Greek Euro Exit and Contagion

Part 2 of the FT series is here.

87 replies on “Greek Euro Exit and Contagion”

This type of article from the FT needs to carry a health warning. DO NOT TAKE AT FACE VALUE.

Anyone laying odds on a coup?

I loved those pictures of the president and the donut of generals during the second bailout talks. “Who are the Finns?”

The WSJ op ed page had a great description of the policy of the Greek left – no reform, tax somebody else and blackmail the Germans. The Greeks have no allies at all unless the Russians answer the call.
How many more will leave the euro either voluntarily or involuntarily.

@ Tull

It’s geopolitics now. The Iranians could step in. Greece would be a great Nato ally against Israel’s plans.



What sort of discount would it manage to clear at in the market?
If Greece leaves it will be a vicious blow to neoliberal trust-us-we-know-what-we-are-doing-thinking.

Don’t take it personally.

DOCM has a point , England has skin in this game of separation now .

But as always the UK is fighting a great match with limited resourses and the City of London stuck withen its bowels.

Its a strange symbiotic relationship now ,what after 400 years or so.

JP Morgan wouldn’t release details of the trading strategy that lost it $2bn as many positions are still open and it didn’t want its competitors to target it. If Greece left the EZ would JPM be left with an increased risk of being caught with the tide out ?

If I have the lurgy and a 110 degree fever and I sneeze and you catch the lurgy and you too get a 110 degree fever, that’s “contagion”

If we have a debt of €30bn which is breaking our backs as a nation and that €30bn is shared out amongst creditors who are beneficiaries in the sense they have already been repaid €34bn from insolvent institutions, then that is not “contagion” – the €30bn debt doesn’t get duplicated.

We should perhaps be a bit more understanding when we use words like “contagion”

I doubt even the Greeks are that stupid. It is one thing to be thrown out of the EU but attacked by Israel.

from the symptoms to the Primary Source ….

… some Dutch/Deutsche Realism

Banks could sink the euro
14 May 2012 NRC Handelsblad Rotterdam

Forget the debate about austerity versus growth, the future of the single currency is being played out in the banking sector. As a result of the crisis, governments and financial institutions have become so interdependent that they have weakened each other. Excerpts.

Caroline de Gruyter
It is not possible to create growth by magic, like a rabbit out of a hat, and certainly not without having money available for investment. This is why Daniel Gros is amazed by how European politicians, with the new French president François Hollande at the forefront, keep repeating one word: growth.

For the German economist, who is part of the Brussels think-tank the Centre for European Policy Studies (CEPS), to discuss “austerity versus growth” is a “false debate” that does not take forward the search for a solution to the euro crisis by a single step.

The real debate, he says, should be about banks, particularly those of southern Europe, which are in a much worse condition than was previously thought.

“The Greek and Spanish banks are sitting on a growing mountain of debt,” says Gros. “Only Europe can save them. Greek and Spanish governments are too weak. This is a major European problem.”

Der Spiegel International – A Comprehensive on Greek Exit

Time to Admit Defeat
Greece Can No Longer Delay Euro Zone Exit

After Greek voters rejected austerity in last week’s election, plunging the country into a political crisis, Europe has been searching for a Plan B for Greece. It’s time to admit that the EU/IMF rescue plan has failed. Greece’s best hopes now lie in a return to the drachma. By SPIEGEL Staff

The Berlin Press on Dr Merkel’s hammeringn and a massive NO vote in North Rhine Westphalia …

Chancellor Angela Merkel has been weakened by the humiliating election defeat of her conservatives in the large state of North Rhine-Westphalia on Sunday. German media commentators say she will face a harder time securing backing for her austerity policy at home, at a time when resistance to it is building across Europe.

Not to worry Angela – The Irish still love your austerity and are delighted to keep paying the bills of all your bank bondholders for a generation or so …

The ‘Grexit’ described by FT will not happen. Greece will leave the euro but it will to be a relatively smooth, negotiated exit with lots of financial support from the EU/IMF for years to come.

There is no way Europe can allow a potential ‘failed’ state, with rising extremism and a significant military, on it’s doorstep.

If Greece exits the Euro, the real danger for the Euro is not if Greece fails post exit, but if it succeeds. Because many other countries will then follow its steps.

And I give Greece a 80% chance of succeding on exit, contrary to common opinion.

My chronological list for Euro exit after Greece: Spain, Portugal, Italy, Slovenia, Cyprus, Ireland, Slovakia, Austria, France, Belgium, Estonia.

