Taoiseach’s article in The Irish Times Post author By Seamus Coffey Post date November 2, 2011 Enda Kenny’s article in today’s IT can be read here. Categories In Uncategorized 34 Comments on Taoiseach’s article in The Irish Times ← Thoughts on a Greek Referendum → Anglo Bond Note from DoF 34 replies on “Taoiseach’s article in The Irish Times” Yet another load of talk from the government, with little action to back it up. FG and the Taoiseach’s position amount to little more than: “Sure, we couldn’t be doing something so disgraceful as defaulting on our debts”, and of course the perennial “We’ll hang on like good boys and girls until the EU takes pity on us”. I’m not confident of such strategies. The real gamble that the Government is making here is that Ireland is actually pulling out of this recession. That’s still a big gamble. The slightest misstep and the country will tumble into default. So, if the country is pulling out of it, the general population will have to endure a decade or so of hardship while those at the top can keep the benefits of the boom. However, Ireland Inc will make it. However, if the Taoiseach is wrong, and Ireland isn’t pulling out of trouble, the whole country will default anyway and the money we have paid today to the bond gamblers will have been spent for nothing. I sincerely hope that the Taoiseach really is holding a strong hand; and if not let us pray no-one calls his bluff. ObsessiveMathsFreak, you’re missing the point, we’re neatly lining up behind Greece in the queue despite having been the first ones in the water… As per usual, the legion of devaluation junkies are lining up on the IT’s comments pages, truly theirs is the path to hyperinflation dark side… Beans and shotguns piled high, the misers are hungry 28 months later… @ Shay Begorrah Your comment a couple of threads back: “In related news it appears someone has leaked the list of Anglo bondholders for tomorrows 718 Quarterly Gift for Poor Investment from the Irish people. Is this for real? “Look on Twitter for #bonaid, a grainy image was available here: http://twitpic.com/79hhkh , largest singkle beneficiary is Arca Sgr, who look like nobody of strategic importance to anyone. “Why precisely are we doing this?” Enda Kenny has given his answer here: “Part of the existing agreement with our external partners is not to allow any Irish bank, including Anglo Irish Bank, default on its debts to bondholders for fear of paralysing wider European financial markets. I share the Irish public’s dismay at the cost and unfairness of this policy and the delay it caused to the State’s recovery. “But the unfortunate truth is that the vast majority of Anglo’s debts were paid off under the previous government. Of Anglo’s €97 billion in liabilities in September 2008 when the previous government offered it a blanket guarantee, €3.3 billion in unsecured private debts now remain, including the €700 million due for repayment today. “This horse has well and truly bolted. “In the absence of support from our external partners, potential gains to Irish taxpayers from forcing the bank to default on these bonds, while not insignificant, do not justify the enormous risks from such a courseof action. Allowing Anglo to default would create doubt over the future of the €110 billion in funding being made available by the European Central Bank and the Irish Central Bank to Irish banks at a low interest rate and could mean a renewed flight of funds and even tighter credit conditions for potential Irish job creators.” Here’s one for you. If he had followed this bit with something along the lines of: “To ensure that this appalling transfer of wealth from citizens to financial bodies can never happen again we will, (a) Work with our partners to create an international Tobin Tax as called for by the Archbishop of Cantubury today, (b) Ensure a proper EZ banking resolution scheme to maximise protection for tax-payers as called for by the Central Banks of Europe, (c) Further regulate the banking industry to ban certain classes of derivatives, eg CDOs, (d) Ensure that in the medium to long term the Irish banking system itself repays the monies given to it by the state.” Would you have any more sympathy with today’s decision? What are you looking for? @All By the way, the bit where E Kenny says: “Part of the existing agreement with our external partners is not to allow any Irish bank, including Anglo Irish Bank, default on its debts to bondholders for fear of paralysing wider European financial markets” Er, has that ever been said explicitly before, I thought it was that a nod was a good as a wink to a blind donkey lost in a network of invisible contracts. @Gavin “@All By the way, the bit where E Kenny says: “Part of the existing agreement with our external partners is not to allow any Irish