Peter Sutherland on the Irish Economy

The text of Peter Sutherland’s speech to the Institute of Directors is below:

Notwithstanding the successful auction of €1.5bn of government debt on Tuesday, there is no doubt that in recent weeks (and in particular in the last two weeks), Ireland’s position in the debt markets has deteriorated markedly and the sale came at a high cost. This has been the consequence of a number of factors. Some of these are objective facts about the dire state of our public finances. Others are the result of market perceptions. It is hardly surprising at present that there is an air of fatalism consistently nurtured by negativism but it is surely not in our character to give in to this. We can and will get out of this mess if we have the will to do so.

Let me say a word first about market perceptions. We seem to have a remarkable capacity to damage our public image abroad. The prevailing and understandable sense of depression in Ireland is made worse by a media often seemingly intent on presenting the worst perspective on current events. The recent Barclay’s analyst report, which was wrongly presented by some in the Irish press as being far more negative than it actually was, is a case in point. You may say, “Well so what? Those professionally concerned with our credit worthiness surely do not decide their approaches on the basis of second hand commentary on an analysts report?” Well, yes and no. The national media reaction is taken seriously and market reactions are often instantaneous.

It is time that we separated two big issues, the underlying budget deficit and the bank crisis. The first of these presents a very challenging issue but it can be dealt with if we have the collective will to do so. The collective will can only result from an understanding of the facts. We are running a revenue to spending gap of circa €20 billion p.a. and simply cannot continue to do so. As Willem Buiter, formerly of the London School of Economics, said this week, the cost of borrowing is becoming unsustainable. Our national debt is accumulating still at an alarming rate as a result of government spending but is being obscured as an issue in public debate by the constant and intense focus on the nature and effects of the banking crisis. Terrible though these are, they are identifiable and should be considered separately.

Unfortunately the budget deficit is not going to be solved by growth because the required level to do this is outside any reasonable forecasts. Furthermore growth is not going to be adversely affected by the right kind of cuts. Even if things go reasonably well in the global economy the most that the majority of commentators expect is anaemic growth in the US and a broadly similar pattern in the EU. Whilst the likelihood of a double dip in the OECD countries is small we are not going to be driven by an external locomotive in Europe or the US to very high growth rates. We can, of course, do something about our own growth prospects ourselves. The Nordics have proved this. This however can only really be based on improved competitiveness and this in turn requires many more hard decisions. Competitiveness is all about productivity. Our costs are still far too high. We have really failed to benchmark our costs – particularly but by no means exclusively, wages and salaries – to other European countries. If we did so it would be apparent that we are still way above average in many areas particularly in the public sector and this says nothing about pension costs. We have to recognise that as currency devaluation is not an option downward flexibility in wages and prices is essential to avoid unemployment. We also have the McCarthy Report recommendations which remain largely untouched. I wonder how many of our politicians or commentators have actually read it. These show viable routes to cost reduction. The Competitiveness Council too has been pointing out the path for years but has largely been ignored.

The figure of €3bn has been postulated as the improvement to be sought in the next budget. We are told that this is all that the political system can bear but if all the mainstream political parties accept that more is required (although disagreeing perhaps about where to find the 3bn) and are prepared to say it, we can find a way. The Governor of the Central Bank has said we should do so. These cuts involve pain. But the alternative is much greater pain through the higher cost of borrowing if we fail to act decisively. Further as a result, the scale of future adjustment would be higher. Almost a year ago we acquired a credibility that is in danger of being lost. We acquired it because of a brave budget. Since then others in the periphery have stepped up to the plate too and some appear to be going further than we have contemplated. They have been politically helped to do so initially by the example of Ireland. We now have to step up to the plate yet again to recreate confidence. We will be given no benefit of doubt and reliance on growth is not going to work. Our GDP growth may look reasonably good but we live in the context of a weak external environment and tax returns are much weaker than expected.

A number of alternatives to the approach I have outlined have been muted. One of these is to aim for a much slower rate of budgetary adjustment. Allegedly this will keep the economy in a more positive state. This simply will not fly as an option. Any weakness in one budget will be punished by the market in a manner which we will be unable to take. In any event it is often a shorthand for avoiding decisions that will in fact result in greater efficiency. So also with the argument about restructuring our debts or default. This would leave us without the capacity to manage our own affairs or to raise finance effectively at all. It simply is not an option to choose. So we must follow the painful but plausible course of continuing to reform our economy in a manner that removes the glaring inefficiencies and excesses of the past.

The Financial Times amongst others has put forward the classical market economist case for the removal by the government of its support for bondholders.  Superficially this may appear appealing and I believe that countries in Europe and elsewhere will eventually introduce a legal infrastructure to allow for the orderly winding down of banking entities and instil moral hazard.  However a bank resolution process in Ireland now is the not the answer to the current problems we face. While agreeing in principle that bondholders should not be protected because they take risks in making their investments and should take the consequences if these go wrong, to remove such protection now in the case of Anglo-Irish Bank might well not be a wise course of action for a number of reasons.  If a Bank Resolution Process such as that introduced in the UK were to be passed to allow an orderly winding up and to expose bond holders of subordinated debt and senior debt (not covered by current explicit guarantees issued) then the total maximum saving through creditors taking losses would be €5.1bn.   The reason why the figure is only €5.1bn is because as bonds have matured since September 2008 they have been paid off at par and new funding has come from the ECB, the Irish Central Bank and explicit government guaranteed new bond issuance. Presumably the other element in the balance sheet namely depositors would continue in any scenario to be protected So whatever the total figure works out as being only a small proportion could be saved. The risk of taking any such action is that the price would then be paid by the remaining Irish banks which still require external capital and funding and by the Government itself who then need to deal with the increased losses arising from a more immediate wind down of Anglo Irish Bank.  This view is postulated on the current state of incomplete knowledge as to the actual figures relating to both Anglo Irish Bank and AIB.

Incidentally no other OECD country (other than Iceland) has allowed a major retail bank to default on its senior debt. While the UK has a special resolution regime it has never used it to restructure senior debt. The FT proposal is flawed in theory and extremely damaging in practice.

The “collateral damage” of such a decision would be very serious. For a small country such as Ireland to default on government guaranteed debt when the funding position of the government (and the other Irish banks) is already precarious, would surely precipitate a funding crisis both for the sovereign and the banking system as a whole.