Tullmcadoo Says:
May 14th, 2012 at 9:40 pm

That’s your problem – grow a set.

Batten down the hatches guys, Moody’s tonight downgrade 26 Italian banks….
As I said before…watch milan.

“The British Government is largely watching the euro turmoil from the sidelines and has not seen the details of contingency planning in Germany. Ministers are relatively confident that British banks would not be hit too hard directly by a Greek meltdown, but the indirect impact of how this would spread through the global financial system are far less certain.
The Foreign Office also has plans to evacuate British citizens from Greece if it becomes dangerous. A government source said: “The situation is now political rather than economic so is out of our hands. We are well prepared to help protect British citizens from the storm.” from the telegraph.

It’s getting serious……

I was showing my daughter a picture of a swan last night.

She said: “Do you get black swans Daddy?”

Out of the mouths of babes……

Should be an interesting day/week. Makes plenty of work that’s for sure.

This disaster movie is apparently very exciting for some. What could happen next and so on?

Maybe the wisdom of crowds or maybe not?

There was a wonderful metaphor for globalisation last Sunday where until the final minutes of the Manchester City-QPR game (I wasn’t actually rooting for the KL-based owner of Air Asia and QPR, as I believe that these rich people should put funding of local sports first, not their egos) with adult Man City fans crying in desperation, in respect of a club owned by billionaire Arabs, managed by an Italian and almost all the players from beyond England.

As Paul Hunt pointed out elsewhere, the Greek disaster movie could never match the appeal of festering domestic issues where we could do something to change.

A few of us here, likely a minority — would share Prof Irvin’s view.

George Irvin in The Guardian:

Europe’s return to stagnation, recession and mass unemployment cannot be reversed by adding a growth clause to the austerity treaty or issuing a few project bonds. It is possible that an explosion will be triggered later this year in the contagion that may follow if Greece is forced out of the euro. It is possible that the firepower of the ECB and the ESM can be harnessed to prevent contagion. But as most Europeans now recognise, Merkel and Hollande are this week yet again kicking the can down the road, and we’ll soon be at the road’s end.

Band-aid solutions yes but — also from Merkel’s critics.

@ All

they’re gonna repay the 430mn foreign law bond today apparently, just announced on Reuters…

Now that time is running out here’s what was written 2 years ago when the Greek 10 year was yielding a mere 6%

Münchau on why Europe needs a crisis endgame

Martin Wolf on EZ structural imbalances

Greece will not be fixed by populist measures

Martin Wolf had a very interesting observation a while back

“Ever since the federal republic was founded, Germany has had two over-riding strategic objectives: sound money and European integration. These were the twin imperatives learned from the calamities of the early 20th century. The euro embodies these aims. Now they conflict with each other.”

In many ways the euro has already broken up, large and small investment institutions and businesses have already established separate credit lines and alternative investment strategies taking their money out of banks in the peripheral countries especially Greece.

Re “Bankers say as much as been done as possible to plan for financial sector disruption. Many banks have cut their direct exposures to Greece and other peripheral countries. Contingency regimes are in place to cope within 24 hours with the phase-in of a new drachma.

We are entering the final phase of the euro mess. Interconnectedness of the global financial system in this scenario instead of proving to be a benefit, is a major hindrance in unwinding Greece.

The worst excesses that lie at the heart of the global economic system rooted in loose regulation with financial instruments built on confidence without substance can be usefully addressed in the breakup.

Countries relying on a more independent and tightly regulated system of banking and financial services may finally enable democratic governance to bring the scales back in favour of people represented in the other 99%, not the 1%.

@Michael Hennigan

“It is possible that an explosion will be triggered later this year in the contagion that may follow if Greece is forced out of the euro.”

Regardless of whether Grrece exits or not (and I still think a lot of the talk is brinkmanship at this stage), all of the financial services companies I deal with have had contingency plans in place for some time now to manage a Euro breakdown (I’m not saying they would survive it but at least they have set up the right emergency committees!).

I also heard the same as @Eoin Bond about repaying the 430mn foreign law bond today – I don’t know how they ‘account’ for these things at a governmental level but short of digging down the back of the sofa, where did Greece just find 430mn from? Surely they haven’t raided money earmarked for paying salaries, pensions, etc. later this month? I guess it was decided that repaying bondholders is more important than the people. Where have I heard that before?


ta for links,

“The EU needs to send out an urgent signal that it is willing to devise a robust anti-crisis policy.”

