EU-IMF Programme Details

The Department of Finance has released the documents setting out the “policy conditions for the provision of financial support to Ireland by EU member states and the International Monetary Fund.” (Statement by the Minister here.) The documents are available here. Both the review process (including “actions for the twelfth review”) and the detailed economic and financial policies appear to be very detailed.

61 replies on “EU-IMF Programme Details”

There’s a fair bit of cut and paste in the review phases, just time periods changed on the same budgetary and regulatory conditions.

Page 10 deals with subdebt. It claims that legislation will be introduced before the end of the year. The idea seems to be that if the amount of capital that needs to be committed by the state is very large (i.e. if the bank is insolvent) then the legislation will facilitate haircuts on subdebt.

Important passage from the Minister’s speech:

There has been much commentary about the need for senior bondholders to accept their share of the burden of this crisis. I certainly raised this matter in the course of the negotiations and the unanimous view of the ECB and the Commission was and is that no Programme would be possible if it were intended by us to dishonour senior debt. The strongly held belief among our European partners is that any move to impose burden sharing on this group of investors would have the potential to create a huge wave of further negative market sentiment towards the eurozone and its banks system. That apprehension was confirmed by Professor Honohan in an interview last Monday when he said there was no enthusiasm in Europe for this course of action.

There is simply no way that this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the ECB. Those who think we could do so are living in fantasy land. Worse still, those who know we cannot do so but who nonetheless persist with the line are damaging this country and its financial system: and all for the sake of a cheap headline. It is a case of politics as usual even at this most difficult time.

The idea which is now commonplace, that some how there are no costs associated with default is entirely incorrect. Ireland is hugely dependent on Foreign Direct Investment. These companies have large funds and investments in Ireland and directly and indirectly employ a quarter of million people in this economy. Any default on senior debt and the uncertainty that would cause would undoubtedly impact on the future investment decisions of these companies.

For all the economic and financial content these are blatantly political documents. The current governing factions ensure their favoured vested interests are pandered to and anything that might casue pain is pushed out for consideration by a new government. It puts FG on the spot and concedes huge tranches of public sector and scoial welfare recepient votes to Labour. The cynical calculation is that FG-Lab cohabitation won’t work and they’ll have a sporting chance of securing power ere long in cohabitation with Labour.

From the EU’s perpective it puts a temporary lid on having to confront voters in the core EZ countries (and the UK) with the implications of the stupid investment decisions their banks and pension funds made.

Insider elites rule OK in Ireland and the EU – and Irish citizens pick up the tab.

OK, don’t default on the bondholders, but make the ECB pay for it.

As for “would be possible if it were intended by us to dishonour senior debt”, he seems to think they are ladies of virtue.

It is a gratuitous insult to suggest that those who think we can renege on senior bondholders are living in ‘fantasy land’. This is the type of arrogance that has totally undermined the credibility of Ireland’s political firmament. If senior bondholders are not forced to take some of the financial loss or forced into a debt for equity swap arrangement, it is not clear to me that the Irish economy or Irish society will be able to withstand the €15 billion fiscal correction and the escalating servicing costs of the debt burden that will arise over the next four years. Brian Lenihan mentioned the ‘strongly held belief among our European partners’, but did not mention the IMF view. I wonder does the IMF actually believe that Ireland will emerge from this mess without calamitous economic and social dislocation? Our EU partners clearly don’t care.

Deutschland ein weihnachts märchen ad in zürich tram. Germany a christmas fairytale. Read by b l t d

@Jim Power

Where is the IMF’s official view on bondholder haircuttung to be found? I’ve googled in ‘IMF + bondholder + burden sharing’ etc. but so far haven’t come up with anything other than ‘he said, she said’ stuff.

Tip of the hat to Jim

From what is coming out at the moment, it is screaming the question of why we didnt deal with just the IMF and look on the ECB as just another Creditor.

Fear of aprehension!!!

What is strikingly obvious is that we have the wrong people in the room, and this political cuckoldery should stop.

@Carolus I haven’t been able to locate anything about the IMF’s official view on bondholder haircutting, but i am told by some who met the IMF last week that its position is not as clearcut as that of our EU partners.

One case of active IMF program involvement with a state-guaranteed distressed bank is Parex in Latvia, and it’s messy because depositors got frozen and the focus is on burden-sharing with the shareholders, not bond holders.

