Greek Exit Part 4; FT editorial; LBS

Part 4 of the FT series is here

The FT also has an editorial here

LBS writes about contagion here

54 replies on “Greek Exit Part 4; FT editorial; LBS”

The commentary by LBS sums up the many aspects of a complex situation admirably, notably the part played by France in blocking the necessary institutional changes as the country continues to confuse “grandeur” with real economic – and resultant political – power.

However, it seems to me that the FT captures to core of the euro problem in the following.

“If the common currency disintegrates, it will be because monetary union and national responsibility for banks are an unsustainable combination. Policy makers understand this now. The rescue funds can be used for bank bailouts; and the commission has issued belated plans for pan-European bank resolution rules and deposit insurance”.

The difficulty, of course, is that recognition of this implies the sharing of risk across national boundaries, a step to which Germany, on the evidence, remains adamantly opposed.

Something has got to give!

Even the bookies can’t price the odds at this point:

http://www.telegraph.co.uk/finance/personalfinance/investing/9269973/How-would-a-euro-collapse-hit-us-in-the-pocket.html

“What are the odds on any of this happening?

Shortening by the day. Ladbrokes suspended accepting any bets last week on Greece leaving the euro. The bookies had offered 1/3 on this outcome a week ago and reported “plenty of support” at 33/1 on the euro being scrapped this year. Alex Donohue of Ladbrokes said: “We’d slashed the odds repeatedly, as punters continued to bank on a Greek exit. The book remains closed while discussions continue.”

Amazing isn’t it how what has been obvious but officially denied is now suddenly common wisdom and deemed inevitable.

Euro is just short of breaking below 1.27…..on the way down…..The consequential impacts are just beginning.

Lorenzo BS:

‘……monetary union and national responsibility for banks are an unsustainable combination’

This guy’s a genius! They should put him on the board of the ECB.

LBS, a former unelected bureaucrat in an EU institution (the very definition of a eurocrat) is arguing for more power to unelected bureaucrats in EU institutions? Big surprise!

The FT does have at least one thing correctly:”A default would not automatically push Greece out of the euro.” The question is if Greek politicians who presumably want to be able to live in Greece will make the choice of taking Greece out of the eurozone by forcibly converting depositors money into a new currency?

Was it 70% or 80% of the population who’d be unhappy if Greece leaves the euro-zone? Three quarters of police and bodyguards for politicians would suddenly be relieved of their savings and the value of their future earnings would plummet. There’s been unrest before in Greece but what would happen if the police wouldn’t be paid during unrest?

The game may already be up.
Ambrose reporting tonight…

“JP Morgan said Greek banks have already exhausted their collateral. A refusal by the ECB to ease rules would amount to expulsion, forcing Greece “to issue its own money.”
The ECB said it had stopped routine operations with certain Greek banks with depleted capital buffers, but underscored that they are still able to access the ELA scheme.”

Insolvent banks continuing to trade….law?

@ Colm McCarthy

The quotation is from the FT editorial not the article by LBS. He puts matters in the following terms.

“If the eurozone is to overcome the crisis and avoid the contagion that would arise from one of its members leaving, it has to display the same ability as the US, after Lehman’s collapse, to take rapid actions to restore confidence and stability. This requires stronger and quicker majority-based decision-making in the eurozone, on issues such as banking capitalisation and resolution regimes, the provision of financial assistance to countries in difficulties, budgetary discipline, implementation of structural reforms, and so on. If François Hollande wants a “growth compact”, he must stand ready to accept Angela Merkel’s request for greater political integration and stronger fiscal rules. That is where a common ground can be found”.

@Jesper
A default may not push them out of the euro but cutting off the money supply would, as noted by JPM above, would have the same effect.
So it seems the ECB are prepared to make good on their threats….such as those made to Ire.

@DOCM
I know his form fairly well..however, he has great sources. I’m merely trying to navigate through the mayhem.

”Insolvent banks continuing to trade….law?”