Each one of those articles sing the same tune re deficits and imbalances at the heart of the eurozone. Fixing them in my view is like trying to fix a house built on sand. Best is breakup, support each country as it rebuilds its own currency. The IMF can be a huge help. Preserve the EU, encourage free trade and bilateral support. When countries like Ireland get their own house in order, euroNua may be worth a try better.

But, right now, euro project is busted 🙁

Should Europe play by the rules as well as Greece playing by the rules?

The EU has a no bail-out clause so don’t bail them out. If you are not going to bail them out, let them go bust properly. A major default was allowed but it clearly was not sufficient. A proper default should be have been allowed. The EU has failed to implement a proper orderly default.

The Eurocrats and EU politicians want to blame the Greek people. However, by agreeing an insufficient default which did not offer hope to the Greek people, the Eurocrats ignored the Greek people as the biggest stakeholders it the negotiations. Those repsonsible for keeping Europe together should not be allowed to deny their responsibility and put it on the greek people. The reason we have an EU is precisely to avoid should schisms between national populations.

Beyond that, Greece needs two things – reform and political stability.

The EU should support these reforms as best they can. This could involve setting up good banks after a Greek default and supplying a limited amount of funding to keep the Greek public services on life support.

Ultimately, wealth needs to be redistributed to the ordinary worker to resolve a crisis.

Until the vested interests lose what they have they will not partake in reform.

However, the EU needs to take a long view on what constitute good reforms. Ultimately, the never ending race for competitiveness is a race to the bottom. Beggar thy neighbour on a global scale is not a sustainable solution.

We do not need all the people of the world to work to create maximum material wealth for the global population. Employment is becoming as much a method of distributing wealth as it is a means of creating wealth.

There is nothing wrong with short working weeks and early retirement in principle. There is certainly nothing wrong with them in countries with 30%+ youth unemployment.

Accordingly, whatever reforms the EU demands and supports in Greece should admit these facts and should hold out the promise of a better future for all ordinary workers.

One last point, the type of tax evasion which has gone on in Greece in the past will eventually be oversome as long as Greece remains a democracy. This is becasue technology allows tax authorities to implement laws which were nearly impossible to properly monitor and enforce only 20 years ago. However, if Greece goes down the tubes and democracy is prejudiced this problem will not be resolved any time soon.


they are blaming the Greek people but they had the opportunity in Q1 2010 to carry out a debt restructure which they ended up doing anyway later. Instead they dithered and exposed their lack of competence and now the house is falling in.

Holland proposals on FTT

The proposals re FTT aided by renewed pressure from the opposition in Germany may mean this becoming the bulwark of Hollande’s efforts to stimulate growth. These proposals may explain the race to pass the FC in Ireland before renewed pressure comes from Hollande vis a vis additional amendments to the FC with growth protocols, one of which is likely to be a proposal for FTT. Ireland may seek to torpedo FTT however contradictory this may appear to be !

Anyways, here’s a list of links re new FTT worldwide. Its now for some becoming a human rights issue. Hungary have excluded interbank lending from its version of FTT opening the possibility of different flavours.

Hungary to exempt interbank transactions

Global Human rights issue


“If you are not going to bail them out, let them go bust properly.”

But you just know they won’t don’t you? They will come up with some monster, over-engineered hybrid of e.g. parallel currencies in Greece, keeping Euros to pay back creditors but having Drachmas to buy locally, doing some even fancier restructuring of the debt or some such half-arsed nightmares so that the problem is firmly left in the laps of the Greeks who caused none of the problems.

I agree with you – the Greek people have not been afforded the respect of actually being stakeholders in all of this.

In fact, all of your post is the most sense I’ve read in a while… and democracy is already prejudiced in Greece and probably will be even more so in the next few days.

If Greece does exit the Euro it will have an opportunity to implement a sustainable monetary system.

If Greece returned the Drachma and allowed its financial institutions to create the digital portion of it through loans nothing will change in principal. Every Drachma will have its corresponding debt.

Greece could start afresh and allow its Central Bank to create some, if not all, of its digital Drachmas. Its banks could also be stopped from deleting the money supply through loan repayments and the so the economy could remain stable with a continuous growth in its money supply.


They failed the Greek people by letting them into the Euro when they were not ready.

They failed the Greek people by extending them credit to buy military equipment from Germany.

They failed the Greek people by not punishing Goldman Sachs for facilitating the misrepresentation of the Greek accounts.

They failed the Greek people by not reaching enabling a debt restructuring in a manner that offers hope to the Greek people.

A major attraction of joining the EU is that it offers technical assistance, a framework for development and political support. The EU appears to be failing to be providing these core benefits pf membership at the moment.