A broader default would also bring few benefits but huge costs. Ireland’s principal fiscal problem is its large primary deficit (rather than a large outstanding debt level). Compared with countries that have large outstanding debt levels, default is a relatively unattractive option for Ireland (because such an option would do nothing to address Ireland’s primary deficit but would cut off its ability to fund its deficit).

110 replies on “Peter Sutherland on the Irish Economy”

I agree. We need more savings. I propose that we restrict pensions to ‘retired’ ex-senior public servants until they have reached retirement age. 67 now, isn’t it?

Twil be alot of pol’s taking pensions after the next elections…
Might be best to means test these….

I’d agree with his comments on the deficit. I think his presentation of forcing losses on bondholders is misleading. He presents the gains to the exchequer in the context of the guarantee being in place but then presents the “collateral damage” in the context of defaulting on the guarantee. I don’t think any commentators in favour of burning bondholders have suggested not honouring the guarantee.

There seems to be three options: default, default+inflate and inflate. The touted option ‘grow’ our way out is not possible as it means drawing down additional credit – and creating more debt. Seems to be a logic deficit somewhere.

Brian P

“Goldman Sachs Millionaire Urges Wage Cuts For Debt-Laden Irish”
Oh Swift where art thou? Old Arthur gets his own day!

@All

On a quick read – much I agree and much I disagree ….

As a matter of public interest, is Citizen P. Sutherland resident in Ireland at the mo for tax purposes?

“Our costs are still far too high. We have really failed to benchmark our costs – particularly but by no means exclusively, wages and salaries – to other European countries.”

I do not disagree with the analysis but here is the wealthy chairman of the international unit of an investment bank where inflation of entitlement appeared to have never been a concern in recent decades.

Besides, during the bubble period Peter Sutherland also appeared to have been supportive of official Irish policy.

During the worst period of the Macondo well blow-out in the Gulf of Mexico, Peter Sutherland had an op-ed article in the FT and he was described as a former EU competition commissioner.

What struck me at the time was that the chairman of BP in the period 1997-2009 was not being held to account for the safety record in particular the lessons learned from the devastating Texas City refinery explosion in 2005.

The immensely wealthy PS was AG for about twenty minutes, back in the 1980s. Since then, he’s been on a state pension – currently north of 50k. Peanuts to a GS millionaire, of course. And taking away such privileges wouldn’t have any effect on the deficit.

But it’s hard to stomach a lecture on sacrifice from a banker who’s had his lips clamped to the state tit for thirty years.

There is something particularly revolting about being lectured by Goldman Sachs representatives.

Anybody question him about recent Senate investigations, the fine by the FSA, the skullduggery with the Greeks, and yesterdays revelations about their duplicitous carry on with Quiin group and NTMA?

@Peter
Obviously this statement from Suds has us both throwing up simultaneously if for slightly different reason. In future I will have the Alka Seltzers at the ready.

@ Ahura

“I don’t think any commentators in favour of burning bondholders have suggested not honouring the guarantee.”

(coughs) Brian Lucey…

The key thing to understand here is that the losses that can be forced on Anglo bondholders now has a fairly low ceiling. Subs will take 70-75% losses via tender/buybacks, and ung’teed senior now only represent around 5bn in holdings. Even these guys could not be “wiped out”, as they’d still be due a very decent payout even via liquidation (probably 70-80 cents). So we’re talking a couple of billion, tops. Sure, every penny counts these days, but to think it would not, as the first enforced senior debt loss-transfer in the EU, endanger the funding of other Irish banks, or even the Irish state, is a tad unrealistic.

On the deficit he is again right – 3bn is now the very starting point for discussion, with something 10-20% higher probably required to calm the markets, the deflationary effect of this notwithstanding.

@ AMac

seriously man, the constant and endless GS bashing is getting a tad repetitive and boring. Sutherland is probably the most internationally respected and well known Irish business person. His stature is unquestionable. If you could address his arguments rather than your pet hatred and over-dramatic contempt of GS it’d probably be more helpful.

@ the loan arranger

yeah, that was odd. Has any sovereign nation ever unilaterally defaulted on either its own central bank or a sovereign entity like the ECB?

@the loan arranger; Eoin Bond

… hence to be known as the Celtic Conflationist Fallacy in all those textbooks to be rewritten in various areas …………

from baby squid Suds
“..there is no doubt that in recent weeks (and in particular in the last two weeks), Ireland’s position in the debt markets has deteriorated markedly and the sale came at a high cost. This has been the consequence of a number of factors. Some of these are objective facts about the dire state of our public finances. Others are the result of market perceptions.”

Interesting (surprising?) comment in an article in the Innovation supplement today by Michael Casey wher he claims that:

“..swing to Labour probably accounts for up to 100 basis points of the high yields we have to pay”
I don;t think I have seen that claim elsewhere – Casey was a cheif econmist with CB and is on the executive board of the IMF

http://www.irishtimes.com/newspaper/innovation/2010/0924/1224279238140.html

Incidentally the article is highly critical of our old friends GS also!

Perhaps we should cut the pensions of the parasites who have ripped off this country for years. Let them live on the means-tested pensions of most.

No more multiple pensions. No early retirements. Let them engage in productive work. let them work ’til they drop. That will save us all a few billions and give the old Gonzaga boys something to talk about.

@Michael Hennigan

Indeed: as with the Irish banks, you’d think Sutherland would keep his head down on the topic of safety at BP. Then there was his turn on McWilliams’ Addicted to Money documentary, where he turned up to boost decarbonisation and peak oil. There he introduced himself as a BP man but as far as I recall didn’t mention his role in GS, with big stakes in several Carbon Exchanges and a recent role in some very frothy commodities action. Again, as with the banks, even if you agree with the courses of action he’s supporting you have to marvel at the equanimity with which he pops up to put his personal authority behind them. (I don’t think McWilliams comes too well out of it either.)

@anonym
strange there is no byline to that article in the indo. He’s like money – made round to go around – he certainly gets around

@ Adrian

“Goldman Sachs Millionaire Urges Wage Cuts For Debt-Laden Irish”

Exactly. And is he still holding to his standard interview pre-condition that no reference can be made to his Goldman Sachs role? (shouldn’t RTÉ mention this when they interview him?)

Sure, nominate him for the presidency Philip. A respectable wealthy man like that should be running the country and has every right to tell us over paid plebs what to do.

P.S

No surprise that no-one put up the link to the recent Financial Times editorial. Sure, we have no normative preference as economists do we.

Just seen him on the 9pm news. I’ve a soft spot for Suds but even I was disgusted.
Presumably GS or his mates, are bondholders. Oh it would *only* save 5bn. What was he put on the news for?

