Troika Press Statement

We have no press conference with the Troika delegation this time around and have to make do with this press statement.

55 replies on “Troika Press Statement”

Ireland….. A economy & society destroyed by its openness to external capital flows.

The solution – open up the place to external capital flows………

Whatever dudes.

If they’d waited a few more weeks, they could have had the presser at the new T.G.I. Fridays in the old Bewley’s building on Westmoreland St.

@ Ceterisparibus

Thanks for the link.

According to Klaus Regling: “When banks need additional capital they are supposed to go to shareholders, if that doesn’t work they go to the national government, only as a third line of defence could there be a request to the ESM, EFSF,” he said.

So the EU’s rules of capitalism – Bank bonds rank higher than sovereign debt. So buy Commerzbank over bunds? Is that right Klaus? Can someone get Merkel to confirm this? This is mad.

@Peter
Who really gives a toss about the Guberment .. they are only bagmen with the law on their side.
The facade of legitimacy was washed away with that letter of comfort…

The finance minister effectivally said those poor sad amadans can take anything you (the banks) can throw at them as they know nothing better.
We will pay back your debt with less money in our pocket which means more and more people will be thrown under the bus.

Anything less then the printing of Treasury paper now is a sop to the creatures of the credit night who above all else desire blood in the form of interest instalments.

The concentration of the state to collect rather then solve physical world problems paints a true picture of the lie that is the nation state.

It was created by the Dutch Banks many moons ago …. and in the process it destoyed the clan culture over here.

They simply want more blood.

I’ve been in meetings all afternoon so maybe I’m grabbing the wrong end of the stick but…. Noonan is out there today saying Ireland is going back to the bond markets this summer but only if we vote yes to the fiscal compact coz if we vote no we won’t be able to?

WTF?

@PR Guy
This from the Indo
“Mr Noonan also said Ireland will start going back to the international money markets this summer to help pay for the running of the country.

But, as with all previous IMF rescue programmes, there would be have to a bit of “hand-holding” before the country could stand on its own again without the need for emergency financial funding, he added.

Taoiseach Enda Kenny said a shift in the agreement with the troika over how to use the proceeds of sold State assets would help the economy grow.

“I think as well that the conclusion of the discussions between the troika and both ministers now reflects the changed attitude that there is in Europe,” he added.

Changed attitude?
Pay back every cent including 47billion.

re- PR Guy

Gilmore also had a peculiar line of reasoning suggesting that if we voted Yes we were removing the need to access the efsm, but a no vote would necessitate it.

On the issue of the cessation of the press conference, have any agencies or individual journalists criticised this ?
It surely should be highlighted, as was done here, at the head of any coverage of their statements. Much as reporters always note when there is a refusal to
engage from a particular party.
The possibility for a responsible journalism, and the public interest, is considerably restricted by this arrogant treatment from the ‘Troika’.

@ Ceterisparibus

FYI

http://lexpansion.lexpress.fr/economie/les-non-dits-du-debat-sur-la-croissance-en-europe_292557.html

The IT Paris correspondent covered the fact that there is less to this – the presumed re-opening of the fiscal pact by Hollande – than meets the eye on RTE this afternoon. He will, one assumes, cover the same ground in his paper.

Any changes to the signed text would involve re-ratification by the three countries that have already ratified. Such a development would be anathema to Germany. But there is more than one way of skinning a cat e.g. a parallel text the legal nature of which remains unclear. It is unlikley to be of such a nature as to require formal ratification which would not matter greatly if it contained sufficient elements of substance. With the difficulties affecting the Netherlands, the political wind has clearly changed.

Why no press conference? Do we not merit one?
More like we’ve stuck to the programme but we’re still fubard.
What rates on bonds over the summer. Bonds that our children will be paying by the way.
This is getting obscene

@DOCM
A protocol could be added which could be ratified by the three separately. I don’t see any insurmountable legal problem with that approach.
It’s interesting that a German government official is briefing and it’s seems quite clear that there has been a major shift in attitude in germany..probably because of the Franch and Dutch situations.

We would look quite silly to be voting on the defunct “hysterity”version.

All in all it seems to be good news.

Pity our guys are not up to speed!