More like the Scottish FA fining Rangers (Greece) while they are in administration for the misdeeds of past adminstrators while the Celtic Fans (German public) cheer them on.

“Today many peoples, starting with those in Europe, are awaiting and watching us. To overcome the crisis hitting it, Europe needs projects, it needs solidarity, it needs growth.
To our partners I will propose a new pact that will combine the necessary reduction of public debt with indispensible stimulation of the economy.” …President Hollande

Enda….we’re voting on the “old pact”

Hollande is either retarded or corrupt – you don’t pay off public debt ( subtract the money supply) and expect growth in this envoirment.
You can kill interest payments alright by issuing almost pure fiat as the UK & US have done , this has the effect of transferring demand more evenly withen the system.
But he wants even more bank credit / debt growth !!! investments / projects where there is no money demand for even the present infrastructure projects.

Unbelievable… well not quite – the socialists were always the bankers best friends.

That honeymoon did not last long. M. Hollande is going to borrow to stimulate and deleverage at the same time.

The man is a genius.

@ zhou_enlai

They failed the…

In your world, does an individual country retain any responsibility?

In Ireland, FF and its rat bag of dependents were elected 3 times from 1997.

Like the people a generation before who were à la shocked that Haughey had been on the make, some in Ireland would like to shift responsibility for the Irish bust to nefarious foreigners.

Acknowledging that there is a seldom a simple explanation for the direction of economic trends, the consequence of not accepting any responsibility is that change only comes when there is no other choice.


If he created money out of nothing a la the LTRO and used it to set up a bank that actually invested in projects in the real economy would that grab you ?

So… new elections in Greece after talks failed today.

Anyone running a book on party results?

@PR Guy
You can buy 10yr Greek bonds today for less than 15. Yield now 29.7%
How’s that for a punt?

@ Michael Hennigan

What marks out of 10 would you give for the Troika’s performance concerning Greece over the last 2 years ?

It’s a straightforward play. PASOK/ND will campaign on a platform of this now being a vote on exit from the Euro – and probably pick up some money on the QT from various interested parties in Europe to help fully fund the PR campaign (don’t tell me it’s illegal and therefore doesn’t happen per-lease). They will be fully backed up by a number of elected and non-elected European politicians making lots of public noise for the Greek newspapers that if they don’t vote the right way this time they will be leaving the Euro and facing total ruin and disaster and all their children will die within six weeks and there will be a great pestilence on the land, etc. The Greek electorate will be bombarded with this PR in the period leading up to the next round of voting and they don’t stand a chance. Not a hope. There will probably also be some dirty tricks on the main threats to the desired outcome too. Maybe a couple of harmless bombs will also go off that will be somehow linked back to anti-bailout parties and lots of noise about them causing violence and civil war if they win.

It’s all so pathetically predictable.

PASOK/ND will pick up just enough votes to form a majority of a small handful and it’s back to business as usual. Boom, boom (or should that be bust, bust?).

Don’tcha just love democracy? It’s so easily subverted.

@Michael Hennigan

Well, we’re part of the EU and we’re part ofthe Eurozone so I think it is fair to say that our politicians and officials failed the Greek public too.

I think if everybody accepts their own responsibilities and faults it will lead to humility and hopefully unity.

Obviously there a number of people who were right and lived up to their responsibilities (e.g. Morgan Kelly).

There are others again who were all seeing and understanding but were never entrusted with any responsibility by anybody; who never sought the burden or reponsibility for others and who did not borrow or make an income from those who were engaged unsustainable economic activity and who pointed out the errors of the international financial system and of our own economic policies.

They are blemish free and can rail against whomever they want calling them “rat bags” and the like and apportioning blame as they see fit. I am not sure how you made your money or if you pointed out all the errors being made in global economic and in domestic economic policy so I don’t know if you fit into this category. Is that “your world”?

“Just wondering what Roubini knows about Greek politics.”
He knows that the minority rich won’t pay and that the majority poor can’t pay.
I still don’t know what the legal basis for ‘expelling’ Greece from the Euro is, not that legalities ever bothered the major powers.
Maybe Ireland should have expelled Anglo and INBS from the euro.


Yes…I think the ECB will have to do full blown QE but only after Greece gets thrown out of the EU as suggested by that nice Austrian woman.

@Joseph Ryan: “I still don’t know what the legal basis for ‘expelling’ Greece from the Euro is, not that legalities ever bothered the major powers.”

IANAL, but I gather the ECB is within its rights to refuse to act as LOLR to the Greek banks. If it does so then it’s hard to see how Greece can function without reintroducing Drachmas, thereby quitting the Eurozone.