To hear Sutherland so casual about ONLY 5 billion being saved just shows disconnected he really is from the average citizen on the ground. Here is another guy reading from the American gospel of positive thinking. I,m glad David Murphy picked him up on the point, that the media were only reporting the facts.

It goes back to a point on an earlier thread. I don’t mind doing what needs to be done – but only those who have to walk the walk get to tell us what to do.

Heard there was a conference today about weather or not the media should report in a positive manner…guest speaker Brian Lenihan. Just report the truth please no need to put any spin on it.

Sarah, you are one of the more balanced contributors here but in this case o think you are guilty of shooting the messenger. Suds views are not what the labour voting classes want to hear but that does not make them wrong. Ironically they will not be popular in the new touchy feely FG of Enda but maybe that is why that party is about to be relegated to also ran status in Irish politics.

@Eoin Bond:
“Sutherland is probably the most internationally respected and well known Irish business person.”

… for certain values of “respected” and of “internationally”.

bjg

@Brian J Goggin

One could quibble about interpretations of “business person” as well. Sutherland has certainly served on many and famous boards, but has he ever had P & L responsibility for anything besides his own bar practice?

Unlike eoin, I do not believe that PS has the good of all Ireland at heart.

He has an affection for his contacts, Gonzaga ol’ boys et al and family who are Irish. But he does say what needs to be done, with a distinct lack of enthusiasm for taxation! He does not even say it is undesirable!

I admire him for his accomplishments. He is one of the most successful of those with ability and has acheived power by his ability. Truly an advertisement for Irish potential and education. He has come through BP and GS wealthier and more powerful than ever. His advice is undoubtedly worth far more than Ireland will ever pay him. He is probably a highly moral person too.

It may have been obvious to him what would happen in Ireland after 1999, given the drop in interest rates upon EZ entry. He made no public protest or warning? He was not obliged to do so and he may have had a conflict with his employer preventing it.

Why would we not take his advice now? Eventually we will run out of items to cut and impose taxes more in line with our competitors. His lack of advice in that area is suggestive of partial interest. He does refer to comparison to competitors for labour costs. Not exactly a masterpiece. But workmanlike advice. Take it!

I prefer to discuss issues rather than focus on personalities. However, we can see the impact of excessive politeness and a deferential media towards those who seek to run with the hare and hunt with the hounds.

Peter Sutherland’s role at GS is to cosy up to governments and of course he went with the flow during the bubble.

Why should his views now be given particular prominence when he calls for hard decisions but avoids any specifics?

“We have really failed to benchmark our costs – particularly but by no means exclusively, wages and salaries – to other European countries,” he says but has nothing to say about the vested interests across the spectrum.

Unless people like him have the cojones to challenge their own comfortable friends to change, the status quo will continue to prevail.

Sutherland who had the financial independence as a multimillionaire, kept his silence about the reckless mismanagement of the economy; I in my limited way, challenged the then conventional wisdom and today, I use facts where available to shine sunlight on the sacred cows, wherever they are on the spectrum, from left to right.

Well said Michael. PS was in a position of power when the bubble was high and said or did nothing about it. What PS says may be correct but for the doctor who poisoned us to be the same doctor who provides the cure is what makes rational debate impossible. The same with the present Government.

@Tull

There might be a column in this but I guess this is where I stand:

Suds has always made me smile and I’ve always been delighted with his success. So no personal grudge there.
Also, I know we have to get the deficit down and have repeatedly supported that.
Also, I have some sympathy with the “don’t talk Ireland down to the visitors” argument. I was in the US when the WSJ article was published and I can see how prominent negative articles about Ireland are a problem. (not that he touched on it here but its part of the current newscycle from gov sources).

But but but two problems with Suds
1. I want to know before he tells us not to negotiate with bondholders what his interests are – does GS hold them – if they don’t surely their clients do. There must be a direct conflict of interest here.
2. He’s rich and honestly, the individual suffering I come across is heartbreaking. And the people I know who are under the cosh are being philosophical and soldering on and preparing for the worst. But its one thing to brace yourself for all kinds of more cuts knowing there’s no way out and another to switch on the news and look at a millionaire smugly inform us that one class of people must not be touched while we must bear the loss.
Maybe there are reasons not to burn bondholders, but I can’t stick taking those arguments from someone who will not be affected in the slightest by any decisions we take. So actually I think the messenger is important. It has to “one of us” if I’m to swallow it.

Reminds me of Seanie advising that the old age pension should be cut!
(Sure would’nt 188 euros a month be fine for anyone?)

Sarah,
It is this “negotaitiong with the bond-holder stuff that is causing the problem. When you have to borrow 15bilion plus in 2011 for the sovereign and re finance 2x to 3x that in the banking system, you are not in a very strong position to negotiate.
Add to the mix that our reduced income levels are above the EU average and out debt level is still manageable at less than 100% of GDP our creditors are rightly pointing out that we look like we are edging closer to a “won’t pay solution”. This is the sort of nonsense one would expect from the extremes of the political spectrum.

Where would we be if we
*were not able to tap international bond markets for the next two year-how big would the cuts in public expenditure have to be
*what do you think would happen to the economy if bank balance sheets shrunk by 20% from here
*what would you think would happen if our EU partners looked at us as not fullfilling our obligations and the ECB decided not to accept Irish collatoral for REPO purposes.

The odds of all of the above happening are slim at the moment but if we look like we are headed along this road they begin to increase rapidly.

Ironically, the media rightly focusses on the damage to our reputation by An Taoiseach’s bachanalia but thus far there has been very little focus on Enda Kenny’s ill judged letter to the EU commission exploring the qustion of an Anglo default. Arguably this has done greater damage.

@ tull
I don’t think Sarah has arrived at those views easily or lightly. Maybe the balance is not where you imagine it to be.

@ Pat D
Your contrarian streak is playing up. Business is business. Lets not confuse it with morality.

@ Michael Hennigan
‘Unless people like him have the cojones to challenge their own comfortable friends to change, the status quo will continue to prevail’

+ 1 as usual. Those with the greatest power have the greatest responsibility.

@ Sarah

following on from Tull’s point…Suds is simply trying to point out that all the negotiation in the world will save us a relatively modest amount compared to our total requirements (Suds says 5.1bn, but its actually way way less than that), whilst also formenting even more negative sentiment for the Irish state and banking system. He rightly points out that it would do more harm than good if we were to try it at this point in time.