’emergency liquidity [to those banks closed out by the ECB] being provided by Greek central bank’
– a tail-end, final measure ?

@All

Kevin O’Rourke posted this link to an artcile by Charles Goodhart on another thread which can suitablly be inserted here (the thread having gone off at a bit of a tangent).

http://www.ft.com/intl/cms/s/0/2ec10b3c-9aaf-11e1-94d7-00144feabdc0.html#axzz1uXdTsPel

Notably;

“Under such a strategy, the IMF must insist on allowing the European Stability Mechanism, the crisis fund, to directly inject equity into troubled banks and provide temporary funding guarantees. EIB resources must be doubled to drive an EU-wide infrastructure investment programme and the IMF should force EU countries to co-operate on imposing stringent anti-tax avoidance/evasion measures that will deliver a much-needed boost to revenues. The IMF must also overcome French and German resistance to a deepening of the single market in services. Last but not least, the IMF should demand a clear and credible road map for reforming the functioning of the eurozone.

Given its historical mandate on exchange rates, the eurozone is the natural counterpart for the IMF, not euro-area member states. Discussion of a single seat for the eurozone on the IMF board also follows this logic.”

It says a lot about the state of the EU when a serious commentator has to suggest outside intervention to get the two major members to complete the single market, the raison d’etre of the entire undertaking.

It is to say the least disappointing that the FT would give a platform to LBS to waffle on about ‘moral hazard’ and ‘irrational’ Greek behaviour.
This from a board member of the ECB that bankrupt a country to save some European banks. Banks in countries that mattered.

He says that “European institutions have so far been reluctant to operate a ‘bazooka’ solution”.
European institutions have no ‘bazooka’. If they could use a ‘bazooka’ they would have done so long ago. The enemy is now well within the perimeter. It is too late for the ‘bazooka’.

And he still goes not get it. If small Greek depositors receive drachmas for their current euros, there will be immediate banks runs in all of the peripheries and probably core countries.

His speech does however position him on the right side of the fence for future work with these new EU institutions. Taking the German side against the French will enhance his BUBU standing immensely.

“At that point Greece may decide whether to stay in or not”.
How disingenuous.
LBS knows full well that the ECB may refuse collateral. This after all was his threat to Ireland in the midst of the crisis.
Greece is being pushed to impoverishment or exit.
History will point the finger for the resulting mayhem at Germany and the ECB, including LBS.

@ Jesper Doesn’t Greek CB liquidity provision get reflected in Target 2 balances in any event, just like for Ireland’s PNs (external) funding element?

That said, Germany clearly doesn’t want to be the one to [directly] pull the trigger. Too many historical connotations, etc. An ECB front would be better than a German front. However, based on what Schauble has been saying, he /Germany wants the the Greeks to pull the hanging-lever. In the last week the political positioning has become intense around this, obviously. I for one won’t be surprised if the Greeks do exactly what the polls there are suggesting – vote even more far left to reject austerity but stay with the euro (play chicken with the ECB /Germany on who pulls the lever).

1.27 being (illogically) resisted by the euro. Suggests US intervention in the market? US and China have much to lose if the euro falls to far too fast. Will be interesting to see if a story emerges re global CB intervention to buy euro and sell $, etc……As we have seen in the past, the US ‘sells’ $ to Europe to maintain $ liquidity for European banks, etc so they can service their $ obligations.

http://www.bloomberg.com/news/2012-05-16/asian-stocks-oil-yen-fall-on-greek-talks-japan-orders.html

Given the tennor of a number of comments in recent threads, and the fact that Karl W has unfortunately taken up residence in the international space station, perhaps someone would volunteer to take over where this left off:

http://www.irisheconomy.ie/index.php/2011/09/20/tasc-on-promissory-notes/

These bits are pertinent:

“Just quickly, on the options. Don’t forget that ELA blurs the boundaries of “When is a Euro not a Euro” viz. Who stands behind it.