bank, including Anglo Irish Bank, default on its debts to bondholders for fear of paralysing wider European financial markets” Er, has that ever been said explicitly before, I thought it was that a nod was a good as a wink to a blind donkey lost in a network of invisible contracts.” It is in clause 2 of the non-existent Side Letter to the MoU. The way this is strictly adhered to mirrors the way the actually existent clause 1.28 of the real Croke Park agreement makes it null and void if the budgetary outlook envisioned in March 2010 were to significantly deteriorate. Ireland is the location of the BlarneyStone for a reason. @Gavin K Am I reading that document right? Is that a list of people receiving the 700 million? Is Arca SGR SPA receiving 40 million? “COMPANY OVERVIEW Arca SGR Spa is a privately owned investment manager. The firm primarily provides its services to individuals and institutions. It manages mutual funds for its clients. The firm invests in the public equity market around the world. Arca SGR Spa was founded in 1983 and is based in Milan, Italy” Quick technical query, the Commission did recommend that the EFSM start chargin loans “at cost” to Ireland and Portugal etc on September 14th but said the decision was expected to be confirmed by the European Council in the next few weeks (at the time) Does anybody remember this footnote taking place throughout the summit mania of the last 6 weeks? “I’ve heard a lot of spoken words, but nothing has been done. Good words do not mean anything, unless they accomplish something. Words can not repay me for my people ,who died. Words can not give back my land, now occupied by white people. Words can not protect my father’s grave. Good words do not bring back my dead children. Good words will not ensure the health of my people, and do not prevent them from dying. Good words do not give us the house, where we could live in peace and take care of ourselves”. – Joseph, the Nez Perce Indian chief Is one of the IT’s contributors on hols or what? Like, they have to fill up some empty space with Good Words*. Heard Noonan on RTE this am. That man is crafty. Odds-on he knows how bad the economic and financial situation is. Anyone good at those Nash thingies? Brian Snr * @ seafóid: Thanks for that. Nevermind, found it. http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/EN/genaff/125036.pdf @Gavin Kostick Well done for reading “Enda’s” article, you have a much stronger stomach than I but “Ya boo” for making me read parts of it. Not good for the blood pressure or the soul. Firstly from Ireland’s point of view there is no fear of paralysing wider European financial markets, that is one horse that has bolted, been shot and then been stuffed in a none too life like way. From Ireland’s point of view the sooner the current hard Euro consensus is broken and the ECB starts acting like a real central bank the better. Enda is (yet again) confusing the interests of the EPP and monetary hawks with ours. The stronger the Euro stays the more intractable our debt problem for God’s sake. He really is conspiring against our long term interests here. The talk of paying the last of the Anglo bonds as we have paid the majority of them is beneath contempt. Once something has been recognized as a mistake you stop doing it. This is precisely the same attitude that led to the initial bank guarantee growing into the monster it is now rather than being terminated once its damaging nature was fully understood. Fine Gael is a much better position than Fianna Fail was to stop the madness and they choose to continue, their moral failure (and that of their silent Labour partners) is unforgivable. The last paragraph about our external partners is the big lie. Ireland is not in a partnership with Merkel’s Germany or Sarkozy’s France over the current Eurozone disaster – our interests are directly at odds with theirs – we need to publicly acknowledge it. To save the EU we need to remake (or leave) the Eurozone and all our efforts are instead concentrated on preserving the status quo. It would be great to see your paragraph at the end but Enda is unlikely to be the man that makes Fine Gael turn from the centre right to the centre left, this the party of enterprise. My major concern is ensuring they do as little damage as possible to us in the name of right wing solidarity as possible before they join Fianna Fail in the list of national betrayers. As for what I want, I want the political power of the right and the financial sector to be broken in Europe, I am pretty sure that committing ourselves to supporting Merkozy’s Europe guarantees the exact reverse outcome. I aint no European. I am just a leftist. Here is more info on Arca http://www.blindloop.com/index.php/2010/12/20-yucky-facts-about-cockroaches/ And here is Chomsky