@Sarah

just to reiterate, it is hard to take admonishment and advice from somebody who looks as if he did not miss his last meal & who might have a well stocked wine cellar. It does not make what he is saying wrong.

Goldmans is not to be confused with a not for profit org but some of the bashing is a little bit tedious. It is close to the sentiments expressed by OJ Flanagan in the 1940s …”bees to honey etc. etc.”

@ Sarah Carey

It would undoubtedly be a man bites dog story if the GS International chairman advocated radicalism.

@ tull mcadoo

True about what he said but why bother speak in generalities when specifics are required – – be it touching on some taboo issues.

Look at the contrast with Warren Buffett who sometimes challenges the members of his billionaire club.

@MH

The issue is not the character of the man, it is whether or not what he is saying stands up to scrutiny. In this cas, the assessment is correct.

@Danny Haskins – “but for the doctor who poisoned us to be the same doctor who provides the cure ……. ”

Yes I agree. It sounds like the kind of stunt a big bank might pull…… Er, like GS!

@ tull

‘When you have to borrow 15bilion plus in 2011 for the sovereign and
refinance 2x to 3x that in the banking system, you are not in a very strong position to negotiate’

Of course. But we are entitled to enquire whether such a state of affairs has come about. There is a notion called responsible lending, and it has something to do with long term thinking.

While accepting that many mistakes were made in Ireland, (and the need for reform of our public sector and protected professions), a question remains as to why a highly destabilising flood of liquidity was let loose in a peripheral economy. Cui bono, and not just in Ireland ?

The international capital market is dominated by big players, who are handling tons of other people’s money. In those terms, our banks, and our government are small fish with big notions. We got the deals which were handed down to us.

Ordinary savers contribute to some of the bond investing funds, but decisional powers naturally belong to the players. Like other participants at that level, they can have no agenda other than gain. If they had, they would not last long.

Meanwhile haute finance itself has become increasingly short-termist and unstable. High risk investments brings high returns and big bonuses. Massive lobbying ensures that some taxpayer picks up the tab if it goes wallop, so states are being dragged into the mess.

The financial players will continue to push for solutions which preserve their own position vis a vis their global rivals, with blatant disegard for consequences in the real economy. Financialisation is as anti-economic as communism, and just as dangerous.

At EC level, the main concern will be to stop contagion from the Irish bust affecting the big European banks. The local consequences are seen as unfortunate but unavoidable. It’s our problem, unless we manage somehow to make it theirs also. That will mean taking a closer look at some of our home-grown ‘success stories’…

@ Pat Donnelly

He has come through BP and GS wealthier and more powerful than ever.

Hard not to do, if you’ve been paying attention. “Golden circles” comes to mind.

@ Tull McAdoo

Goldmans is not to be confused with a not for profit org but some of the bashing is a little bit tedious.

That Goldman Sachs has a direct interest in this is surely beyond doubt, yet did RTÉ mention it, apart from carrying an uncritical soft interview? No.

@Paul

Enquire away but to what end point will this get you to. We owe billions to financial institutions in other EU countries. They have a problem if we default but we have a bigger problem if we do it at a point where we are still dependent on these markets.

This is stupid.
Let’s just get the ECB/IMF fund now and start negotiating from that.
It really is that simple!

Eureka

Negotiating about what. The Greeks are in the system at the moment. They have agreed an austerity package which is harsher than ours over a shorter time scale. Restructuring will not happen if at all until the end of the programme. no one knows when the Greeks will be able to come back to the markets and at what rates they will fund at.

If we go into the ESF the only certainties are
*our short term funding costs will be 5%
*the fiscal austerity measures will lbe harsher
*our post programme borrowing could even be higher
*there is no guaranteed debt restructuring on offer

@Tull
Ok – this might be completely daft but here’s the idea.
At least we’ll know what we’re borrowing so at some level it brings stability and helps confidence and might be better than the current situation at stimulating growth.
We use the money to pay down debts. We simply say – look we have this money now – you can take 70% of what we owe you and call it quits or you can run the risk that we won’t even be in the Euro when this fund runs out in 3 years time and you could lose pretty much everything. We’re not defaulting, we’re just presenting a more attractive repayment schedule.
Now I know that we will still have to pay back the ESF money but the overall amount to be paid back would be less than what’s currently due – so a saving. And I know Peter doesn’t shop at Tesco but “every little helps”.

@ Eureka

“you could lose pretty much everything.”

We have a net debt/gdp ratio still well under 100%, and we’re still among the richest nations in the world, and we’re suggesting to creditors that they take a 30% haircut? Eh…

So basically we borrow off the EU/ECB/IMF, and then threaten the citizens of the states contributing to the EU/ECB/IMF that we’re going to default on them? At the same time as still using the ECB facilities to fund our banking sector? Are you sure you’ve thought this through?

Soveriegn default, or even a threat there of, at this point in time would see us become a pariah state in Europe for the next 20 years or so, maybe longer. Sheer insanity to suggest such a course of action.

@All

On rereading … I agree with far more of the generalist here than I disagee with – this is P. Sutherland … and this ball-content is essentially present government policy … this could have been written by The Minister or for The Minister or indeed as a signal to Commissioner Ollie R ……….

[or perhaps a final fling of the dice by the Blue Ridge brigade to the Blue Rinse brigade to come to the aid of Arthur’s Party: 0_of_365 teams with 2_of_7 so to speak]:

Returning to the ‘man’, and his use of the collective and inclusive ‘OUR’ – I have had no response to the query on whether Citizen Sutherland is resident in Ireland for personal tax purposes?

@paul quigley
“Meanwhile haute finance itself has become increasingly short-termist and unstable.”
This is the problem with low short-term interest rates and artificially low (QE pushed) long-term ones. It is not sensible to lend long-term when future inflation is likely to mean the cost of money is greater than the return on the loan (i.e. in future). So lending long-term now is likely to lead to a loss in the future. Nobody wants to bake in losses.

So, when you think rates are likely to rise (they can’t really go down), what you do is invest short and churn.

@ DoD

i be surprised if he’s an Irish resident for tax – all his work is outside Ireland, think London is his “home”.

@All

Don’t suppose non-resident citizen Sutherland had any advice for the Institue of Directors on …. er … Corporate Governance?

@tull

Tull can you explain how Greek austerity package is worse than Irish in % terms – I understood that it was very similar in terms of timing and % of GDP but perhaps I’m wrong. Many commentators have stated that Irish austerity is worse than that inflicted by IMF in many case ( I dont have hard numbers / facts on this but am interested in where youre coming from)

Also when you consider that the Greeks are starting from a rather high level of comfort ( i,e retirement age of 61), perhaps they have a greater scope for austerity than us.