You can take the view that these are not proper Euros at all.”

“@ Grumpy

Trust me, they were proper Euros — they bondholders and depositors that got paid off all have proper Euros in their accounts.”

“@Karl

We all know the depositors got Euros in their accounts.

Revisit the stuff from the thick end of a year ago, Buiter was quite interesting on this, and it is part of the reason themore cautious holders of those “Euros” fled the state.”

“@Karl

“I’d also note (slightly tongue in cheek) that the ESCB staute
http://www.ecb.int/ecb/legal/1341/1343/html/index.en.html

doesn’t actually say that a national country central bank with a capital deficiency has to be recapitalised by the state.”

Yes. Suppose Patrick Honohan were to turn into Pogue Ma Honohan and press the print button. What would he be printing?”

“@ Grumps

Not sure what you’re on about — perhaps you could explain that a bit more.”

“@Karl

If PH accepts PNs, Formal or Informal Comforts, or even old shoes as collateral, to the chagrin of JCT (QE-local if you like), would you regard the credits created as Euros? Would you accept payment with them? This is a potential if not likely, means of satisfying obligations to creditors.”

“Honestly grumps, I don’t see why you find this so complicated.

The credits handed out by the Irish Central Bank in its ELA operations are credits to bank reserve accounts exactly as occurs during normal open market operations. From these reserve accounts, a bank can call up and request Euros — shiny notes with pictures of nonexistent buildings — to fill their ATM machines.

People might not like ELA but the idea that the credits handed out during this process are not euros is just wrong.

As for what PH is allowed accept — he can’t issue ELA without approval of the majority of the Governing Council, so there’s no point mentioning JCT’s chagrin. He approved this operation.

And the key thing the GC demanded was a government guarantee that the ELA would be repaid. Not that the loans be collateralised by a piece of government paper but that DoF write to the Bank and guarantee the ELA would be repaid. They did so but the letters don’t provide a timeline for repayment.”

“@Karl

No, keep going – into tail risk teritory. Think “Hunt for Red October” type rough money missile-toting Pogue Ma Honohan.

Not a central scenario – more like Greece now plus more discord and falling out with Europe.

I am suggesting that you can, in the case of a real dispute, maybe, have loss of control over local printing. A more nebulous alternative to re-introducing the old currency.”

I like LBS style …. he comes on the stage and talks about “adjustment”
He is challenging us not to be weak in the face of evil.

He is playing with people , as if people did not understand the simple concept of a exponential function & curve.
These adjustments have destroyed the wealth base of Europe as they “adjusted” their economies to exponential sov debt these past 40 years or so.
Destoying the physical economy to service a metaphysical form of money construct.
He represents a parasitical class – you cannot reason with him , there is little point.
You don’t go Galt , you go Jesus
.
http://www.youtube.com/watch?v=EbOzfXAJm4I

@ Grumpy Thanks. Karl appears to explain that the local CB issuance represents real euros….how it is supposed to work, normally. However, these are extraordinary times. Karl does not address the legal basis….It isn’t clear to me that local CB issuance is not in euros, legally, with Euro pro rata participation via Target 2…..I’m no expert, but it’s not clear to me. Nothing that I have read from Karl re Target 2 makes it any more clear, to be honest. Why push euro issuance down to local CB level in any event, if not to limit ECB liability….? But how does that ‘legal’ push down sit with the target 2 accounting /recording entry mechanism?

May have been explained before…apologies.

Arthur Beezley sums up the current state of affairs likely for IRE in the event of a Greek exit…

“Europe’s patience with the country has practically disappeared. Any Greek exit would present abundant, possibly uncontrollable danger for Ireland, star pupil in the bailout class but still encumbered by a gigantic banking debt. As financial markets reassess risk in light of any Greek departure, the weakest countries would come under the threat of speculative attack and seizure in their banking systems.”