@Eureka
Ajay doesn’t want to be savaged by Vincent.
I saw something about a teleconference but cannot find any reference to it.
Maybe they don’t want to answer questions about Austerity.

From the Press release:
“Ongoing work to restore the health of the Irish financial system is critical to enabling a recovery in domestic demand.”

Is that really true.?
And if it is really true, why is there an ongoing push to deleverage bank assets.
As I now understand economics, the increased ‘savings’ rate incorporates people/companies paying down loans at a greater rate than new loans are being advanced. This ‘paying’ down loans is not happening by chance. It is happening because the banks are squeezing the hell out of everybody and anybody that has a loan and using every ruse, trick and lie in the book to avoid issuing new loans.

So, I have no idea what the Troika mean when they say:
“restore the health of the Irish financial system”.
But I suspect it is code for getting the bond holders (incl ECB) money back. If that means deleveraging and a continuing increased savings rate, that’s just too bad.
The banks may end up being very healthy indeed from a Troika perspective, with all bondies paid back, but that kind of ‘healthy’ financial system will only be achieved by the complete destruction of the country.

I simply do not buy this ‘”restore the health of the Irish financial system” any more.

This is just another stunt by Noonan to try and frighten voters who know absolutely nothing about bond markets into some sort of guilty, panicky state of mind should they be contemplating a “No” vote.

The government won’t be able to sell bonds if you vote “no” ergo you must vote “yes”.

The government not being able to sell bonds has more to do with NAMA, blanket guarantees the uber expensive Croke Park agreement and recapitalising insolvent, and in Anglo’s case, a moribund bank.

Funds in America are now beginning to see the importance of unfunded liabilities which are looming large in their rear view mirror, “unfunded state liabilities” which, none the less have equal claims to state funds and borrowing.

Such liabilities are going to play a significant role in our rating and in my opinion has not been fully factored in at all. A Euro spent on Bertie’s pension is a Euro less available to be spent on the welfare state or on debt servicing. Ireland has unfunded state liabilities of more than 400% of GDP and 450% of GNP Wait until that particular fact escapes from the Pandora box.

I see Dr Honohan is coming out in favour of the Yes camp…..he does mention the Growth element but I’m curious as to why he wants us to vote yes for the Austerity bit alone….buying a pig in a poke?

But the classic comes from John Bruton…..
“Mr Bruton said refusing to ratify the European treaty would have an adverse effect on Ireland because foreign investors would lose confidence if it was cast adrift from Europe.

“To use the analogy of a household, advocates of a No vote are asking us as a household to take our custom away from the credit union, of which we are a long-standing member and which is helping us through a bad patch, and to place our fate in the hands of the moneylenders and loan sharks,” said Mr Bruton.”

Mickey Noonan is in favour of the moneylenders and loan sharks….maybe he forgot to tell John that our credit union in Frankfurt wants all their money back pronto.

Eureka,
I think the govt and indeed the No campaign are going to get a fright when the electorate rejects the Treaty. Thereafter the EU will circle the wagons with us outside. It is at that point that the truth hits home. Primary surplus straight away, spending down by 10 bn in a mini budget.
Pensioners in Greece get half what they got before the crisis & Uni profs get 30 grand per year.
Then we will be sorted.

@Tull
You are mistaken …. they will print (if they were altrustic ? not)…… the waste is in the suburbs and sub rural parts…..its really not the pensioners unless they live there.
Although Steve from Virgina shares your belief they will come for the pensioners one more time so that the financial system can extract a surplus that can be subsequently wasted on “Growth”
http://www.economic-undertow.com/2012/04/25/hiding-in-plain-sight

When we get a national economy again everything that you thought was real post PD 1987 will turn out to be a nothing.

@Tull

“Thereafter the EU will circle the wagons with us outside”
Maybe they would have a few months ago.

France will come out for a fag and start talking.

Georgie boy might be the only one left inside

@ Ceterisparibus

I have checked the Google translate version of the article and it is pretty accurate except in the reference to “free energy” when what is being referred to by Draghi is structural reforms i.e. an assumed stimulus without a budgetary cost.