However there’s surely a distinct possibility that the ECB won’t take such a drastic step. Better to kick the can down the road once more, even after a default. That’s the EU way.

@Zhou and Michael H,

There’s little point fighting battles about who said or didn’t say what during the bubble era in Ireland. The people passed judgement on the politcial decision-makers on 25 Feb last year – and apparently, by default, have elected an equally sanctimonious, complacent and arrogant bunch of clowns. Politicians everywhere will never willingly admit to making a mistake – until they run out of road and have to make a u-turn. Then what was previously impossible and unthinkable becomes vitally necessary.

EU politicians and policy-makers at the time should never have allowed Greece to join the Euro – but their predecessors will never admit this. Nor will they admit in an unvarnished manner the design faults in the Euro. Completely unanticipated ‘circumstances’ and ‘events’ will be highlighted as the reasons for any u-turns they are compelled to perform.

Being willing to change tack and introduce reforms in response to the reasoned presentation of facts, evidence and analysis is seen as a sign of weakness – and to avoid being seen as being weak they will charge ahead until events overtake them or their voters get fed up and chuck them out.

In the Irish context, apart from the replacement of a few head choristers, the Greek chorus that cheered on the previous shower and the economy towards their respective nemeses remains intact. No mistakes will ever be admitted. Reforms will be forced under pressure of events or external pressure.

That’s why we are where we are. It’s just a bit galling and frustrating that we’ll probably have to wait until late 2015/early 2016 until the people pass jusgement again. In the meantime these clowns and their Greek Chorus will drive the economy in to the ground. Our only hope is for events that will overtake them.

Greek crisis
The euro exit is a bluff
15 May 2012 La Stampa Turin

The voters’ verdict is already in across several countries and regions: the cure based strictly on austerity within the eurozone has failed. What needs to be done now is to take that reality on board and to start negotiations that promise to be trying and that may lead to awkward compromises.

Greece, though, must be ready for anything. And it must distinguish between the reality and the threats and blackmail that are flying about at the moment.

…. and we know a good bit obout bluffing around here on the Fiscal Corset … plague of locusts spotted over Castlebar …. Government orders one million shovels!

Christy Moore sues the Government for breach of copyright

Dont’ forget your shovel if you want to go to work ….. etc

Looks like the Referendum Commission has banjaxed any postponement of the Austerity Treaty Referendum…
From IT…
“Once a Bill containing a proposal for the amendment of the Constitution had been passed by the Oireachtas, the legislation provides that the Minister for the Environment shall make an order setting the date on which the referendum is to take place.

Once that order is made, the only circumstance in which it may be changed is if a general election is called, the commission said.

“If a general election is called, the minister may change the referendum date to the date of the proposed general election.”

“There are no other circumstances under the Referendum Act 1994 in which the minister has the power to postpone a referendum nor has the minister the power to simply rescind the order to hold a referendum,” the commission added.

“In the interests of ensuring public certainty about the date of the poll and in the interests of ensuring a robust public debate on the issues the commission wishes to clarify this point.”

I wonder why the Minister for Justice didn’t know this? The best he could come up with is “ambivalence”

@ seafóid

I wasn’t suggesting that everything is perfect or was done without error.

It was a reaction to the common passing of the buck or search for scapegoats, as if countries like Ireland or Greece had no responsibility at all for their busts.

@ zhou_enlai

As you in effect asked, the answer is that I wasn’t for sale.

The following are extracts from 3 of over 24,000 articles:


In a cabinet of mediocrities, there is no shortage of candidates for the booby prize. Mary Harney has been singled out because of the wide chasm between the rhetoric and reality. Instead of radical reform, what has been offered are headlines with a reliance on consultants and advisory groups to fill in the blanks. A onetime courageous politician has been a cheerleader for tax cuts in office during a time of plenty while her approach to the party’s much touted ‘deregulation and competition’ has been characterised by timidity and inertia.

Mary Harney is the head of a party which has sought to present itself as a champion of radical reform but real progress has been glacial. She has been a strong supporter of the shambolic decentralisation programme and the rollback of the baby steps which had been taken in the 1990’s in providing greater transparency for public decision making. Welcoming new American companies to Ireland has been the very public part of her job but so much has been neglected. As the head of her party, Bertie Ahern does not have a realistic choice but to give Ms. Harney another position in Government. She does not deserve it.