Further
From the statements released about the Irish side of the negotiations, one can conclude that these were definitely not negotiations in any sense of the word, or, we had the wrong team in the room…
From the mindset presented to the media, I doubt any of them lost their virginity before their wedding nights…

Jim,

I am told but cannot verify that in previous crises it has occasionally imposed burden sharing. Korea is quoted as an example in 1998. Maybe someone with longer memories could verify. One of the national authorities on the subject is the Guvvnor.

I never thought that imposing haircuts was possible as long as one strove to maintain market access. However, having gone under the wing of the EFSF/IMF that maitenance of credit record is unneccessary. You can’t lose what you don’t have.

I think the decision to recap the banks to 12% requires some scrutiny. What is the point of having high capital levels where their deposit franchise is eroded and where there is no loan demand. This definitely applies to AIB and possibly applies to BOI. If we are going to increase core capital levels to 12% to facilitate write downs or hits to dispose of assets well then it is not a commercial investment.

Moreover, if say BOI has 9-10billion of equity but only generates 600m of profits due to a smaller balance sheet, its ROE will be below its COE and it will not trade at book value. How does the taxpayer/NPRF win in either example.

The least we should be able to do is impose severe losses on subs in AIB and some haircuts on non ELG seniors in AIB and Anglo.

@ KW

“There has been much commentary about the need for senior bondholders to accept their share of the burden of this crisis. I certainly raised this matter in the course of the negotiations and the unanimous view of the ECB and the Commission was and is that no Programme would be possible if it were intended by us to dishonour senior debt. The strongly held belief among our European partners is that any move to impose burden sharing on this group of investors would have the potential to create a huge wave of further negative market sentiment towards the eurozone and its banks system. That apprehension was confirmed by Professor Honohan in an interview last Monday when he said there was no enthusiasm in Europe for this course of action.

There is simply no way that this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the ECB. Those who think we could do so are living in fantasy land. Worse still, those who know we cannot do so but who nonetheless persist with the line are damaging this country and its financial system: and all for the sake of a cheap headline. It is a case of politics as usual even at this most difficult time.

The idea which is now commonplace, that some how there are no costs associated with default is entirely incorrect. Ireland is hugely dependent on Foreign Direct Investment. These companies have large funds and investments in Ireland and directly and indirectly employ a quarter of million people in this economy. Any default on senior debt and the uncertainty that would cause would undoubtedly impact on the future investment decisions of these companies.”

should be made available on a leaflet to every household in the country and placed in ads in every newspaper.
The death warrant for Fianna Fáil.

@Al

The IMF solo run wasn’t on because the banks owe E130bn to the ECB and it wants its money back.

anybody seriously believe the US multinationals care whether we haircut some french or German banks? i just cant see it really bothering microsoft or google. Changing the tax rate yes but not a haircut on bonds.

@ Tull. I agree. It strikes me that credit will be as scarce in Ireland over the next couple of years as Fianna Fail politicians in the Dail. What will it take to change the EU attitude towards burden sharing? Ireland is being used as an experimental guinea pig, but I fear that the experiment is going to get much bigger and more international over the coming months. It is becoming increasingly obvious that the investment in AIB and BOI is not a commercial transaction, but rather a sticking plaster on a leaking steel hulled ship. This particular story still has a long way to run.
@Frank Shareholders have already experienced burden sharing and will do so fully over the coming weeks. However, it is not sufficient and greater burden sharing has to happen.

@ Seafoid

I presume while all three parties were in the same town and possibly the same building meetings could have been held seperately…
I refer to my previous comment…

German lesson for economists No 1:

DE: Geld ist scheu wie ein Reh
EN: Money is as shy as a deer

Perhaps that’s why there’s such a reluctance to take bondholders zum Friseur.

They used to say that owning racehorses was like tearing up tenners in field. AIB is on a par with that but with no chance of a day out. BOI might give you a run for your money is some small handicap somewhere but it is not going to Coolmore.

“There is simply no way that this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the ECB.”

Parse this sentence.

“The ECB, our only source of bank funding, threatened to cut us off, which would force us to make good on the suicidal bank guarantee I just extended for another year.”

This government has been totally captured by external interests, just as surely as Pat Neary was captured by the banks’ interests.

Simon,
think credit ratings, default on seniors and your rating goes down. If your rating goes below A, a lot of couterparties will not deal with you. So you lose biz.