The debate on this thread I find to be divorced from the reality of what is clearly being discussed between other European capitals. Any assumptions as to who is or is not up to speed would seem to me to be hazardous in such circumstances.

What occurs to me that the parties both in France and Ireland are effectively in electoral mode and this is never conducive to a clear exposition of the facts.

Seafoid,
The French would not take kindly to somebody upsetting the Apple Tart. They would shrug that Gallic Shrug. Beside one less country drawing from The EU funds.

@DOCM
“The debate on this thread I find to be divorced from the reality of what is clearly being discussed between other European capitals”

Perhaps.
They might not understand that printing (and I mean real printing / not LTRO) will actually reduce real resourse constraints withen the eurozone but I doubt it somehow.

They are owned by the banks and their credit hallucinations – therefore the physical economy is going the way of the Dodo.
This is Fall of Rome stuff.

@ All

For anyone having difficulty loacting SBP article, the following is the relevant extract.

“The Impact circular to members emphasised the union’s opposition to the policy of austerity being followed across Europe, but said on balance the potential consequences of rejection of the treaty for workers meant that it should advocate a Yes vote.

“At worst, a ‘no’ vote would mean that Ireland would not be able to borrow in international financial markets. With access to the European Stability Mechanism cut off, this would lead to a large and sudden reduction in exchequer funding, with dramatic consequences for social welfare benefits, pensions, public services including public service pay, and employment, and domestic demand in the wider economy,” the circular said.

It likened a rejection of the treaty to “telling a bank manager that we didn’t want a guaranteed low interest loan, and would instead take our chances with the money lenders in 2014.”

“This is not a sensible course of action for anyone directly reliant on public funding – pensioners, carers, unemployed, public servants and community workers – or others who work in the domestic private Irish economy and would be indirectly affected by such a decision,” Cody said.

@DOCM

The debate may be divorced somewhat from political reality but reality in terms of the economy is changing by the day.
There has in my humble opinion been another steep downturn in April in the domestic economy. This is based on the industry that I work in and other anecdotal evidence.

I also note that Siemens based in Munich had a 13% fall in orders in the first quarter of the year (Jan-Mar). That should give Prof Sinn some comfort in helping to alleviate the growth in his Target2 balance.
But it could also bring a dose of well needed reality to those dependent on Siemens for employment and give the policy makers a little food for thought, far removed though they may be from coalface of ‘flexible employment’.

@DOCM
That market state propoganda which became popular since the early 1970s

Countries can “Borrow” from their own CB recycling the interest back to the exchequer….ie. creating synthetic greenbacks and if the CBs don’t play ball they can create Greenbacks
The “markets” don’t make money…. Goverments do.

Your another one of those excess savings belief merchants me thinks… the “excess savings” in the west came from commercial bank credit production.
Treasuries can make money too.

We have a extremely ineffiecent resourse utilization because of commercial bank credit production.
A independent Irish State could easily credit public transport with Punts… halving or removing fares for example.
This would dramatically increase resourse utilization withen the economy, reducing the amount of Euros exported for the precious black stuff.

We are in this mess because of the Euro market state economy , not despite it.

@DOCM
It seems clear from the relevant paragraph of the Bloomberg article that Angela is stuck on her “structural” fix but that Draghi envisages more..
“The change in tack was signaled yesterday by European Central Bank President Mario Draghi, whose call for a “growth compact” was quickly endorsed by German Chancellor Angela Merkel. Francois Hollande, the French Socialist presidential election front-runner, welcomed Draghi’s remarks as evidence of the need for treaty changes to boost growth, while questioning the means of getting there.
“It’s not the same idea of growth,” Hollande said in an interview on France Info radio today. Draghi is “adding even stronger competition, liberalization and privatization.”
That contrasted with Merkel’s reaction. Europe needs growth “in the way that Mario Draghi, the president of the European Central Bank, said it today, that is in the form of structural reforms,” the chancellor told a conference of her Christian Democratic bloc in Berlin yesterday.”

I’m betting Hollande will get a compromise.
It’s crazy to have a referendum at this time.

@ Tull
If you do the maths:
Who’s more likely to vote in this one the Yes or the Nos?
I think slightly weighted to the no’s here. So the most likely outcome is a very tight yes vote I think

But the solution to this all along has been default and zero deficit – no point in one without the other. And the punt nua comes in there too

@eureka

Why no press conference. Do we not merit one.