And the band played Walzing Matilda……

@Lorenzo Bini-Smaghi

The latest episode of the eurozone crisis casts doubt on the basic premise of most economic models – that economic agents, and governments, always act rationally, after assessing the costs and benefits of alternative options.’

Dear Lorenzo – you have now progressed from the ‘Conflationist Fallacy’ [that sovereigns and citizenry are responsible for financial system losses] to the ‘Ontological Fallacy’ [enjoy the suspense – it is rampant in Harvard].

As to rational agents, at individual level, you might take an undergraduate module on 20thC philosophy of science …

@FT
Pls forgive me litte pedagogic citation. Keep up the good work.

Minister Noonan plays the Greek Card disgracefully ….

As reported in the Neu Paper of Record

Noonan: No vote could force euro exit
By Juno McEnroe, Political Reporter

Thursday, May 17, 2012

Finance Minister Michael Noonan has suggested that Ireland may be forced to leave the eurozone if voters reject the EU fiscal compact treaty in the upcoming referendum.

In the latest poll carried out by Millward Brown Lansdowne on behalf of the Irish Independent, 37% of the 1,000 people questioned said they would vote yes in the May 31 referendum, 24% said they would vote no and 35% remained undecided. A further 4% said they would definitely not be voting.

Mr Noonan said a no vote would be a “dangerous leap” in the dark for Irish citizens. He said Ireland may need to enter “a new kind of an arrangement” rather than be a full member of the eurozone if there is a no vote.

Read more: http://www.irishexaminer.com/ireland/noonan-no-vote-could-force-euro-exit-194146.html#ixzz1v5DY4Aat

Shocking – absolutely shocking – ………

Thanks D O’ D

Bringing forward my last post to here:

“@ Mark “Michael Noonan will take the piss out of them [the Greeks] like he did today with his class-clown feta cheese joke.
Given the seriousnes of the question for which he gave that as an answer, I think we all need to be seriously worried about his competence.”

Completely agree, Michael isn’t competent to be in Finance. He’s a traditional populist, like Kenny and (absolutely) Gilmore….Little substance, and struggling (increasingly failing) to stay in touch with Irish public sentiment.

John Moran (new Sec Gen Finance) is a good, intelligent, finance experienced guy. However, recent comment for instance from a very senior private equity fund, work-out investor (”restructurer”) in the US said “He’s powerless to do anything amidst all the politics…Ireland is cripled by politics.” Official Ireland has little credibility in the US PE community given their experience with Ireland in the last few years (NAMA especially – note!, but also e.g. Eircom).

US MNC in Ireland is a bit different to PE…..They are gooing over the reduced fixed costs. If Ireland loses its 12.5% CT rate, however, it will be game over…Many MNCs will depart, very quickly…..The FC + pending 2nd bailout will end up with that, as per the IT article today (objectively read) and Official Ireland will “fall in” with Germany /France /ECB rather than rebel, in the usual (Kenny, Gilmore, previously FF) manner, despite ‘words’ indicating differently. Even the Major advisory firms there in Dublin are fearful (under the surface) of this inevitability…actually expectant of that demand from Eurozone….in the not-too-distant-future. Official Ireland’s strategy to-date is whittling away any negotiating leverage Ireland may have /may have had…..Best boy in class will end up “bullied” further in the end….and will lose if the current trajectory is pursued ‘mindlessly’.

When the noose tightens further, it’ll be interesting to see how the (Irish) “PIGS” squeal. It will be even more interesting to see whether there is really any Irish National Unity……or is it just “I’m alright Jack” by the few who are pulling the strings and benefitting from the recession. Official Ireland may have an economic strategy currently (albeit ‘misguided’ in my view), but there does not appear to be any material, national social policy or unity backing that up (hence the Q-marks over the FC referendum being passed), willingly believed in and supported by the people of Ireland. In that sense, Irish politics has failed the Irish people thus far.”

The FT editorial is a balanced one.

