eurozone – Page 9 – Slugger O'Toole

Forming the inevitable coalition is the easy bit

Brian Walker on March 6, 2011, 11:55 am

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No surprises here.. The new Fine Gael-Labour coalition government is planning to impose a property tax on family homes, to freeze income taxes and to review the universal social charge. Sources close to the negotiations revealed that Michael Noonan, the former Fine Gael leader, will be the next minister for finance The negotiators have also agreed to bring the exchequer deficit within EU guidelines by 2015 — a widely-expected compromise between Fine Gael’s proposal of 2014 and Labour’s preferred date …

“Ireland failed this test of prudent fiscal management.”

Pete Baker on March 1, 2011, 3:44 pm

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As RTÉ reports, an independent review of the Department of Finance’s performance over the last ten years has found that the Irish government repeatedly ignored the Department’s “clear warnings on the risks of pro-cyclical fiscal action”. And that, “with very few exceptions”, the Irish government consistently implemented spending and tax relief policies “substantially above that advocated by the Department and Minister”. From the Independent Review Panel report’s summary [pdf file] 6. The Panel reviewed in detail the annual June Memoranda to Cabinet on Budget Strategy. Generally …

Rehn: “I expect this issue of pricing policy will be looked at from the overall European perspective…”

Pete Baker on February 28, 2011, 2:43 pm

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The European Union’s economic and monetary affairs commissioner, Olli Rehn, has been making somewhat encouraging noises [for the new Irish government] ahead of a series of key European meetings for the incoming Taoiseach. From the Irish Times breaking news report “We look forward to continue supporting the Irish people and the next Irish government in the implementation of the EU- IMF program, which is key for Ireland’s economy and its revival,” Mr Rehn told reporters in Brussels. “We have the common …

“Theirs is a vote for equality…”

Pete Baker on February 27, 2011, 10:11 pm

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One of the new TDs for Louth, and still Crown Steward and Bailiff of the Manor of Northstead, Gerard Adams, has thanked all those who voted for his party. “I want to thank everyone who worked for Sinn Féin and all those citizens who voted for us. “Theirs is vote is a vote for equality, a real republic and a United Ireland in which citizens are cherished.” Which might come as news to those who thought they were voting to [unilaterally] …

“It is a doughnut approach to policy and economics…”

Pete Baker on February 11, 2011, 5:00 pm

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The Irish Examiner‘s Conor Ryan points to the hole in the doughnut that is Sinn Féin’s economic proposals for Ireland. Its tactics are concentrated on tapping those who have money, or who at least enjoyed the trappings during the Celtic Tiger. It hopes to bring in €120m on an increased second homes tax, it wants to find €285m on abolishing mortgage interest relief for landlords and €96m on raised capital gains tax. These appear to be realistic targets. But the more …

“The problem is much more a pragmatic rather than a moral one”

Pete Baker on February 10, 2011, 12:09 pm

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In the Irish Times, former deputy director of the International Monetary Fund, Donal Donovan, provides a timely, and useful, analysis of the various parties’ positions on the €85 billion IMF/EU bail-out ahead of the Irish general election. Here’s what he has to say on “burning the bondholders”. From the Irish Times article A major element in all parties’ programmes is the call to renegotiate the debt owed to bondholders. Implicit in the tone of the Fine Gael and Labour (and even …

“We are all witnesses to the game.”

Pete Baker on February 9, 2011, 12:56 pm

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The Irish Times‘ Arthur Beesley reports that EU Council president, Herman Van Rompuy, was accused by MEPs of being less than honest in his account of the Council’s discussion of Frau Bundeskanzlerin’s “grand bargain”. From the Irish Times report MEPs criticised Mr Van Rompuy’s positive tone, one of them saying it smacked of Soviet-era propaganda. “We’re getting feedback as if everything had gone swimmingly, that wonderful results had been achieved,” said German Green Rebecca Harms. “It’s a bit like the …

“To say Ireland is cornered might be to understate the situation.”

Pete Baker on February 5, 2011, 4:38 pm

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No agreement emerged on the details of Germany and France’s proposed “pact for competitiveness” for the eurozone at yesterday’s EU Council meeting. The Irish Times reports “a swathe” of opposition expressed at the meeting, while The Guardian editorialises against the German model – but accepts that the eurozone’s “economic rules do need an overhaul”. The EU Council press release is brief on the topic The economic situation The EU leaders discussed the economic situation in Europe and the eurozone. President Van …

“Yet another crucial moment in the debt drama is upon us.”

Pete Baker on February 4, 2011, 11:56 am

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EU leaders are meeting in Brussels today, including caretaking Taoiseach Brian Cowen, and the Irish Times‘ Derek Scally has had sight of a draft paper on Frau Bundeskanzlerin’s “grand bargain”. From the Irish Times report The draft paper is low on detail but high on ambition: “to create a permanent connection between European competitiveness, growth and viable financial politics”. After presenting the broad brush strokes today, Dr Merkel wants EU leaders to discuss the detail and fill in the canvas by …

Frau Bundeskanzlerin’s “grand bargain”

Pete Baker on February 2, 2011, 1:57 pm

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The BBC’s Europe editor, Gavin Hewitt, has the latest murmurings from Europe on Frau Bundeskanzlerin’s “grand bargain”. If true, it could indicate the price to be paid for renegotiating the terms of Ireland’s €85 billion bail-out… From Gavin Hewitt’s Europe blog Much of the detail is still being discussed. There are differences within the German cabinet and between eurozone countries. However, a broad outline is emerging. Germany will agree to increase the lending power of the main bail-out fund (the EFSF) so …