on Enda http://oneducation.wordpress.com/2007/08/21/chomsky-quotes-on-education/ If you quietly accept and go along no matter what your feelings are, ultimately you internalize what you’re saying, because it’s too hard to believe one thing and say another. I can see it very strikingly in my own background. Go to any elite university and you are usually speaking to very disciplined people, people who have been selected for obedience. And that makes sense. If you’ve resisted the temptation to tell the teacher, “You’re an asshole,” which maybe he or she is, and if you don’t say, “That’s idiotic,” when you get a stupid assignment, you will gradually pass through the required filters. You will end up at a good college and eventually with a good job. They are right not to default on this 700m. However, the Taoiseach’s (or whomever actually wrote the article) is being disingenuous. If the are not going to force the issue on 700m they were not going to force it over a larger amount. Our EU partners would not countenance it. That is that. Also it disingenuous for Kenny to try to take credit for securing “€7 billion in private sector contributions to the cost of recapitalising our banks, including over €5 billion from burden sharing with junior bondholders;” when this followed on from BoI’s efforts and the efforts of the previous administration. Let’s not forget that FG and Labour both said FF’s policy of only seeking hair-cuts from junior Bondholders was wholly inadequate and that they would not let the Anglo and Nationwide pay out any more money to unsecured bondholders. In fairness, they have no choice. However, they knew this before they entered Government. Is is just partisan politics to point these things out? I don’t think so. It can be damaging to the national interest for opposition politicians to take such dishonest positions. Greece’s PM has now called for a referendum which has thrown the entire EU rescue into doubt. He has done this because he has been faced with the same lies from opposition politicians and unions that FG/Lab propogated in Ireland. The Greek opposition say they would do everything differently but they are lying for power. If the Greek opposition were honest they would admit they would sign up to the deal if it were the best they could get. In that case a referndum would not be needed and Greece, and Europe, would enjoy greater political and economic stability. Politically motivated lies corrode the materials our stable society is built on. Mr. Kenny describes s an enormous risk the following sequence of events, going further than what Dr. McHale was suggesting in the case of not repaying the bonds in full. 1. The ECB would cut its 110 billion funding. 2. There would be a run on the Irish banks 3. There would be a stop of cash for SMEs. Is he living on a different planet? Enormous risk? Even Dr. McHale said point 1 wouldn’t happen and only doubts would cause point 2 and 3. This is dissapionting stuff from the leader of the country. @seafóid: Took a little liberty. “Go to any elite university and you are usually speaking to very disciplined people, people who have been selected for obedience.” Jaysus, ‘Nanny Whip’ comes to mind. Better check my Thorizine! “”If you’ve resisted the temptation to “ask” the teacher “Do you have a teaching qualification?” – which maybe they do not, or when you question the learning rationale behind a pretentious muddle of a reading list …, you will gradually pass through the required filters.”” Now those filters? Would they be micron sized? Normally they are autoclaved after use. Prevents sepsis! Brian Snr. @Seafoid If you quietly accept and go along no matter what your feelings are, ultimately you internalize what you’re saying, because it’s too hard to believe one thing and say another The off thread Karlaxon is sounding but I was thinking of good old Noam yesterday in connection with the great 718 million Euro BondAid give away, in particular his idea of how the US was very concerned about the “danger of a good example” of a successful left wing government in Central America as it would encourage others to think about the possibility of government concerned with improving social justice. In a similar manner if Ireland were to start showing insufficient respect to the rules of financial capitalism with Eurozone characteristics and the outcome was favourable it would set a dangerous precedent. The reason we have to keep bailing our private investors is that the Eurozone status quo would be in critical danger if it were shown that another path was possible. A good example will not be allowed. Just a thought…isn’t it odd or peculiar to see a Prime Minister writing in a paper justifying handing over an enormous sum of money without any legal obligation to do so because of threats or perceived