However, now that Irish banks have been downgraded to the very bottom of BBB, most of the rating sensitive custom is gone. No point defending your rep now.

If the increase in capital ratios prove to be too excessive, would that not be good news?

The capital being injected is not just there to support loan growth. It will ensure that the banks will able to withstand future deterioration in the quality of its loanbook. Wholesale markets may also become more willing to engage with Irish banks. In the words of P.Neary “The banks will be will so well capitalised that they can withstand any shock!”

Moreover, if the initial injection proves to be excessive, would that not imply that the contingency fund is also too large?

@ Tull

If the increase in capital ratios prove to be too excessive, would that not be good news?

The capital being injected is not just there to support loan growth. It will ensure that the banks will able to withstand future deterioration in the quality of its loanbook. Wholesale markets may also become more willing to engage with Irish banks. In the words of P.Neary “The banks will be will so well capitalised that they can withstand any shock!”

Moreover, if the initial injection proves to be excessive, would that not imply that the contingency fund is also too large

@Al

From the statements released about the Irish side of the negotiations, one can conclude that these were definitely not negotiations in any sense of the word, or, we had the wrong team in the room…

Perhaps you are right, but this tale has all the properties required for a fresh Dolchstosslegende, i.e. Ireland stabbled in the back by its own craven and incompetent pols who couldn’t kick over a bucket of water without an instruction manual etc..

A kind of turning point in history, a fork in the road, if only …supposin, supposin.. three cats were frozen. And so forth.

Ironically the German volkes stimme views it the other way round — craven and incompetent Eurowhores who sold Germany down the river by falling for the ridulously low 6% interest rate proposal offered by the wily Irish snake merchants, should have given the besterds the marching order years ago, shake an Irishman’s hand and he’ll leave you without an arm …

During a long Business career I learned a lesson that I thereafter always practised ; As a Small entity when taking new Initiatives with recognised Risk dont be a Pioneer (likely to finish up with some arrows in your back) —let a bigger player with broader shoulders and Deeper Pockets take the initiative first , and then if you are still entusiastic be an avid follower. !

In the section “Safeguarding Public Finances” p31 I read “Having stabilised the deficit, albeit at a high level, the steps announced in the Plan will place the budget deficit-to-GDP ratio on a firm downward path. While the debt-to-GDP ratio will remain at high levels for the next few years, it is projected to decline thereafter, underpinning debt sustainability”.
And that’s all they have to say it seems.
I see some people think this represents austerity (although that term cannot be found in the EU/IMF Programme of Financial Support for Ireland). Hysterity is maybe the better term. [from Greek husterēsis coming late, or coming after cf. hysteresis the lag in a variable property of a system with respect to the effect producing it ]

@Jim & Tull
As you say, you should not fear the loss of something that has already gone, forever. The Minister seems blissfully unaware that all of his concerns have come to pass. Deep down, these guys are just so thin skinned. Criticism is always taken personally.

Whatever Mr. Cowan thinks, it’s time for an end to “STFU, and stop scaring the horses”. Many of the people posting here, and speaking in Irish public life, have spent far too long choking back or diluting things that desperately needed to be said for fear of scaring the horses.

Well, the horses have run off now, and there’s no longer anything to be gained from being delicate about these things. If we think it’s necessary to stand up to the ECB, come what may, we should say so clearly. If we think unguaranteed senior debt, or debt that lasts beyond the current guarantee, should get it in the neck, we should say so. If we think we should, or must inevitably, default on some or all the state’s liabilities, now or in the future, we should say so. We have got to the point where there is much more to be gained from brutal honesty than from going with the flow.

And if any of us think we are at economic war, and our supposed partners are the enemy, we should not be shy about saying this either.

I only got around to reading Saturday’s Financial Times this evening.
“Now there is a hope that a Maginot line can be drawn around Ireland”. The EU diktat was written sometime last week and already it and Saturday’s FT are out of date.

FF are absolutely craven. The Croppy boys may have lost but at least they went down fighting.

@simpleton
They may be thin skinned, but they also live on a different planet. Lenihan states that ‘we can emerge from it a stronger and fitter economy….over the last two years, we have won back much of the competitiveness’. I cannot possibly see how Ireland will emerge a stronger and fitter economy if current policies are pursued through to the end. Investment in education will decline over the coming period of austerity, the Croke Park Deal remains in place, many Irish businesses are being squeezed to death by lack of credit and an unsustainable cost environment. I am not convinced.. we may come out fitter, but the stronger bit baffles me. In relation to competitiveness, he is also wrong in my view. Between January 2000 and January 2008 Ireland’s Real Harmonised Competitiveness Indicator appreciated by 28.8%. Between Jan 2008 and October 2010 it has depreciated by 7.7%. This may not be the best indicator of competitiveness, but it suggests to me that Ireland is still a long way from winning back much of the competitiveness we lost during the boom.