Instead of putting party flunkeys on the public payroll, has there been anyone in Government with the savvy to propose a CIO – Chief Information Officer – with key experience in world class IT organisations and successful project implementation experience? A similar function with responsibility for major infrastructure projects would surely have also been merited.

It says a lot about Irish public governance, the competence of individual ministers and the senior bureaucrats, that everyone in a position to make what would have been commonsense and basic business decisions, did not do so until several hundred millions of euros disappeared down an Information Technology sink-hole and billions were underestimated on roadbuilding projects.


A large number of construction workers are computer illiterate and will need re-training when the boom will wind down. They will also have to adjust to work without a large amount of overtime and allowances.

The majority of the Irish Cabinet have limited or no management skills and it is very evident. Believing that they have been instrumental in the creation of the Celtic Tiger, they have moved with the speed of a glacier in introducing long overdue change in both the policy and administrative areas.

Ministers pass the buck to public servants who are now subject to the regime called benchmarking, as referred to above, with phantom targets and so on. 

It’s a joke of course and no matter how big the blunder may be, nobody is accountable. This is one benefit of decision by committee.

So as the sands of globalisation move under our feet, there is staggering incompetence at the heart of government and certainly no interest in contemplating how long will the good times last?


Er, I don’t think this is a joke.

Every single one of your posts reads like a sermon from a 1950s missionary obsessed with the demon drink and occasions of sin.
Reminds me a bit of the scene from Life of Brien where all the mad prophets are declaiming doom and gloom outside the temple.

• Aditya Chakrabortty is correct – university economics departments are largely a closed shop, having uncritically bought into neoliberal ideology en masse, alongside its methodologies, such as quantitative analysis, game theory, rational choice, econometrics. These are pursued at the expense of studying economic history and/or economic theory – breezily dismissed as “irrelevant” or “irrational”. He is also right to point to the work of Hugh Willmott and colleagues at Cardiff Business School as countering this orthodoxy, alongside Prem Sikka, Ha-Joon Chang and the team at Cresc. Special mention should additionally be made of Massimo De Angelis (University of East London) and Guy Standing (University of Bath), whose book The Precariat is recommended to anyone who needs to work, whether current or prospective – ie the majority of us.
Dr Andy Knott


A General Election! What a wonderful idea. Of couse it could easily be avoided if Labour joined the opposition and then Fianna Fail with the light green puce corsets could join up with the puce blue coresetted in Fine Gael. That cerise pink corset doesn’t really suit Eamonn anyway.

Aditya Chakrabortty (The academics show their anger but they can’t answer my criticism that there’s too little analysis of our current crisis, G2, 7 May) raises the question of the relationship between intellectual radicalism and historical crisis, and how perhaps this has been dulled because of the “publish or perish” conditions of modern academia.

To use an observation from one neo-Marxist not-so-radical, Jürgen Habermas, the original purpose of social science was to offer critiques of social and economic crises, having developed from the terrible conditions of 19th-century capitalism. With now the longest recession since 1870 resulting from a sovereign debt crisis caused by the conspicuous consumption of debt generated by an unfettered global finance, you’d think the conditions would be prime for a shift in the zeitgeist, with old thoughts and models swept away.

Good piece in the Guardian.

@”Q” & Disciples of Mairt_een Feld_steen


2.12pm: Pasok leader Evangelos Venizelos spoke to the press after the talks over the formation of a unity government broke up in the past few minutes.
Venizelos, the former finance minister, said he would fight for Greece to find its way forward.


You hit on three of my own hobby horses there: Harney, Information Technology and Decentralisation. All good, but I don’t think it equates with seeing the structural flaws in the global economic system and in the national economy.

Also, you say you weren’t “bought”. The question is whether you made money from the inflated domestic economy. I wasn’t bought either but I don’t deny that I made money in the domestic economy.


A portent!

By now, all the American conspiracy websites will be speculating… it’s a secret American weapon…. aliens did it…. TPTB tried to stop him reaching Merkel to make her change course… it is written in quatrain 666 of Nostradamus that when the black prince sits on Amerika’s throne and fire strikes the French king in the sky all bleedin’ hell will be let loose on the markets…. etc.

But what a whimp. Turning round and heading home.

I was flying back from the USA one night and I started wondering what would happen if a small meteorite on it’s normal course earthbound giving us those lovely shooting stars across the sky…. were to blast through the fuselage of a plane. That was a terribly uncomfortable flight home. Don’t know what made me think of it.

The Original

Angry academics can’t answer my criticism that there’s too little analysis of our current crisisDiscussion of the economic crisis must be made democratic – and economists have a role to play in that

Worth noting that while a couple have acknowledged my challenge on the social scientific validity of the constraints within the Fiscal Corset, none have actually taken it on – because they know that it is IN_Valid.