Yes, the Greeks should not be forced to stay in the euro. If a government tears up existing agreements but still wants to stay, then that is surely a different story.

The country’s past excesses make austerity unavoidable, with or without a eurozone rescue loan, and within or outside of the euro.

This is the part that the cargo-cultists here, including some academcs, find hard to fathom.

None of them presumably ever tried to rescue a failing company?

If there isn’t a two-way process, involving both the EU institutions and individual countries, there will never be a viable one.

It’s always easy to tell others what do but when advocates of Irish mortgage forgiveness were asked would they pay higher taxes to fund such measures, the answer was no — hadn’t BlackRock already engineered a sufficient buffer for the banks to absorb the cost? — a sort of stealth tax!

@ All

The crisis now has much wider implications than just Greece for Europe and for relations beyween Europe and our nearest neighbour and main trading partner.

http://www.ft.com/intl/cms/s/0/2479afa0-9f67-11e1-a255-00144feabdc0.html#axzz1uXdTsPel

Notably;

“The British prime minister’s comments are likely to infuriate eurozone leaders, who believe his commentary from the sidelines is unhelpful, not least because of Mr Cameron’s unwillingness to put money into a new EU bailout fund.

François Hollande, the new French president, has accused the British of treating the EU like a “self-service restaurant”; he is expected to meet Mr Cameron for the first time in Washington this weekend, ahead of a G8 summit.”

Both Cameron and King may be looking for excuses to explain why the UK policy approach is not going to plan but this type of intervention is not helpful, to put mildly.

Meanwhile, in the Emerald Isle, commentators are expressing surprise at the number of “don’t knows” in respect of issues which are clearly completely unsuited to decision by way of popular referendum in a debate which seems divorced from it wider European context (other than in terms of which address we can submit our next loan application to).

@ All

Brendan Keenan’s perceptive commentary in the Sindo fits into the general theme.

http://www.independent.ie/opinion/columnists/brendan-keenan/brendan-keenan-treaty-is-first-baby-step-to-recovery-3105730.html

The only quibble one might have is that the problem of disparities in European competitiveness is much wider than the question of variations in inflation rates. Distortions in product and labour markets which are deiberately engineered in response to myopic national domestic political pressures are the real source of difficulty.

@DOCM,

It’s certainly encouraging to see a few of the media types engaging their brains – for a change – and making a reasonable fist of communicating the issues to Irish voters. The deficiencies are still there of course. They can’t get their heads around what ‘structural reform’ might actually mean. But, on this one, they should probably be excused; most economists don’t seem to have a bull’s notion either. Or, if they do, they’re not telling us. Too many horses might be frightened, perhaps.

But on the referendum, I was gob-smacked by today’s IT editorial. A sebsible, solid, positive case being made in an Irish media organ. Well, I never:
“Back to first principles: the purpose of the fiscal treaty, its fiscal disciplines and supervision framework, is to provide the euro with the sort of bulwark or defence mechanisms all agree it lacked from its inception. Money mirrors the economy from which it issues, and a sound currency can only remain sound if the fundamentals of that economy are right, if deficits and debt are controlled, if a means is found collectively to manage the broad outlines of economic policy and to enforce its disciplines…

To that end we have come together with partners voluntarily to create the necessary structures for our common project. And, to enjoy the potential benefits of such a robust currency, not least the possibility of using its weight in the markets to create relatively cheap credit, we all agree to play our part.

ESM loan conditionality, the “blackmail clause”, is not an unnecessary added extra, but an essential pillar of the whole project, crucial to eliminating the “free rider” problem that Greece’s former financial shenanigans exposed and which so terrifies Germans with their memories of unbridled inflation. Blackmail it is not. It is an essential building block; reassurance.”

There’s still far too much deceit, denial, dishonesty, dissimulation – both here and throughout the EU – but it’s being chipped away at.

@ MH

Greek standards of living and the nominal size of the economy have to shrink materially from 2008 levels (probably by 25%). This as plain a fact as there can be. Some people still seem to deny it. The only real question is over how long the implementation period should be, and where the burden of losses should lie.