Apart from the already mentioned obvious conflict of interest and the wrong messenger/ wrong time issue, most of what he says is true but not exactly new. However I’m intrigues as to how he ignores that the not insignificant interest on the Banking crisis dent when considering the future deficit as well as the way he seems to think that the multi- billion budget cuts are all about political will as opposed to the ability of the people and the economy to sustain it ( it really is an elitist statement by …well… the very embodiment of the elite). Unfortunately he is right that sentiment carries as much in markets as fact but 3 billion in cuts is likely to negatively affect the mood of every middle income person in Ireland which presumably includes business reporters whose reporting will be affected and as such perhaps more negative reporting will continue.
Of course the question is if we don’t go ahead with 3 billion euro cuts and advised market that we will amend the time scale of our deficit reduction by say one year ….. how badly will markets treat us in terms of yield / availability of funding.

We really are in a quandry !!

Edgar,

W. Buiter of Citibank has run some numbers. I do not have them to hand. The Greeks fiscal adjustment to get back to the agreed end point (which is a primary budget balance) is about 15% of GDP. I think the Irish adjustment is about 8% of GDP to get back to primary budget balance.

You are correct that Greece has more levers-the Black economy is double the size of the EU average and welfare benefits are generous. You can retire at 53 if you work in a stressful job such as labouring, hairdressing and journalism!!! Google Michael Lewis’s article for Vanity Fair and enjoy the read.

You are quite correct, the choice comes down to Can pay v Won’t pay. the numbers suggest we can meet our obligations with difficulty. We are still relatively wealthy, Debt GDP including banking is forcast to peak at just over 100% of GDP and debt service costs at just under 5% are manageable. Moreover the scale of fiscal adjustment is difficult but doable as long as the global economy gives us a lift. All bets are off if the world enters recession.

Therefore, our EU partners on whom we depend for refinancing our debts, for continued extension of credit and for cheap financing for NAMA and the banks would view default with very great displeasure….to say the least. I could also point to our dependence on our Euopean partners for end markets for goods and services. Depriving German Savers of their retirement income through default on the bonds they own might not be clever.

Tull,
It wouldn’t be the Irish people or the Irish government depriving the German savers of their retirement income. It would be the stupid fund managers who invested their money in insolvent banks like Anglo without a minimum of due diligence. Responsibility for these losses must be assigned to the right shoulders. It amazes me how the asset management community has almost totally escaped any serious scrutiny in this crisis. Now, if it were an academic doing this piss-poor a job, I’m sure you’d be after their head 🙂

@Tull

I am guilty of shooting the messenger rather than the message in this case, but I think that as crisis nears the edge, then the politics starts to matter as much, if not more than the maths. I’ve never been with the “burn the bondholders” brigade as I acknowledge what sounds simple is not (though I’m still withholding judgment on the A-I subs – there are still cards to play in that game – and whether its 1.5bn or half that, every cent will count). It seems to me that in the past 24 hours the gov has gone on a big PR offensive, this Suds intervention and both Lenihan and DOB speeches to that media conference in Dublin. This is co-ordinated. I guess I’m being a bit perverse – but I think some people have the moral authority to tell me how much I need to suffer – and others don’t. Sorry – but Suds coming on the 9pm news to tell me his clients cannot take losses, but we must, is just too much. He lost me at the “only 5bn”.

If the gov wants to win the PR battle they’d be better off showing Joan Burton and Michael Noonan the books so all this “we’ll take 3bn out and put 3bn back in again” nonsense would stop.

Having said that – the effects of Suds’ cancer treatment appear to have taken their toll. Hope he’s ok.

Garo,
Fair point. But the bottom line is that the average saver will think he has been ripped of by some combination of poor asset managers and the feckless Irish. Is this good for us? Also if a large Franc/German insurer went bust due to investment in the periphs and had to be bailed out would we escape blame. No chance.
Sarah,
agree with you 100%. We need a govt which can lay out a strategy, not this drip feed. I suspect it requires a new broom. So the new person comes in and says we have a problem, here is why it happened, here is what I am going to do- expenditure cuts, taxation, asset sales and this is the payoff. Some sane voices from civil society would also help. At the mo, we have half truths, evasions, bullsh** & a vaccuum filled by scribblers who you wd not trust to run a bath.

@Tull: If people cannot distinguish between a private bank and a country, they can go f*** themselves. No seriously, this is just fear-mongering you are indulging in. Most French/German insurers are serious/conservative institutions and 5bn of Anglo bonds is not going to make them bankrupt. In any case, we have never been told who the holders of this debt are so who is to know it isn’t GS or developers or FF cronies?

BTW, I advocate repudiation of non-guaranteed debt (both sub and senior) only and it needs to be accompanied by a concerted PR effort that we are doing what a good capitalist does. Creative destruction and all that. And that we are drawing a distinction between public and private debt and that all guaranteed debt will still stand and that this only makes our position vis-a-vis soverign debt stronger. Sure, it will lead to a temporary panic but it will subside in a month and in the end, we’ll be better off.

@ Bond, Eoin Bond
Thanks for the analysis.
Either we’re in a European Union or we’re not.
Ireland is in this mess because Jean Claude rang Brian Lenihan and told him no bank should fail.
NOw it’s time to say no country can fail either.
THey will give us our bailout and we will restructure our loans.

@ Garo

actually not that much issue with defaulting on sub and non-g’teed senior – the problem is we can’t “repudiate” it – it will lead to a liquidation and seniors will get 70-80 cents in the Euro via this route. Now, if we think it is worth it to go down this course of action to save aprox 400m of sub and 1bn of senior (vs current buyback in market) then so be it, but please lets no kid ourselves how much can be saved (note: i know you havent necessarily said we can save fantastical amounts, but others have), and lets also not kid ourselves into thinking there will be no downside dynamic from this course of action either.

Garo,

The same houses that bought Anglo seniors are the institutions we require to buy our sovereign debt and roll over our bank debt. We also require the goodwill of the ECB to continue funding our rickety banks. If we go down the route you propose, who is going to pay pensions, wages and the dole. Do you feel lucky?

I’ve come to the stage where I don’t care any more.
They don’t call it a bond market for nothing.
We’re slaves to the money lenders now.
Thanks Brian Lenihan.