Demonic intervention ?

By the way I think Hollande has a Better taste in eh…….. eh ……must shut up now.

Rumour in the Market that Francois is planning to telll Miss the dog ate his ratification.

@ Michael Hennigan – Finfacts Says:
May 15th, 2012 at 4:00 pm


In a cabinet of mediocrities,………………………..’

If you could put that to music, a tragic opera to match Carmen (OTT I know but….).



Saw the refcom statement earlier: . Its answer is not as comprehensive as I would like though. All it really says is that the minister cannot postpone the referendum under the terms of the 1994 Referendum Act (except for the case of a GE). I’ve no doubt the refcom’s statement is completely accurate in what it says and as far as it goes. But I’d wonder if the Oireachtas could still simply either amend the Referendum Act itself or vote to strike out the Amendment Bill.

Two possible reasons come to mind as to why the Oireachtas might not be able to do this. Maybe such a move would be considered retrospective and the constitution doesn’t allow retrospective legislation. But then again the referendum is a future event.

And in many circumstances delaying a vote would simply be undemocratic, e.g. imagine a government tries to cancel a GE just a week before the vote because of an unexpected bad opinion poll result. I’m sure any court would strike down such an attempt in short order. But what if there were good and valid reasons to cancel or delay a vote? Just hypothetically, suppose next week most other EU countries decide en mass that they are not going to ratify this treaty. Would our courts really still insist the referendum vote would have to be held regardless?

I’m not a lawyer and some legal eagle may well be able to give me basic reasons (from constitutional law 101) on retrospectivity or whatever on why guillotining through a simple amendment to the Referendum Act wouldn’t be possible (and the government is well capable to guillotining through legislation!). But perhaps this isn’t legally clear-cut? If so, the refcom statement, while no doubt accurate in its own terms, might be used to give a mistaken impression of the situation.

@Finbar L

“Two possible reasons come to mind as to why the Oireachtas might not be able to do this. Maybe such a move would be considered retrospective and the constitution doesn’t allow retrospective legislation. But then again the referendum is a future event.”

The constitution does not prohibit retrospective legislation as such:

15.5 … “The Oireachtas shall not declare acts to be infringements of the law which are not so at the date of their commission”.

This has always been interpreted as relevant to retrospectively turning an innocent act into an infringement of the law – and that’s about all.

40.3.2 and 43 deal with the constitutional prohibition on ‘unjust attack’ on property rights. This has been relevant in preventing restrospective legislation occasionally.

Ironically, after the referendum is passed, those constitutional protections go out of the window – depending on what the government can claim is “necessitated” by “obligations” to its EU ‘partners’ because of this part of the constitutional amendment:

“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty”

Note to Paul Hunt: that constitutional protection is also relevant to the constitutionality of things like tax law effectively enacted by press release as opposed to ‘being held to account’ or ‘subject to scrutiny’.

But who cares, there’s a guaranteed credit line available.

Hang on whats that? Oh yes, incomming sarcasm…


“Every single one of your posts reads like a sermon from a 1950s missionary obsessed with the demon drink and occasions of sin.”

I wonder are the Redemptorists, breathing fire and brimstone, still doing their missions. Though I doubt they’d have me. I’ll have to let the beard grow long and don the sack-cloth and ashes, like an Old Testament prophet. Your observation is spot on. I might get a gig as an extra if there ever were a re-make of, or sequel to, ‘The Life of Brian’.

And you’re right about the sermons. Totally futile. If the Government and Official Ireland think they’re being ever so clever with the programme of structural reform they’re implementing – or the programme of ‘political reform’ – they’re going to be in for a few surprises. But there are none so blind as those who refuse to see.

And as for our economsts who pronounce on public policy, if they can’t see the deficiencies in the current programmes then there’s little can be done. But if they can see them and fail to speak out because they don’t know what to say, don’t have the resources to tackle the issue – or the specialist knowledge, then one has to ask: what are they for?

To paraphrase our most illustrious ‘somdomite’: to behave like a eunuch in a harem while the build-up to this blow-out was progressing to its inevitable climax was unfortunate; to behave like that again when it is patently clear that government policies are totally deficient to remedy the problems would be downright careless.

But what do I know? I’ll have to retire to the wilderness until the inevitable ‘events’ unfold.

