark?. A huge sigh of relief will go up at the one bit of good news for Ireland. At least for the first year, the EU terms will be no worse than the Croke Park agreement. …

“Could a bank bring down a country?”

Pete Baker on November 19, 2010, 12:09 am

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As was indicated previously, the Irish Minister for Finance, Brian Lenihan, has confirmed the conditions under which a bail-out will be required Minister for Finance Brian Lenihan has said that it is clear Ireland will need some sort of external assistance to address the problems in the banking sector. Mr Lenihan said officials from the International Monetary Fund and the European Union were not in Dublin to direct Irish affairs, but to offer advice on the four-year budgetary plan and …

Backfilling a black-hole

Blank on November 18, 2010, 9:49 pm

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Our very own tragicomedy appears in the form of elites whose strategic choices are made contradictory by the fact that, in their haste to wage their own class war against the peoples of Europe, they surreptitiously undermine the very currency union which was their own idea for facilitating capital accumulation on the continent

“In hindsight…”

Pete Baker on November 18, 2010, 3:20 pm

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In the Irish Times Stephen Collins signs off with a line on the electoral prospects of Fianna Fáil that’s worth considering as the ECB and the IMF have those detailed discussions in Dublin. The voters who rewarded it for being so irresponsible in the good times are likely to be merciless now that everything has gone so badly wrong. Read the whole thing. Pete Baker

Now the question arises of the fate of lower corporation tax – north as well as south

Brian Walker on November 18, 2010, 3:05 pm

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Now that the Irish government has come clean albeit through gritted teeth , anxiety mounts over the terms of the bailout, in particular the fate of 12.5% corporation tax. Given the total stand- off between the parties, this seems like a issue of confidence for the survival of the Fianna Fail-led coalition. Internally in the short term at least, they should come through. This is no time for a general election or a handover to a different coalition, particularly one without an …

Lenihan: “if the banking problems in the country are too big for this small country to manage…”

Pete Baker on November 17, 2010, 4:23 pm

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The EU finance ministers meeting in Brussels have denied holding detailed discussions on a potential bail-out for Ireland. From the BBC report [Belgian finance minister] Didier Reynders, who chaired the talks, said the situation was not addressed because the Irish government had not requested financial help. “There’s no reason to ask all the participants for an answer because we did not receive a question,” he said. And why would they discuss it? The detailed discussions will be held tomorrow in Dublin. …

Van Rompuy: “We’re in a survival crisis”

Pete Baker on November 16, 2010, 1:49 pm

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The Irish Minister for European Affairs, Dick Roche, tells European finance ministers not to “panic“… as the EU President, Herman Van Rompuy, panics? A Guardian report indicates the extent of the concern “The Irish problem is spreading, but it could get more volatile,” said Ashok Shah, chief investment officer at London Capital, a fund management firm. “They have to get this bailout, they have a period of time before it gets impossible, before nasty things happen. The longer they leave it, …

Irish showdown likely in Brussels tonight

Brian Walker on November 16, 2010, 12:25 am

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“The creditors say please take the money, and the debtor says ‘we don’t want it’. It’s very odd..” says one observer of the Irish financial crisis. Dublin is resisting an ECB-inspired bailout because it fears the likely terms will damage their holy grail, the prospects for future growth, by imposing virtually insupportable terms like ending 12.5% company tax. On the other hand, you might think it’s just as peculiar for the ECB to insist on Ireland taking the money when …

Reuters: “Talks are ongoing and European Financial Stability Facility (EFSF) money will be used”

Pete Baker on November 13, 2010, 3:43 pm

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Despite the apparent ‘good news’ yesterday, it appears the pessimists may be right after all. The BBC picks up on a Reuters report quoting “euro zone” sources Euro zone sources told Reuters that aid discussions were under way, however. One official said it was “very likely” that Ireland would get financial assistance from the EU facility set up after Greece obtained a 110 billion euro bailout in May. “Talks are ongoing and European Financial Stability Facility (EFSF) money will be …

“This is perhaps a good week to pause and remember them and the long and lonely war that they waged.”

Pete Baker on November 11, 2010, 7:20 pm

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Military historian David Murphy has an interesting article in today’s Irish Times on the Irish men and women who joined the French Resistance during World War II. From the Irish Times article While the Irish contingent within the Resistance was extremely small, it can be shown that a number of them came to the attention of the authorities. It is known that 10 were arrested, tried and later sent to prison, a labour camp or a concentration camp. Four Irish …