@Mr. Bond,

Greeces’s current dysfunctional politics obviously have some roots in the settlement that accompanied the restoration of democracy in 1974, in the circumstances that led to the Colonels’ coup in 1967 and the post-WWII cicvil war, but they really emerge from a patterm of behaviour pursued since the state was established in 1830.

The rest of the EU, in particular the creditor nations, simply cannot secure sufficient democatic consent to support a manageable implementation period and the Greek polity is unable to decide where the burden of losses should lie.

The fiscal treaty ref in Ireland is now a complete sideshow. Events are completely over taking any of it’s relevance.

@DOD/Paul W.
re:The feta cheese ‘joke’.

Noonan seemed to think it was funny. It was the kind of joke that would have gone down well with a National Front audience.
‘They laughed at the Greeks and I said nothing because I was not Greek….’
Shameful in the extreme.

Re ““If the common currency disintegrates, it will be because monetary union and national responsibility for banks are an unsustainable combination. Policy makers understand this now. The rescue funds can be used for bank bailouts; and the commission has issued belated plans for pan-European bank resolution rules and deposit insurance”.

What the heck? The inference is democracy is a downside in the EU. Or at least its being redefined. Ladies ans gentlemans, Wolfgang Schauble uses the phrase subsidiarity, here http://www.youtube.com/watch?v=WhEkZC6PUck I’m wondering as the phrase became a keynote theme in the earlier Treaty debates on Lisbon, why this phrase hasn’t featured so much in our campaign. Probably because of the following:

“Subsidiarity is also a tenet of some forms of conservative or libertarian thought. For example, conservative author Reid Buckley writes:
Will the American people never learn that, as a principle, to expect swift response and efficiency from government is fatuous? Will we never heed the principle of subsidiarity (in which our fathers were bred), namely that no public agency should do what a private agency can do better, and that no higher-level public agency should attempt to do what a lower-level agency can do better – that to the degree the principle of subsidiarity is violated, first local government, the state government, and then federal government wax in inefficiency? Moreover, the more powers that are invested in government, and the more powers that are wielded by government, the less well does government discharge its primary responsibilities, which are (1) defense of the commonwealth, (2) protection of the rights of citizens, and (3) support of just order.[2]”

http://en.wikipedia.org/wiki/Subsidiarity

You see the Tea Party in the US there? Some allege conglomerates, MNC’s and private banking are part of the same campaign to wedge away control of financial services from national parliaments and hand it to what Schauble regards as ‘independent’ ECB.

Off this topic, rather enjoyable to see SF squirming as they try to manipulate the “No” campaign into some sort of an ESM free entry campaign without a blackmail clause!

There must be only a few of us left who still resist the privatisation of EMU by unelected bankers, want out, and would prefer a joined up 32 county Ireland alliance with England, Scotland and Wales.

The ESM has turned into an albatross around all our necks:

“Ah! well-a-day! what evil looks
Had I from old and young!
Instead of the cross, the Albatross
About my neck was hung.”

@ MH re Finfacts

“If foreign creditors cooperate and accept payment in the new currency, the losses they take will be substantially less than the haircut they will ultimately endure if Greece continues its austerity measures and remains on the euro.”

The FC I believe is being delayed ratification not merely because of Hollande’s wish for growth protocols, but precisely because of that point above.

If the ESM is signed and passed, Greece will not be allowed to redenominate its debt into a writedown to a new value to be determined in drachmas. It will lose any case for this in any International Court of Bank Settlements.

A two tier Europe involving the exit of other countries, or just Greece, or a breakup must be decided upon, before the FC is passed. Pending resolution of newly redenominated debt, the FC should be deferred. Putting in place FC binding countries to the ECJ threat of sanctions re debt denomination and deficit reduction before the above gets resolved, is plain farcical.