In my opinion NO. After the bailout deal was finalised these chaps gave a press conference from within Our dept of finance where one of our smart journos asked Chopra ” you have been here a few weeks – have you been treated well – what are your impressions ” Chopra beamed, no doubt he would have been briefed about the propensity of the natives to being told that they are nice and you like them and their country. Chopra duly obliged.
They had the measure of us. They can safely experiment here and kick the bejasus out of us while occasionally telling us they like us.

Does it seem at all curious to anyone else that:

One the one hand, prior to the referrendum campaign Ireland’s Finance Minister characterised Willem Buiter’s comment that the country should start considering the possibility of a second ‘bailout’ as “ludicrous!!”

On the other, a ‘Yes’ vote to a piece of bad economics is absolutely imperitive in view of the more or less sole redeeming feature – that it removes any doubt about access to …..drumroll…….a second bailout.

Circle, meet square.

@ grumpy

I have written about that particular piece of hypocrisy ad nauseam. We must vote “yes” because of the “ludicrous” prospect of requiring a second bailout!

In fact, according to Enda voting “yes” is an “insurance policy” that guarantees us access to a second bailout, a scenario that Finance Noonan’s spoke of as “ludicrous”. Why do we need an insurance policy for something which the finance minister said was ludicrous? It is fairly simple really. Croke Park runs out same time as bailout No. 1 is exhausted ergo Bailout No.2 is required.

Just when I was getting slightly optimistic about our prospects Dan O’Brien writes an article in the IT which sent me into negative mode again…a sample

“There is almost no end to the number of issues that would make even the starriest-eyed optimist glum these days, but few cause a greater sense of despair than not knowing what to do about growth, despite the confident pronouncements of those who claim to know all the answers.”

But a good article.

The late American historian Arthur M. Schlesinger,  recounts in his book ‘The Age of Roosevelt: The coming of the New Deal 1933-1935,’ how the president produced a parable of a man in a silk hat who fell off a pier and was drowning in the ocean. A bystander jumped off the pier and saved him, but the drowning man’s silk hat floated away. The bystander was thanked profusely by the man for saving his life. But three years later, the same man attacked the bystander for not saving the silk hat!

Let’s not over-analyse the aptness of the parable to our present grim situation but we are drowning and worrying about the equivalent of a hat at this time serves no purpose.

What will be served if the referendum is rejected and after the initial sugar rush, months of uncertainly follow?

The US economic recovery is again looking shaky; Europe is in recession and I can observe the evidence myself of a slowing in Asia.

That’s the reality — not something to scare people.

There are tens of thousands of jobs in struggling Irish firms that have survived a brutal four years and borne the bad debts of thousands of collapsed companies over the past four years.

Of course looking overseas for solutions avoids addressing thorny issues and upsetting folks at home – – but partytime is not coming back.

Some may dream of President Hollande descending from Mount Sinai with an iPad tablet setting out new rules to bring back happiness.

More likely is that after a short honeymoon, he will be faced with a choice of placating street protesters or the markets – – 65% of French sovereign debt is held by foreigners.

Dan O’Brien in the IT, musing about the Troika’s visit, also decides to let us know that he doesn’t think modernising the bankruptcy laws is a good idea just now.

“Yesterday, the troika voiced concerns about the banks’ loan books. They fear that more mortgage holders and small businesses than originally anticipated may not be able to repay the debts. All of this is complicated by the impact of modernising bankruptcy laws….. this is the worst possible time to change regime …….. No matter how warranted it may be to put in place a fairer system, doing so now risks a damburst of personal insolvencies.”

http://www.irishtimes.com/newspaper/opinion/2012/0427/1224315234800.html

I guess if we just hold on for a while then Dan those bankrupts will just go away.

Actually, they probably will. They will follow all the multimillionaires who have stuck everything in trusts or relatives’ names and gone off to the UK over the past couple of years to file for bankruptcy. Assuming they can afford the ticket that is.