@tull mcadoo – “If we are going to increase core capital levels to 12% to facilitate write downs or hits to dispose of assets well then it is not a commercial investment.”

I don’t know what type of laws/rules/regulations cover the NPRF but surely they wouldn’t allow it to invest in something like that? Maybe you’ve found a way to stop them!

p.s. at least owning racehorses is tax free when they make you any money. Do the likes of Mr Magnier still not pay VAT on purchases as well? I bet all those little perks weren’t picked up in the 4 year plan.

Re: Brian Lenihan’s statement. Apart from being insulting to many, it also smacks of the same kind of scaremongering they used in Lisbon 2…… but let’s not go there again eh?

‘There is simply no way that this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the ECB. Those who think we could do so are living in fantasy land.’

Is Angela Merkel living in fantasy land? Aside from arrogance this statement is gratuitously insulting to Dr. Merkel and Pres. Sarkozy.

@Joseph
In fairness to Coolmore, it is important to consider the economic contribution it makes in the Fethard area and nationally. It supports hundreds of local workers and farmers and it is one of the only activities that Ireland is world class at, apart from selling out to external interests. Without Coolmore, that part of Tipperary would be an economic wasteland, just like many other parts of rural Ireland. Incentivising such activities is in my view worthwhile, and should be differentiated from tax incentives given to build apartments and such like in villages and towns all over the country. On a cost-benefit analysis tax incentives for the thoroughbred industry actually do deliver a positive return. Incidentally, i have no interest whatsoever in horses!

@Seafoid
He also said it is not an international agreement and not subject to a Dail vote. This is patent nonsense.

@seafóid:
“It is the droit de seigneur of the bank bondholders” …

… and of the nurses. They won’t not get their pensions: they’ll be paid for out of annual taxation. But the taxpayers have lost the small amount saved towards the bill.

bjg

The other latest FF spin is that Greece want the great deal that Ireland has. No mention of the bordel de merde that is the banking sector.

@ ceteris paribus

He also got away with piloting NAMA through the Dail as a non “money bill” they do what they like with the Constitution. Sinn Fein need to go to the High Court again!

KW
re Ministers speech
“The strongly held belief among our European partners is that any move to impose burden sharing on this group of investors would have the potential to create a huge wave of further negative market sentiment towards the eurozone and its banks system.”

Clearly Angela Merkel must no longer be a European partner!

The point is that Ireland, begging though it was, was given no quarter, while at the same time being asked to play its part in shoring up a Eurozone system on the brink.
Nevertheless the deal is done and we have to move on. But not before attempting to mitigate the worst aspects of the deal.

I refer to the fact that most of the specifics agreed to in the program affect lower income groups very disportionately. This is evident in the reduction in tax cedits and band widths and particularly in the amounts of social welfare being cut.
As pointed out in various threads by Michael Hennigan, letting the axe fall in sheltered sectors does not feature in the specifics of the agreement. Why was this and why does it not give rise to any comment in these threads?

@Robert Brown
I agree with you that someone needs to go to the High Court. Maybe not Sinn Fein though.
I watched the Kerr guy (on Prime Time) say it was not a legally binding agreement.. Utter nonsense.
The Germans have their Professors so maybe some of our eminent Professors would step up to the plate and challenge this arrogent and contemptuous disregard of law.

@Seafoid

They seem to be accepting it. Maybe they don’t want to limit their power now that it is in sight.
Despair is too mild a description watching this train wreck.

@Karl Whelan
“The strongly held belief among our European partners is that any move to impose burden sharing on this group of investors would have the potential to create a huge wave of further negative market sentiment towards the eurozone and its banks system. That apprehension was confirmed by Professor Honohan in an interview last Monday when he said there was no enthusiasm in Europe for this course of action.”

Of course, there’s no enthusaism -that’s the typical naieve europhilic “group think” within Irish politics/overnment/academia who have never played in the real geopolitical sphere-they would rather that the four million of us foot the bill for what is, essentially and by your admission, a “public” good for the 320,000 million residents of the Eurozone. And remember – that “public good” is costing us 20,000 per head but spread accross the EZ would total a mere 200 euro per citizen.