@ Eureka

“Ireland is in this mess because Jean Claude rang Brian Lenihan and told him no bank should fail.”

So Trichet was calling Eurozone finance ministers urging them not to allow any bank fail?

I doubt it.

Exactly 2 weeks after the collapse of Lehman Brothers, he was of course concerned about “systemically” important banks.

A builders’ bank without a branch network, at a time when the property market had already crashed, was not in that category.

Trichet wasn’t urging that a blanket gurantee be provided for existing bank debt.

“We’re slaves to the money lenders now.”

True.

Even more so for Ireland and Greece where foreigners hold over 80% of the public debt.

The range for Eastern Europe for example is 25%-40% of debt.

@ tull

‘ Some sane voices from civil society would also help. At the mo, we have half truths, evasions, bullsh** & a vaccuum filled by scribblers who you wd not trust to run a bath’

No personal offence intended, but we have been brought to this pass by a financial services elite, whose sole aim is to retain their status and privileges. Some of the worst, and most egregious BS has come from the ‘sane’, ‘smooth’, ‘reassuring’ representatives of the status quo. There was nothing sane about Greenspan’s Great Moderation, and history will rightly categorise as the scam that it is.

Any global recovery can be based only on new asset bubbles, and worse chicanery in the markets. Rising interest payments will bust us early doors, so we’ll be spectators. If it’s continuing stagnation, we’re bust eventually via debt/GDP ratio anyway. Cuts can alter the timing but not the outcome.

Ireland is a problem for German savers, but it’s a tiny one by their standards. Their biggest problem is that global finance has taken control of their economy and political system. They are up against a cartel in the guise of a free market, and they are running faster to stand still. Sooner later they will wise up to it.

There are many other issues of course, but the vigorish (house take) is just too high. Enough already. There is no way forward for the real economy in Ireland, or the EC, without reform.

@Michael H

Trichet did say “save your banks”. I’m not sure if he said personally to Brian Lenihan, but he did say it.

Tull McAdoo

I agree with Paul Quigley! Plenty of content, which by your manifest evasion, seems incontrovertible!

How exactly is Ireland to pay off the accumulated debt? Suds is quiet on this. He knows those who stay will have debt levels, in addition to their mortgages, of an extra c80,000 Euro per household! With declining incomes for most, how can this be paid off, except with massive inflation?

As the depression deepens the devaluation of currency, designed to bring about inflation, may be seen not to help matters at all! What then? Constantin calculates far more per household and in the end after a decade of deficits he will be correct.

Ireland needs prompt fiscal action!

@Sarah Carey
According to Mr. Lenihan, it was left as an answerphone message in the department of finance. As pressure grew on the Irish banks, Mr. Trichet called the DoF on a weekend morning to speak to the minister and could only leave a message. Mr. Lenihan was at a FF horse-racing fundraiser…
(RTE – Freefall Mr. Lenny talking head).

Suds speech was the clearest presentation of the issues that I have seen to date – a 20b deficit annually is the real problem, with Anglo a smaller issue.

What nobody seems to have mentioned in their proposals to ‘burn the bondholders’ is that these bondholders took a risk, but the risk they took was based on the assumption that a country like Ireland would have a reasonably competent Regulatory regime.

The fact that it hadn’t and that consequently banks like Anglo were allowed flourish is, at the end of the day,the responsibility of the Irish people who collectively installed a Govt which was incompetent.

So on a moral basis there is no case for ‘burning the bondholder’ because they took a risk for a marginally higher return.

On a practical basis who would want to take a risk that having defaulted once Irish institutions would not default again?

In other areas of business in which I have been personally involved there have been very detailed project cost benefit analyses performed, yet the final decision can be significantly affected by the possibility of some possible event which has a massive impact, and in the light of such uncertainty the wise course is to take the safe option. It will be the same with future potential lenders.

@Sarah
The simpsons have already done a movie – haven’t they.
We have our Mayor Quimby and Homer could be MOF.
The bond markets could be played by Mr Burns. Lisa could be David McWilliams. Nelson could be Seanie. Don’t know who Milhouse would be

@AntoinB
I would live to reply in more detail but I’m just too overcome with emotion – those poor, poor bondholders who can’t afford their homes, who can’t afford their gas, well my heart just bleeds!

@AntionB’

What nobody seems to have mentioned in their proposals to ‘burn the bondholders’ is that these bondholders took a risk, but the risk they took was based on the assumption that a country like Ireland would have a reasonably competent Regulatory regime’.

Anyone doing any research on advisability on heavy investment here should have been clear that the place has reeked of white-collar unaccountability for decades – and that the ruling party had a long long history of turning a blind eye to extremely dubious banking practices. I mean I know that and I am involved in the arts area FFS. Also a majority of people did not vote for FF led govt in last election. That govt. was as a result of a perverse self serving decision from the vegetables.

I would like to see FG and Lab withdraw pairing – force an election and propose to voters that they will negotiate with all bondholders en-masse immediately for a 50% reduction of debts after said election takes place. I’d also like to see them agree to declare some kind of state of emergency that would allow them to make the anglo books public.

Not going to happen I know. As the great Mark E Smith once put it ‘This place will rise again, Not in ten-thousand years, Too many people cowards and criminals, And the government’s crap’.

‘Anyone doing any research on advisability on heavy investment here should have been clear that the place has reeked of white-collar unaccountability for decades – and that the ruling party had a long long history of turning a blind eye to extremely dubious banking practices’

Step 1 Find a country with lax banking regulation

Step 2 Find the bank in that country with the least committment to traditional banking values

Step 3 Idenitfy the personal and financial links between that institution and the local political elites

Step 4 Reach an understanding that the representatives of that state will take over responsibility for the debts of the bank in the event of failure

Step 5 Strike up the music

@ tull

I have good time for your views overall, but Sarah’s instinct is right. This wasn’t all our doing.

In relation to Sarah Carey’s comment about Suds saying that defaulting on the bondholders would ‘only’ save 5b I think the word ‘only’ is appropriate!

Reason is that the bet on burning the bondholoders can have two expected values – an upside limited to 5b and a downside which involves losses to the Irish economy of well over 5b – if no one lends to us in the foreseeable future. So in this context such a risk for a gain on ‘only’5b is not worthwhile – it would be better described as a bet rather than a saving!

Also if bond holders act rationally their worry will not be about Ireland defaulting, it will be about the example that this could set for other countries, where th bondholders have significantly more funds at risk.In such a scenario the logical action by bondholders is to ensure that they make such an example of Ireland that no one else tries to stiff them!