@ DOCM 7:03

Re Keenan,

His article is summed up in:

” Something like the fiscal treaty has to come first. ” The kernel of his article is summed up there in that reductio ad absurdum 🙂

Sweet dreams, maybe he’ll let us know more about his “Something like’ s . His borrowed idea that Germany should introduce inflation, euro bonds is so out of whack with Bundestag, as not worth the paper its written on.

Perhaps he should have written on how Germany’s banks are exploding as they pipe interest from the peripherals into their vaults; or, maybe he should drop the ludicrous idea Germany, should lead Europe by reducing taxes, thereby encouraging inflation, have a huge party at PIGS expense? Lol.

Sofar Germany has earned over ¢380 million interest on the Greek bailout

http://www.athensnews.gr/portal/11/53820

@DOCM

“Meanwhile, in the Emerald Isle, commentators are expressing surprise at the number of “don’t knows” in respect of issues which are clearly completely unsuited to decision by way of popular referendum in a debate which seems divorced from it wider European context (other than in terms of which address we can submit our next loan application to).”

+1

@Minister Michael Noonan

You might consider the Irish children whose parents cannot affort to buy them “Irish” cheese for their lunch boxes! Meanwhile you are filtering billions to the financial system and sending the bill to this kid’s future ….

A child who collapsed in a Cork City primary school was found to be “severely undernourished” — a condition widespread in slums and famine zones.

Worker’s Party Cllr Ted Tynan revealed details of the “desperate case” at a Cork City Council meeting last night which backed calls for a national poverty strategy. …..

St Vincent de Paul Cork branch chief Brendan Dempsey said the undernourishment case was “bound to happen”.

“700,000 people are on the breadline living in poverty, 200,000 are children, and I know of mothers and fathers going hungry to feed their children.

“Two or three years ago we were being asked for shoes or help with the rent. Now we are simply being asked for food. The politicians are living with their heads in the clouds.”

Read more: http://www.irishexaminer.com/ireland/undernourished-child-collapses-193911.html#ixzz1v7UAbYvZ

Do I detect an increase in the number of anti-democrats on the blog ….

…. ? Shur a swabian housefrau could figure out the fiscal corset in 30 seconds flat …. there must be another agenda!

The BORG! The Borg, in alliance with the FERENGI, have captured DOCM, Paul Hunt, Zhou enLai …. The IT, Indo, Sindo, et al RAISE SHIELDS before we are all ASS-immilated.

Phew … that was close!

That Financial Times article by LBS is essential reading for Irish voters.

It confirms that the people formerly and currently in charge of the EU are dangerous market fundamentalists who feel increasingly able to state their dislike of popular democracy and any approach to economic policy which is not doctrinaire neoliberalism.

When LBS says:

Populists who argue that markets should not dictate economic management in democracies are gaining ground everywhere. Such arguments create the illusion that there are easy ways out and distract voters from rational decisions.

Europe’s history over the past century should teach us not to underestimate the risk of collective irrationality and the dangers of populist politicians.

Just in case it is not clear to anyone LBS is making the case that

Occupy Wall Street == Oppostion to Fiscal Compact == Hitler

What a card!

Except that he is deadly serious.

I’ve said it before to mixed responses here but people underestimate the extreme ideological positions and elite interests now represented by mainstream EU figures and institutions. If, after the greatest market failure of the last eighty years, the likes of LBS can equate anti-market sentiment with fascism (and of course the Holocaust) one can easily imagine what kind of actions our current EU/ECB leadership are ready to take to protect the market from the people.

They really do believe that they have to destroy European democracy to save it.

@David O’Donnell

“Do I detect an increase in the number of anti-democrats on the blog ….”

There is definitely something in the air. Perhaps it has blown in from overseas.

Meanwhile, in certain remote areas, its been reported the Fiscal Compact has appeared in the sky glowing.

Worshippers have fallen to their knees keeping vigil until darkness believing FC to be a modern version of Solomon Scrolls of the Old Testament.