threats from an unelected institution. “Prime Minister”? This man is a T-Shop!!! And shure the last one used to do it too, so it’s par for the course… @Ceterisparibus Just a thought…isn’t it odd or peculiar to see a Prime Minister writing in a paper justifying handing over an enormous sum of money without any legal obligation to do so because of threats or perceived threats from an unelected institution. +1 It should be gallingly strange but it is depressingly familiar. It will be interesting to reread Enda’s speeches when they pull the plug 31 October 2011 Neue Zürcher Zeitung Athens ⋅ The decision to apply a 50% haircut to Greece’s sovereign debt has generated much fear and mistrust amongst many Greeks.The state of the economy increases the uncertainty. Apart from banks, other losers following the resolutions of the Brussels summit are importers, pension funds and insurance companies The first opinion poll on the debt haircut question shows that 55% of the Greeks judge the decision negatively. Only 16.9% expect the debt haircut to overcome the crisis, the majority of respondents feel resignation (21%), anxiety (20%) and anger (19%). In addition, 48.8% of Greeks oppose the decision of the Summit, “for the duration of the program to build surveillance capacity on site,” as a restriction on the sovereignty. Nonetheless 72% of Greeks wish to keep the Euro. In the Greek economy uncertainty is mounting because of the possible consequences of the debt restructure. For the recapitalization of the banks alone € 30 billion are needed. For assistance under the program, a support fund has been established, the use of its resources but would lead to nationalization of the affected institutions. Some banks now want to try to raise the necessary capital on their own. The insurance companies, which hold almost € 4.5 billion in Greek bonds, will be hit hard by the restructure. Unlike the banks, there is no safety net for them, even though the industry had requested this months ago. The losses of the insurance companies could add up to € 2.2 billion. Experts in the market estimate that some companies will be unable to avoid bankruptcy. In contrast, the losses of the pension funds (12 billion €) are absorbed by the increase in government subsidies (€ 1 billion per year). This will lessen the impact although the manouvreability of the Government post haircut will be reduced budget considerably. Dealers and traders fear that the high recapitalization loans are still expensive and that the lack of liquidity will have a negative impact on economic development. Importing companies have already begun to feel the impact of the debt restructure. According to the local Business Association, for some days Greek importers have been required to pay for deliveries in advance in cash. Guarantees that are issued by banks in Greece will not be accepted. @seafóid “Guarantees that are issued by banks in Greece will not be accepted.” I have it on good authority that (ordinary) people are taking cash – Euro notes in smaller denominations – out of their bank accounts in droves and stuffing it under their beds. They are frightened to hell that they are going to wake up one morning soon and suddenly find their savings have been converted to worthless new Drachmas. What about the secured Bondholders in IBRC which amount to over €9 Billion who will under their contracts have the right to repayment of their Bonds now because of this default? You dont think that they are going to wait until maturity to find out that they are going to be welshed on as well. The consequence is seen as a Irish Government Default if they are not repaid. Next step is just mayhem for the other 2 Irish Banks and then the Troika will not pay the next tranche of money from the IMF/EFSM/ECB Fund . Then the ATMs run dry when the ECB stops funding to the Banks. For God’s sake any half wit knows there is no viable option but to cough up even if we dont like it . The mistake was made on the 29 September 2008 based on advice from a soothsayer to then Minister for Finance to Guarantee “everything” in the Banks. Some way to run a Government !!! @TRP For God’s sake any half wit knows there is no viable option but to cough up even if we dont like it . At least one half wit knows it. DEMOCRACY DOWNGRADED TO JUNK STATUS Frankfurter Allgemeine ZeitungFrankfurt November 2, 2011 Horror in Germany, Finland, France, even in England, horror in the financial markets and the banks: horror, horror, everywhere – just because the Greek Prime Minister, Georgios Papandreou, plans a referendum on a fateful question for his country. … Papandreou is not only doing the right thing. He’s also showing a way ahead for the Union. In this new situation, Europe would have to do everything possible to convince the Greeks why the path it is