“The same houses that bought Anglo seniors are the institutions we require to buy our sovereign debt and roll over our bank debt. ”

Proof? And if true, are you sure that those guys are irrational and won’t make future investments on the basis of future ability to pay as opposed to what happened in the past? And will fail to draw a distinction between unguaranteed private bank debt and sovereign debt?

@Eoin: That we still don’t have any movement towards a bank resolution regime is a shocking indictment of this government.

@PQ
Your narrative is broadly correct. However, even though more than 50% of the electorate did not vote for the current crowd and their various appendages, it has now become our problem.

My objection to some of the proposals around debt default and restructuring is that there is a certain amount of wolly and wishful thinking. Much of the narrative runs like this-you borrow from a guy and then refuse to pay back even though the ability to repay is arguably not in question. Then you expect the lender to extend more credit after you have defaulted. The world does not work this way.

In the end, we may end up defaulting or restructuring but there is way more pain to undergo before that happens. Living standards probably have to fall by 20-30% from here before our creditors become convinced of our inability to repay.

AntoinB

very gloomy but probably correct.

@tull mcadoo

‘Living standards probably have to fall by 20-30% from here before our creditors become convinced of our inability to repay’.

Do you think a big ‘IMF riot’ or two would help sway them? Because if SW or Public Service is decimated that’s most likely what will happen. We (taxpayers) are not the debtors – though we have been shoved into that position.

@ Tull
“Living standards probably have to fall by 20-30% from here before our creditors become convinced of our inability to repay”
or 40 or 50 or 60% – why stop at 20-30%?
It’s not all about these parasitic money lenders, incapable of creative endeavour and just trick others into debt.
It’s actually about our society and our country. A huge portion of the new unemployed are professionals. Those that can emigrate those that can’t wallow in unproductive despair.
This current policy only ensures that Ireland will become a joyless dump, with the desperate bankrolling the talentless.
It’s just so sad that we had a shot at this. It doesn’t take much to support 4 million people on an island this size. But thanks to avarice we are fubard. Forgive me but it’s hard to write dispassionately about this. Barely 100 years of independence. To think that people died for the freedom we so easily give away.

THE pay of the top civil servants who run the vast assortment of State agencies, taskforces, semi-states, regulatory bodies and ombudsmen is, quite frankly, obscene.

The former senator Maurice Manning is paid €237,000 as president of the Human Rights Commission. By comparison, Ban Ki-moon, secretary general of the UN, is paid just €171,000.

David Gunning, chief executive of Coillte, which essentially watches trees growing in forests and cuts down a few of them, was paid €407,000 in 2008. That’s more than US President Barack Obama gets.

How about HIQA — the Health Information and Quality Authority? Its boss Tracey Cooper bagged €199,502, or about €50,000 more than US Federal Reserve chairman Ben Bernanke.

Andrew Kelly, of the Blood Transfusion Board, trousered almost €168,000. Across the Irish Sea, the chief executive of the British Blood Service earned €146,000, according to its most recent annual report. The British service got 2.1 million people to donate blood, compared to just 95,000 people here.

The Irish Aviation Authority paid Eamonn Brennan €350,000 in 2008, some €125,000 more than the British prime minister earns. Horse Racing Ireland paid Brian Kavanagh €163,000, or about four times as much as a staff nurse. Digital Hub boss Philip Flynn was paid €187,000, close to what cabinet ministers earn.

Dublin Airport Authority (DAA), which has lumbered us with the €200m great white elephant of Terminal 2, paid Declan Collier €638,000 in 2008, and €698,000 in 2007.

Despite DAA losing a stonking €13m in 2009 and having its €1.25bn gross debt-pile downgraded by ratings agency Moody’s over fears that tumbling passenger numbers might hamper its attempts to pay back loans, Collier bagged a €51,000 performance bonus as part of his €568,000 pay packet. This was in a year when all staff earning over €30,000 were hit with a pay cut and the semi-state introduced a voluntary redundancy scheme to skim off excess staff.

The former oil executive has been at the front of a €2bn splurge to make Dublin Airport capable of handling 30 million passengers a year. But in the real world, passenger numbers have fallen from 23.5 million to the 17 million forecast for 2010. Collier’s salary is more than Angela Merkel and Nicolas Sarkozy’s wages — combined.

Sunday Independent

@ Noel,

Yes, I read the above article you posted, but I did not fully agree with the logic in it, but I understand the general drift.

For example not all of the examples are comparing like with like.

David Gunning (Coilte) is compared with the current US President. Surely it should be the pay of our current president which should be compared to the office of the US president. Alternatively, David Gunning should be compared to the US equivalent in Forestry.

There are a few other examples where like is compared with like etc. But comparing apples to oranges is not really serious journalism.

On the other hand, the question can be asked can Ireland really afford to pay such salaries? Obviously the answer is no.

On a more general observation some of the articles written over the last 24 months contain strong sneering comments against wealth. There is almost a campaign against weath now in the Irish print media. Wealthy people bad, poor people good.

Considering the top 2% of taxpayers pay nearly 30% of all income tax, moving up the scale, top 6% pay 50% of all income tax. This is obviously not enough to placate the begrudgers.

I would like to see everybody weathly, but I realise that if a populist campaign is set up in Ireland and wealth is driven away from these shores then taxes must be increased on the middle and lower classes to make up the short fall.

@ Noel

Maurice Manning is likely also currently drawing a pension as a former senator and he has a public sector pension due from UCD as well.

It’s a handy earner indeed for what could be viewed as a voluntary sector type position.

The insiders have set up a cosy world for themselves and the shattered lives of the tens of thousands of victims of this corrupt system, must seem very remote.

2-3-7k for the HRC???

WTF?

Is it even full time?? This is a democracy – with a functioning judicial system. We have a pretty good police force with an ombudsman system. What do we even need a HRC FOR?

@Sporthog

People who go out and create businesses and jobs can pay themselves whatever they want in my book. I have no problem with wealth. BS quangos paying this sort of money Have To Go.

Our President is paid over 270k euros a year, President Obama gets 300k euros plus 50k expenses. Both get a grace and favour residence.

Care to comment Eureka.

Rioting we don’t need. We have slaughtered each other in large numbers until very recently on this little island, so enough of violence. There is also a large body of unskilled and disaffected citiizens waiting in the wings. It doesn’t take much wit to destroy what others have painfully constructed.