Both Christian and Quranic chanting have joined together in this new metronomic rhythm sounds like, ‘wewanESMbailout’; others say its, ‘wewanESMout’ repeating over and over again 🙂

@Joseph Ryan

Noonan seemed to think it was funny. It was the kind of joke that would have gone down well with a National Front audience.

We hope that by siding with the thugs in the ECB and Germany we will avoid their attentions. It’s gone from Fianna Fail’s attempt to build a bridge over the River Kwai to Fine Gael and Labour-lite’s attempt to get jobs as camp guards.

I feel dirty.

I’ll have half of those assets please, few telcoms, energy semi states, docks, any islands? Use the other half to grow and pay the interest on debt, grand.

Financial services, IFSC takings a tad undernourished. We’ll raise Corporation Tax and FTT, throw it all in the bag there. You don’t want to impose more austerity, and tax the top 10% earners, do you?

Er no! ‘Well, we do’ 75% on earnings over 100k, will that do?’ Sure throw that in the sack as well. But we’ll make an exception for foreign workers.

No cribbin and whingin about the public sector ! We can’t afford full time workers in the public sector. Part time and half time for all, with a little 20% cut in wages, what do you think? Most of your population has emigrated and they’re not needed anyway.

What, no likee? ‘Ye better likee or off to ECJ court for you. Remember last years ¢200m sanction?

What are ye complaining about now? Isn’t New ScoopyDotCom opening in Galway this week with 5 workers? Yeah, they’re importing their workers from abroad with special tax breaks, but they’ll buy up those for-sales all over the place.

Plenty opportunity for private schools and private hospitals, havn’t ye, to replace the inefficient public ones?

I do hope I’m wrong 🙁

For the record, I felt ashamed listening to our Minister for Finance Michael Noonan making jokes at the Greek people’s expense when they are in a terrible place.

We are relying on the unity of the EU to save us and this is how he talks about another member state in trouble??

@zhou_enlai

+1

I was disgusted…. and the thought also crossed my mind: “those in glass houses shouldn’t throw stones.” I don’t really know what he’s got to smirk about.

re- David O’Donnell:”Do I detect an increase in the number of anti-democrats on the blog ….”

A swathe of nations are being dissolved under the sole aegis of narrow unrepresentative bodies, the democratic achievements of civilisation over the last several centuries are being dismantled, and the only matter of consideration in the process is an economic abstracted from the human.
The opinions of investment bodies in favour of forced political union are given more a voice in this than popular will. The Chinese model is seriously seen as something to be emulated. And this is being pursued with an almost religious zeal as some sort of economic Manifest Destiny, and has penetrated the isolated and narrow edifices of our political & media fortresses with the same sort of collective psychological contagion that birthed national socialism, the cultural revolution and every other historical instance of mass hysteria.

re- Shay: ‘ ”Populists who argue that markets should not dictate economic management in democracies are gaining ground everywhere. Such arguments create the illusion that there are easy ways out and distract voters from rational decisions.
Europe’s history over the past century should teach us not to underestimate the risk of collective irrationality and the dangers of populist politicians.”

What a card!
Except that he is deadly serious’

With the added irony that the institutions he’s presumably trumpeting as the antidote to this is the actual historical heir to that recurring beast.

The psychological pathology that an individual can undergo can be & often is repeated in mass movements (and the quiet and ostensbly ‘cultured’ & ‘civilised’ consensus-by-conformity of the affluent is particularly receptive).
And the last one in europe wasn’t cured – it was suppressed; sans certain ideological elements that it later found tasteless.
Those particular heads relinquished by the hydra, sure enough, are rolling around, hissing and spitting on the fringes; to be picked up & pointed at by Neurope saying ‘Beware the alternative’.
Let no-one doubt the reality of this – when pushed into a corner by unwelcome questioning they revert to the maniacal grins; the only substance beneath the veneer of their public ratiocinations.

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