What we have here is the concept of Mutually Assured Destruction – where Ireland and the “EU” have options to threaten each other but where a zone of mutual benefit exists and should form the grounds for agreement.

In return for us using 50% our GDP to keep the holders of “Total Debt Certificates (including bonds)” in Eurozone Banks in faraway countrues- currently totaling 6,462.8 Billion euro- comfy and happy- we get what? An interest rate “subsidy” worth 3 Billion per year (which we wouldn’t have needed if it wasn’t for the guarantee in the first place).

The last time I checked, the Irish bank bailout was going to cost Irish taxpayers 2/3 of the cost of the AIG bailout and that was not foisted on just 4 million taxpayers of, say, South Carolina.

“There is simply no way that this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the ECB. Those who think we could do so are living in fantasy land.”

Or how about this – there’s no credibile way that the ECB can shut off liquidity to our banking system because to do so would create a significant risk of a eurozone bank run – beginning in the peripheral countries and destroying the EZ banking system.

All for a measly 250 euro per EZ citizen? Or printing a bit of money? Or a few weeks of criticism in Bilt. Sarko and Merkel are politicians – NOT insane.

The answer – renegotiate a way to either socialise the senior bondholders at the EZ level or else haircut. Better still, do it in concert with a few other players with similiar interests.

The “Europeans” won’t be “enthuastic” about re-opening what was a superb deal for them but neither did the Soviets/Americans like dealing with each other!!!

Churchill said “courage was the most important political virtue because it guaranteed all of the others.”

This’ll take guts but it needs to be done – particularly while some non-ECB people have major exposure to BOI/AIB.

I have made this argument several times on this forum and have yet to hear a supporter of this “rescue” refute a single point in this logic.

@ All
“sheltered” sectors? welfare rates, taxes on the rich, nurses pensions. Blah Blah blah.

Is this an Irish thing – the central EZ countries are in the process of extracting 60% of our GDP out of our country- and we’re not doing anything about it? Rather we focus on how our neighbour might be paid slightly more than us.

@Jim Power – “Incidentally, i have no interest whatsoever in horses!”

You’re sure you don’t have a brother called Paddy?

A fair point though and well made.

# seafóid Says:
December 1st, 2010 at 6:42 pm

“@Al

The IMF solo run wasn’t on because the banks owe E130bn to the ECB and it wants its money back.”

The ECB couldn’t have pulled the plug if we had gone to IMF. That would have caused us to default straight away- the very thing they are trying to avoid.

@ ceteris paribus

I was for playing by the rules of capitalism. burning the bond holders, debt for equity call it what you will, from the start. Those that opposed this have turned private insolvency into state insolvency and intergenerational debt. Merkel spoke boldly about bank resolution and sovereign debt resolution frameworks for 2013 but at the end of the day she acted in the short term interests of German banks. This loan document will be what the next election will be fought on, if it is not rejected, by failure to pass the budget or court challenge then I can see Ireland spiraling out of control.

Right now, the law in Ireland is in the gutter, those involved in that august profession might do well to realise, before it is too late, that a lot of people see them as being a huge part of our problems. The tribunals, the revolving doors, the fact that white collar crime is beyond both the pale and appetite of their jurisprudence, not to mention the manner of judicial appointments. Judges are FF or FG etc. The same family dynasties crop up to remind us that it is not just Krugman’s crony capitalism, that is alive and well in Ireland. The legal and political hegemonies have thrived in concert, in what might best be described as carefully choreographed set pieces. In Ireland there is no moral hazard for white collar crime WCC.

When Mr. McKillen went to the High Court he had little prospects, NAMA being a piece of FF legislation. I wrote to the FF president asking her to refer the NAMA bill to the Supreme Court of course I knew I was wasting my time as this was FF legislation.

I don’t care who initiates the action as long as they do it! I thought “Animal Farm” was a great political allegory. However, the historian who writes factually about the loss of Irelands economic and political sovereignty will easily surpass that book without having to use a single metaphor.