But we all know this legislation is going to be delayed and a veto is going to be handed to the banks which will make it next to useless anyway. I’ve seen the below the radar PR and lobbying briefs. I chose not to get involved (“sorry old chap, wrapped up 110% of my time in other projects just now”).

But…. back on thread….. people like those who work for the Troika are next to impossible to persuade to stand up in front of a press conference – they drive me nuts trying to get them to go out and explain things – because their view is that they are not politicians accountable to the public and they are not directors of a plc accountable to shareholders (who therefore should be expected to go out and make public statements and be questioned). They are just doing their job and that doesn’t include standing up in front of the wolf pack to be savaged (or what any normal person would describe as being made to feel uncomfortable) so would you please send out a press release instead, preferably by email.

I suppose you could argue that they think they aren’t accountable to anyone.

The bit that really interests me though is the statement: “They fear that more mortgage holders and small businesses than originally anticipated may not be able to repay the debts.”

How many more? More than what? I think we should be told.

@ Ceterisparibus

Herewith the link to the RTE interview with the Paris correspondent of the IT. It tells one more than the swathes of inept print media coverage available this morning.

The interview starts 12 minutes in.

http://www.rte.ie/radio/radioplayer/rteradiowebpage.html#type=radio&rii=9%3A3269140%3A83%3A27%2D04%2D2012%3A

Debating the Irish idiosyncracies that have given rise to an untimely referendum would be a mammoth task in itself. My own view is somewhat ambivalent. The one postive is that a ‘commentariat’ incapable of setting issues in anything other than a domestic context is having its bluff called.

Hollande is not going to start drafting his letter to the other government leaders on the morning after his election. It is clearly already largely drafted and the subject of intense advance manouevres if not actual negotiation.

@ PR Guy

‘But… people like those who work for the Troika are next to impossible to persuade to stand up in front of a press conference – they drive me nuts trying to get them to go out and explain things – because their view is that they are not politicians accountable to the public and they are not directors of a plc accountable to shareholders (who therefore should be expected to go out and make public statements and be questioned). They are just doing their job and that doesn’t include standing up in front of the wolf pack to be savaged (or what any normal person would describe as being made to feel uncomfortable) so would you please send out a press release instead, preferably by email. I suppose you could argue that they think they aren’t accountable to anyone’

If they are doing a job, they are accountable to their employer, which in this case is the management of a temporary interagency project. The ‘Troika’ did not require them to give a conference, or it would have been done. Given the deterioration in Spain, the Irish situation may be perceived as less ‘sexy’, with a consequent decline in status for the bureaucrats involved. Willingness to put up with slings and arrows may be less.

Dan O’Brien comments:
‘A final observation: over the past 10 days the troika people did not meet Opposition parties and interest groups, and yesterday they were thinner on the ground than usual having decided to abandon their customary end-of-visit press briefing (a very grumpy Vincent Browne showed up at the last one three months ago and seems to have frightened the technocrats so much that they did not want to subject themselves to the broadcaster’s ire again).

While it cannot be a particularly pleasurable experience for bureaucrat-types to be berated by all and sundry, it’s surely better for a scene to be had and the air cleared than to skulk away and leave ill feeling bottled up’

Bailout 2 is certainly going to be conducted in a far tougher atmosphere, both in terms of diminished trust between Irish and international institutions, and declining public trust in the Irish government itself.

@Paul Quigley

People who hold senior roles in the IMF tend to be more autonomous than you might think (the fragrant Christine certainly doesn’t sign off too many press releases – unless they are directly quoting her. Some might say that’s because she doesn’t actually understand half of what the IMF actually do and it’s all a bit too ‘technical’).

I can’t speak for senior employees of the ECB/EU but the IMF guys on the ground here would certainly be ’empowered’ to decide whether they wanted to hold a press conference or not after a review and if they didn’t but (say) the ECB guy did, they would tell them where to go and no press conference would take place.

Though the greater likelihood is that our government will have asked them to hold a press conference to try and make a good news event out of it and they (the Troika guys) would have all said, “We aren’t falling for that one again. We’ve got nothing to gain. Get lost Noonan. Just be grateful you got the bailout and get your house in order because there’s no more money once Spain goes belly up.”