Gerry Adams: “We would negotiate with the bond market…”

Pete Baker on January 25, 2011, 2:46 pm

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Politics.ie characterised it as a “ding dong” between Fine Gael spokesman Leo Varadkar and the still MP for west Belfast, Gerry Adams, on RTÉ’s Morning Ireland. But it’s probably not as bad as that 2007 debate… It’s towards the end of the 13 minute clip [RealPlayer audio file] that Adams displays what Leo Varadkar refers to as “his ignorance of economics”. “We would negotiate with the bond market after we have straightened out the crisis in our own economy,” [Adams] said. That would …

Euro crisis: Frau Bundeskanzlerin answers history’s knock

Pete Baker on January 20, 2011, 1:38 pm

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History has been knocking for some time… and, for good or ill, Angela Merkel “is perceived to set policy, pace and tone at every turn.” But has the public been softened up sufficiently for historic change? In the Irish Times Derek Scally reports from Berlin In recent off-the-record briefings, the German leader has shown an unusual determination for the task she has set herself. She wants “real harmonisation”, not just “closer co-ordination”. After months of silent backing for her euro zone strategy, leaders in Scandinavia …

Euro crisis: “Slowly the public is being softened up for historic change.”

Pete Baker on January 17, 2011, 5:29 pm

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While the euro crisis rumbles on, and with Frau Bundeskanzlerin promising that “We will do what is necessary, everything else will be discussed step by step”, the BBC’s Europe editor, Gavin Hewitt, wonders “what democracy in Europe means”… If the eurozone group of countries heads towards fiscal union then a further question will surely follow. Can you have fiscal union without political union? Slowly the public is being softened up for historic change. President Sarkozy was not a lone voice when he …

“We do not want foreigners in here” – Redux

Pete Baker on January 15, 2011, 3:33 pm

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And on a somewhat related note, Miriam Lord spots a report of comments by Fianna Fáil TD, Ned O’Keeffe, who, as they say, has form on the topic… From Miriam Lord’s Week Our thanks to reporter Brian Moore of the Avondhu newspaper in Mitchelstown for bringing us this update from Ned, who is doing the nation some service by keeping a beady eye on troop movements in the Far East. In the course of a wide-ranging interview on Cork local …

Angela Merkel: “We will do what is necessary, everything else will be discussed step by step”

Pete Baker on January 12, 2011, 6:44 pm

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Eastern promises aside – and isn’t there something about beware [metaphorical] Greeks bearing gifts? – Portugal’s visit to those reluctant bond markets is described as “successful” by this Reuters report at the Irish Times – €1.25 billion raised with the ten year yield kept below 7%. But as the BBC report points out Bond buying by the European Central Bank (ECB) had helped keep the yield below 7%. “Probably the most important thing for the 10-year yield is that the 7% level …

“the euro crisis had a Christmas break, but it’s back”

Pete Baker on January 10, 2011, 2:03 pm

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With Portugal heading back to an increasingly reluctant bond market, the BBC’s Europe editor, Gavin Hewitt, notes that “White knuckles have re-emerged in Brussels and other vulnerable European capitals.” Sometimes in Brussels I detect that the fight is less to save Portugal but more to ring-fence Spain. It’s the fourth-largest economy in the eurozone. If it needed rescuing the funds currently are probably not there. And then awkward questions would have to be asked – including whether Germans, in those …

Bertie Ahern: “If you ask me, my view is you’re better doing it my way…”

Pete Baker on January 2, 2011, 4:48 pm

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Now that the notorious gambler, and former Taoiseach, Bertie ‘Lucky’ Ahern, has confirmed his decision not to contest the next Irish general election he obviously feels freer to be critical of his party colleagues in government. From the Belfast Telegraph report Mr Ahern, a columnist for the Irish News of The World, told the newspaper Mr Cowen’s administration failed to communicate properly with the public throughout the crisis. He said he carried out daily doorstep interviews with the media when he led …

Euro crisis: “For good or ill, she is perceived to set policy, pace and tone at every turn.”

Pete Baker on December 28, 2010, 9:06 pm

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In the Irish Times Arthur Beesley’s assessment of the “mammoth task” European leaders face in the year ahead is well worth a read. From the Irish Times article Strain and anxiety were everywhere in 2010. Merkel held the line against easy bailouts but her dogged intransigence on core principles led to accusations that she was making matters worse, not least in Ireland. From the summit room came whispered reports of shouting matches between French president Nicolas Sarkozy and ECB chief …

Angela Merkel: “now we need more in common in our economic policies…”

Pete Baker on December 19, 2010, 4:00 pm

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EU leaders met in Brussels last week, for their last summit of 2010, and agreed the text of a “narrow revision” to the Lisbon Treaty – the conclusions of the European Council (16-17 December 2010) [pdf file]. In Taoiseach Brian Cowen’s view, “There isn’t a change of competence or a transfer of competence, so our strong view is that it is compatible with the Constitution.” That would be without the need for a referendum. And from the same Irish Times …

The European view on insolvency

Mack on December 17, 2010, 11:48 am

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The new proposed European Stability Mechanism looks like it will come into force via a change to The Lisbon Treaty, and will avoid facing public vote by referendum. It provides a process for sharing losses with sovereign creditors in the case of national insolvency. (More details on that below). In yesterday’s FT, Lorenzo Bini Smaghi, an executive at the ECB, made the case against sovereign debt restructuring in the Eurozone. He argues that government debt is a central plank of …