Still making my way through the documents but what do folks think might be contained in what the Irish Times today call “a side letter agreed with the EU and IMF outlining confidential measures for the banks” which was “withheld from publication”. Despite talk of the “Garda and nurses salaries”, all of this is about the banks and yet we don’t seem to know the conditions under which the ECB will continue funding the banks or why the banks now need new capital – and in the short term the priority is not funding public expenditure which is “fully funded until the middle of next year”, it’s to ensure we have a functionning banking system so why can’t we get the details of what is being committed to in this area?

http://www.irishtimes.com/newspaper/frontpage/2010/1202/1224284574676.html

This document should be read out in full on national radio…

e.g.

“the central government will accumulate no external payment arrears during the programme period. For the purposes of this performance criteria, an external payment arrear will be defined as a payment by the central government on its contracted or guaranteed external debt that has not been made within 5 business days after falling due.”

or

“Performance criteria under the programme will be monitored using data supplied to the IMF. The Irish authorities will transmit promptly any data revisions in a timely manner.

The DOF will report the Exchequer balance to the IMF staff with a lag of no more than 7 days after the test date

The NTMA will …”

This is a document where the Irish authorities pledge their loyalty, cooperation and obedience to the new regime. It can be summed up as

“We, the civil authorities of Ireland, welcome our new IMF overlords. We would like to remind them we can be useful servants in rounding up the population to work for them.”

Are folks aware of the NTMA publication yesterday which sets out the rates to be charged on the bailout

“(i) IMF: 5.7 per cent per annum: The IMF lending is denominated in the Fund’s unit of account, Special Drawing Rights (SDRs). The SDR comprises a basket of four currencies, Euro, Sterling, the US Dollar and Japanese Yen. The IMF’s SDR lending rate is based on the three month floating interest rates for the currencies in the basket. In the presentation of the financial support programme the interest cost on the IMF’s floating rate SDR lending is expressed as the equivalent rate when the funds are fully swappedinto fixed rate Euro of 7.5 years duration. This expresses the interest rate in terms which can be compared with the cost of borrowing from the EU sources.

(ii) EFSM: The EU has agreed that funds from the EFSM will be at a rate similar to the IMF funds, i.e. 5.7 per cent per annum.

(iii) EFSF: 6.05 per cent per annum. In order to obtain funds for on lending to Ireland the EFSF will borrow on the international capital markets on the strength of guarantees provided by Euro area countries (excluding Ireland and Greece). In order to obtain the top AAA rating from the credit rating agencies it was necessary for the EFSF to put in place certain credit enhancements in the form of collateral and the cost of this arrangement is reflected in the interest rate charged by EFSF on its lending. The technical assumption is made that the bilateral loans from the three EU Member States will be on the same terms as the funds from the EFSF.

http://www.ntma.ie/Publications/2010/TechnicalNoteOnEUIMFProgrammeBorrowingRates.pdf

@ Karl thanks for pointing this out
FROM Brian Lenihan
“The idea which is now commonplace, that some how there are no costs associated with default is entirely incorrect. Ireland is hugely dependent on Foreign Direct Investment. These companies have large funds and investments in Ireland and directly and indirectly employ a quarter of million people in this economy. Any default on senior debt and the uncertainty that would cause would undoubtedly impact on the future investment decisions of these companies.”

So here we have it.
Some very good evidence that senior bond holders in Irish banks are not primarily little old ladies pensions but are in fact also investment of the profits of some of the FDI’s. Also in fearing for the loss of these debts they have lobbied Government to ensure that they are not touched.

Given the proportion of our GDP they generate that would have been a fairly easy sell for the MNC’s. I guess it shows how little room to maneuver we actually had when it came to bailing out the Senior bond holders. Little did we know we would be hitting th profits of some of the countries biggest employers.
But here is the disgusting thing. Even though many of the profits have been all the greater due to our very generous Corpo Tax rate and even though it is fairly certain that their funds would have been very well spread, with Irish Banks only accounting for a small amount of their investments. They were still able to hold the government and the people over a barrel. It says it all really. Unless the Journalists in this country get the list of senior bank bond holders and publish the money trails of each one then the Irish people will have taken on this debt completely blindly.

Why not default on all bank debt held in proxy by ECB and blow up the euro?

Each EU treaty is layered upon the previous ones and they are interdependent.If the euro goes the Maastricht treaty is defunct as is each succeeding treaty ,Nice and Lisbon.
This will mean the 10 accession states from 2004 are no longer entitled to free movement into Ireland and all rights to employment and social welfare also goes.Given there are over 40,000 accession state nationals on the live register this will be a significant saving.

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