The ECB moved outside their remit and into the fiscal policy arena and started to spend taxpayer money. But they do not want to be accountable to those taxpayers. As a result their response to being faced with direct questioning on this issue (e.g. from Mr. Browne) is simply to cancel any press conference at which such questions are likely to be raised.

So the executive decision-makers, or their representatives, cannot be questioned – instead that is the job of the local operational decision-implementors i.e. Irish politicians. That’s democracy EU-style – a subversion of the real thing.

Grief – While looking for the Banco Popular results (profits down 46%) I’ve just seen the Spanish unemployment figures. From the Guardian:

“The Spanish unemployment numbers are really shocking. There are now 5.6 million people out of work, with 1.5 million of those jobless for more than two years.
The National Statistics Institute says 365,900 more people lost their jobs in the first three months of the year and that the number of households with every member unemployed rose by 153,400 to 1.7 million. Spain’s unemployment rate is the highest in the 17-nation eurozone.”

25% and climbing. This cannot possibly continue. I’m due to speak to some old friends in Oviedo at the weekend. I wonder what it’s actually like on the ground over there?

Spanish retail sales followed suit. Down 3.7%

@PR Guy

“..The bit that really interests me though is the statement: “They fear that more mortgage holders and small businesses than originally anticipated may not be able to repay the debts.”

How many more? More than what? I think we should be told…”

Sadly nobody knows the answer, that’s why the CBI is conducting its on the ground survey as discussed in a previous thread. I’d wager following the results of the survey the CBI statement will go something along the following

” Despite a comprehensive review of the banks lending and domestic mortgage books by external consulatants in q1 2011, based on data to the end of 2010, it now seems that their has been a marked deterioration since. The latest survey suggests that the banks are in fact really fubard. Thankfully no CBI staff member was injured in the preparation of the latest survey and we thank those citizens who participated and gave us (well not actually us but our appointed 3rd party externals) a more meaningful insight to the term ‘saddled by debt’ we’ll bear it in mind when we request an additional €20bn of capital from the citizens to plug the hole.”

Can’t wait.

@PR Guy

“..25% and climbing. This cannot possibly continue. I’m due to speak to some old friends in Oviedo at the weekend. I wonder what it’s actually like on the ground over there?

Spanish retail sales followed suit. Down 3.7%..”

At times like this in Spain Herb Stein’s prophetic words come to mind

‘If something can’t go on forever,it won’t’

The situation in Spain is going to pop. The first helmet to have to the ready is a Swiss deposit account flush with CHFs.

@Eureka

I thought they made a decision the other day not to create a NAMA?

I only skimmed through the S&P release but pretty sure I read somewhere in there: “If you don’t stick to your austerity targets, we will downgrade you again.”

Wonder why they downgraded on a Thursday night? Maybe they caught wind one of the other agencies had a release planned to go out this evening and didn’t want to seen to be a ‘follower’.

@Yields or Bust

“The latest survey suggests that the banks are in fact really fubard. Thankfully no CBI staff member was injured in the preparation of the latest survey…”

I often wish I could write press releases in that style! Unfortunately, I have a family to feed.

WRT to the Swiss bank account. I wish I had a wedge of money because that’s exactly where I would put it. They won’t hold that 1.20 forever.
Nothing lasts forever, not even pain.

@ PR Guy

they made a decision to create something which they denied was like NAMA, but in effect pretty much was…

@DOCM
Thanks.
See all bets are off today…
From the Guardian…
“”The fiscal pact has been negotiated, it has been signed by 25 government leaders and has already been ratified by Portugal and Greece,” she told the WAZ media group in an interview.

“Parliaments all over Europe are about to adopt it. Ireland has a referendum on it at the end of May. It cannot be negotiated anew.”

Hollande responded swiftly to the remarks, telling French TV: “It’s not Germany that decides for the whole of Europe.”

He said he had also received “signals” from other governments in Europe that they felt similarly, “even the conservative ones”.”

She seems to be using our referendum as a reason for not renegotiating.

@Ceterisparibus

“It cannot be negotiated anew”

I do wish journalists at press conferences had the gumption to ask more incisive questions. “Why not?” would be a simple but good start. “Surely anything can be changed if the political will is there to do it?” might be another.

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