There has to be a way to address the issues of productivity, social inclusion and social responsibility. Why go on paying fat public sector salaries to some while other equally (or more) talented folk have to take the boat ? Why should professionals dictate their own terms of employment ?

Just because we always favoured the existing stakeholders before doesn’t mean we have to do it this time. Let’s support the capable and the responsible for a change, and let others invest in that.

@ Tull
I can see how you would have a problem with us paying a President anything.
A president in a country ruled by the whims of bond-traders is an absolute irrelevance.
What I say Tull, is let the bond-traders choose our next president. Let them choose what to pay them too. They’ll do a great job and as I see it they’re choosing pretty much everything else anyway- Even the living standard of the country as you pointed out.
Odds on their darling lenno would be inaugurated and the hairshirt would become the national costume of Ireland

Eureka,
Ducking the question, I see. I would pay the President a salary commensurate with the powers that go with the office. Something along the lines of a TD’s salary would be ok. I would throw in a set of golf clubs seeing as it is only a part time job. God know we have a lot of those…Moyvalley, Heritage, Bunclody etc.

@ Tull
I see you would keep TD’s too. You really are quite flathuilach with your cash.
In the world you describe we don’t need TD’s and we don’t need a president
All we need is somebody to answer the phone from the bond-traders and decide how much they want to cut off health and education next year.
Why pretend sovereignty?

@Sarah Carey:
“What do we even need a HRC FOR?”

It’s in yer Good Friday (Belfast) Agreement, innit?* If we don’t have one, them-uns** up there won’t have one, and you know what they’ll get up to next ….And then we’d have to have a referendum, and the whole GFA would be torn up, and the Dept of Community and Whatever Else It Is This Time wouldn’t get to build a canal to Clones.***

bjg

* Answer: yes, it is.
** Insert your chosen value for “them-uns”.
*** My King Charles’s Head.

Shur it’s only a few bob here and there.

The prevailing ethos has been to grab as much as one can when the opportunity is there in a system of little or no accountability.

The unathorised payments at UCD may lead to a top up of pensions, while it’s let them eat cake for the ‘little people.’

Three on presidential salaries at the University of Limerick in 2007-08!

It’s relevant again in these times to highlight that in UCD’s case, 78% of staff retiring between October 2007 and September 2008 had years added to their service for pension purposes.

In University College Cork 44 academic staff appointed prior to July 1986 are eligible by legal statute to retire at 60 with seven added pension years. If they stay on until they are 65, they are entitled to 10 extra years.

In UCC eight non-academic staff were given enhanced pensions last year, while Trinity College Dublin gave extra years to 37 non-academic staff between 2007 and 2009.

The pensions are already extremely generous compared with the lot of the private sector.

Why wonder that the country is banjaxed because this is the culture of limited or no accountability and open season on public funds?

…and it appears everyone within the system, are hoping that attention will switch to something else.

‘It’s coming off a broad back’ is the phrase I’ve heard.

There is not much to choose between public servants rewarding themselve merrily from the public purse, and powerful private sector operators milking the public sector for all it is worth. None better at the milking than the finance ‘industry’.
This is not about public v private. It’s about transparency, accountability and fair dealing. If we want a viable state, we have to own what goes on in it.

stupid medicine

the problem now is that we will not accept unpalatable medecine for our stupidity from our own……..ie our government (any government).
It will therefore be necessary for us to be administered by the imf or equivalent to ensure that we dont continue self harm. It has already started to happen but sooner would be better before we become completely terminal.

If you look back over the whole banking crisis, you have

1) 1990s – 2007 Banks and their financial cheerleaders vociferously defend unregulated intl capital flows and banking practices (“We’re adding xxx to Irish GDP aren’t we great, don’t regulate or we’ll go to the Cayman Islands”)

2) 2008 After working themselves into a collapsed bubble, they hurriedly backroom FF into signing off on the greatest scandal in Irish financial history, the bank guarantee. At the time, they hide the true extent of the losses from everyone – including the FF cronies they backroomed into the deal – but we are vaguely told its necessary to protect liquidity.

3) 2008 – 2009 Bit by bit, the bondholders are made whole and new bonds are issued for the banks which bear the “irrevocable” stamp of the sovereign guarantee. All the while, misinformation and lies trickle through to the Irish public.

4) 2010 Now, as the guarantee comes up for redemption, we are told by the same cheerleaders of the guarantee that, while it is in principle a good idea to burn bondholders, we can’t gain much by doing it Because Of the Guarantee! The same guarantee they lied and connived us into signing in the first place!

This is the real difference between free market economics and naked crony capitalism.

The figure – on the terms P Sutherland – is way above E5.1bn, both for Anglo and of course for all 6 banks. Difficult indeed to know what P Sutherland is referring to. Anyone with a Bloomberg can sift through the bulk of the bonds somewhat easily. But then P Sutherland is not listed as having a Bloomberg terminal. And whilst you sift through the data, don’t forget the coupons either!
.
Mind you the paragraph ends with the cryptic phrase “This view is postulated on the current state of incomplete knowledge as to the actual figures relating to both Anglo Irish Bank and AIB”. I’m not quite sure if that is a warning we should take what was written previously with a pinch of salt.
.
Also Irish banks will have no trouble funding once first, the sovereign is seen to be on the right track; second, there is less confusion around their accounts, and three, their businesses are seen as sustainable without the need for protection by the government. Default thus is not the key issue.
.
In any case, the priority has to be to protect the taxpayer’s signature, given the ill winds that lie ahead. And today more than ever. Reinforcing the outlook for the sovereign’s balance sheet will help domestic banks too (with Patrick Honohan’s recent excellent article underscoring the linkages). Indeed recovery in the ability of Irish banks to fund independently, without crutches, requires the outlook for the sovereign to improve.
.
It is true, as P Sutherland says, that the outstandings of Irish bank bonds have fallen sharply since 2008, given the policies of the incumbent government. And they will fall further if yet another buyback is launched. Images of taxpaying sheep being readied for the ultimate slaughter come to mind.
By the way, don’t go asking me for numbers! I’d hope that some concerned citizens would coalesce and take a hard look at the data. I’m surprised at the lack of informed debate here.
.
(NB from the paper. ELG and mortgage issues will have to be removed, as would bonds for exclusive repo at the ECB. The government is obliged to honour ELGs, and must. Luckily there is not too much paper in these categories).

@Ciaran O’Hagnn

‘Images of taxpaying sheep being readied for the ultimate slaughter …’ have been around for over two centuries of documented Irish economic and social history …. I’m gettin pretty sick of it at this stage …….

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