Thanks for explanation. Yes, looking at them the wordings now on non-retrospectivity in the constitution, they don’t really seem particularly set in stone. Making something criminal retrospectively certainly seems out, not so sure about civil stuff. However, someone on another website mentioned article 46.2:

“Every proposal for an amendment of this Constitution shall be initiated in Dáil Éireann as a Bill, and shall upon having been passed or deemed to have been passed by both Houses of the Oireachtas, be submitted by Referendum to the decision of the people in accordance with the law for the time being in force relating to the Referendum.”

The part on “in accordance with the law for the time being in force relating to the Referendum” does sound like it leaves very little room for the government to back out of a referendum. That is unless there’s some provision or wiggle room in the law on referendums which allows them to do this, which rather unbelievably there seemingly isn’t!

If this formed part the rationale of the refcom statement it should have just briefly pointed to that. Experts often disagree on such issues, e.g. Gavin Barrett argued that the fiscal compact probably didn’t need a referendum whereas Gerry Whyte said a vote on it was probably the right move, and one had Professor David Gwynn Morgan arguing for a “harmonious interpretation” of the Oireachtas inquiries amendment whereas other experts evidently disagreed. Experts often differ, and one can usually find one to fit one’s own bias! 🙂 But if there was in this case a strong clear rationale behind a refcom statement (maybe like article 46.2), then why not just give it? Would have made their answer a lot more convincing.


Point taken, but you’re flogging a poor horse that should never have been left out of the stables. I would still contend, however, that had this fiscal compact been developed by the Commission, at the behest of the Council, with co-decision by the Parliament, under the existing treaties and for all 27 member-states, the people wouldn’t be troubled with this nonsensical referendum.

It also seems to escape people’s notice that, were this matter to be decided primarily by the Dail it, most likely, would be passed with a majority well in excess of two-thirds. Many countries amend their constitutions if the proposed amendment secures a two-thirds majority.

If ever there was definitive proof of the total ineffectiveness and irrelevance of the Dail, this is it.

And as for taxation, the EU and all other developed countries will have to re-think their approach to corporate profits tax. Taxation should be levied on things that aren’t laughably easy to manipulate.

@ceteris, Finbar L

The ‘Yes’ campaign is clearly ahead in the poles. Regardless of the political embarrassment of keeping open the possibility of holding a second referendum, if the government wanted to postpone it to wait to find out exactly what the FC would consist of in practice, or to re-word the constitutional amendment (perhaps after a bit of thought and consultation), they could announce that because of current uncertainty they recommend a ‘No’ vote with the intention of repeating it in a few months.

@Paul Hunt

Are we therefore to expect critics of the constitutional amendment to now be reported to the ISPCA. Has it come to that?


The best excuse I can think of for holding a referendum now is that, in the case of the No’s winning (OK, highly unlikely I know), they could pretend to have a legitimate excuse for holding a second vote and making everyone vote again until they ‘get it right’ (i.e. oh it’s all changed so we have to vote on what the current fiscal compact says and the other vote is null and void because that version no longer applies). If they Yes’s win first time then they will just say, we’ve already voted on it and these new bits are only tiny little changes so they don’t really matter. Heads I win, tails you lose etc.

@ PR Guy

in fairness, many of the No campaign are urging a ‘No’ on the basis that we can vote again (even if no changes). One imagines that if there is a No, and we do decide to run it again, even if there are material changes, then the No side will magically forget that they actually urged people to vote No because we can vote again.


I see I’ll have to ‘mind me metaphors’ with you around.

My first reaction when the decision to hold a referendum was announced was that Ireland had no need to hold it until next year as it was in an official support programme that effectively superceded any provisions in the fiscal compact.

Now that it’s going ahead it’s best just to get on with it. I really can’t see what you’re bothered about. It is almost certain that the next institutional and procedural steps will be enacted under the existing treaties – with this one being absorbed eventually. Simple choice: does Ireland want to be part of this process or not.

This exercise has demonstarted the previous inanity of the Supreme Court and the total ineffectiveness and irrelevance of the Dail – and has allowed the w****rs to make a great furore.

@Paul H

“I really can’t see what you’re bothered about.”

Amongst other things, it appears that the constitutional protection of property rights – where the test for “unjust attack” has been established as requiring threatened bankruptcy of the state in order for the government to get around that protection – is going to be downgraded because the new ‘test’ will presumably be that an act of appropriation of property was merely “necessary” to meet an “obligation”.

These “obligations” might be merely targets for low deficits or government debt levels. That would be quite a downgrade.

Still, this is of no consequence or interest, so there is no need to discuss any of it before voting.

There is a big, fat credit line there, and Croke Park to feed.

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