pointing to is the right one. It would then have to persuade itself that it truly is. That would amount tsome self-assurance for the equally highly indebted countries of Europe that could finally gain some clarity on what price they want to pay for the intangible values of a united Europe. http://www.presseurop.eu//en/content/article/1128541-democracy-has-junk-status I, for one, concur. Taoiseach. Humbly request that you Call a Referendum. @Minister for Europe Lucinda Creighton Humbly request that you please refrain from tossing ‘grenades’ at democrats, and fellow EU citizens, in Greece. remember what you said about ‘standards in public office’ last year in your intellectual tome at McGill? http://politicalreformireland.files.wordpress.com/2010/07/standards-in-public-life.pdf As per usual, the legion of devaluation junkies are lining up on the IT’s comments pages, truly theirs is the path to hyperinflation dark side… Better that than “Arbeit Macht Frei” austerity plans. @ “Just a thought…isn’t it odd or peculiar to see a Prime Minister writing in a paper justifying handing over an enormous sum of money without any legal obligation to do so because of threats or perceived threats from an unelected institution.” +2 What a sad day for Ireland indeed. Along with the Surrender of November, this day (and Kenny) will down in history. May even be the beginning of the end of his cherished “Republic” (the word he clings to and capitalises as a some sort of comfort blanket) – a government which as Karl Whelan in his expose of Vradkar’s “Anglo Bonds involve no taxpayer money” talking points – would rather ouvertly lie to its own citizens to hide its cowardice and incompetence. I looked up the definition of republic and one states “a state in which the supreme power rests in the body of citizens entitled to vote and is exercised by representatives chosen directly or indirectly by them.” This very article by Kenny negates the claim that we’re still a sovereign republic. Well done the Government of Greece. The fact that right now we’re being lectured by people from big countries that “democracy” is dangerous speaks to the true nature of this European Project – a project which ultimately involved our yoking ourselves to peoples (or more accurately elites) who don’t have deep democratic or rule of law roots. ON ODIOUS DEBT Amartya Sen: LET’S WREST DEMOCRACY BACK 24 June 2011 The Guardian Europe has led the world in the practice of democracy. It is therefore worrying that the dangers to democratic governance today, coming through the back door of financial priority, are not receiving the attention they should. There are profound issues to be faced about how Europe’s democratic governance could be undermined by the hugely heightened role of financial institutions and rating agencies, which now lord it freely over parts of Europe’s political terrain. http://www.presseurop.eu/en/content/article/737641-amartya-sen-lets-wrest-democracy-back Is this the first time since becoming Taoiseach that Enda Kenny has penned an article for the Irish Times (or indeed any national newspaper)? I think the following is misleading “Of Anglo’s €97 billion in liabilities in September 2008 when the previous government offered it a blanket guarantee, €3.3 billion in unsecured private debts now remain, including the €700 million due for repayment today.” The above seems to be meant to indicate that the €700m+ repaid today was covered by the September 2008 guarantee. It is not. today’s repayment is of unguaranteed bonds. @David O’D Thanks for the link, what a pile of self serving crap. @Jagdip Singh In most countries misleading statements cause great scandals. In Ireland they are just more of the puerile pap we are so accustomed to. @Mickey Hickey One of the much much much more substantive presentations – Peter Mair (and only found out recently that he had passed on; a great loss to intellectual life): A key line – “We have a passive citizenry – and this is one of our major problems.” Peter Mair: Paradoxes and Problems of Modern Irish Politics http://politicalreformireland.files.wordpress.com/2010/07/paradoxes-and-problems-of-modern-irish-politics-glenties-2010.pdf @ObsessiveFreak, you think hyperinflation will set you free? You’re deluded and seem to forget what led to the last bout of Macht Frei-ing round dese parts… All Iceland Fans … IMF Update IMF Survey: Iceland’s Unorthodox Policies Suggest Alternative Way Out of Crisis As policymakers continue to grapple with the problems facing the crisis-hit countries in the euro area and the clouded economic outlook for the global economy, attention has turned to Iceland, which three years ago saw its entire banking system crumble in just a few days. http://www.imf.org/external/pubs/ft/survey/so/2011/car110311a.htm Comments are closed.