What the weaker euro zone countries could do for Greece

In Saturday’s Irish Times, Alan Ahearne does a good job laying out the dangers of unfolding events in Greece (see here).    Political support for the adjustment programme has been lost, with the Greek population understandably perhaps blaming much of their disastrous economic performance on the conditions of the programme.   While the austerity measures have certainly played a role in the growth performance, they are just one component, with the confidence-sapping effect of the fear of a melt-down situation itself playing a major role.   The correlation between austerity and weak growth is now deeply established in the minds of many Greek voters – whatever the actual contribution of the austerity measures.   A rejection of the programme in the elections is a real possibility.   So too is a tough response from official creditors to an unwillingness to meet the programme conditions.

A Greek exit from the euro zone could be containable with sufficient will.   However, there is a likelihood that moral hazard concerns could lead the response might be too halting, leading the crisis to easily spin out of control.    As Alan argues, even with a successful containment, the precedent of a country leaving the euro would fundamentally change the stability of the monetary union, making it more prone to the runs that plague fixed-exchange rate regimes.  (See also Martin Wolf here.)

Is there room to give Greece more time, providing at least some political counterweight to the massive anger at the programme?   The stronger euro zone countries are understandably concerned about the moral hazard problems of any backtracking on the conditionality being applied to Greece.  

This is where the weaker countries could play an important role.   They could do so by making it clear that they see no interest in seeking relief through default or in a relaxation of formal/informal commitments, regardless of any additional accommodations for Greece.  This need not include measures currently under discussion for strengthening the overall crisis management, including the lengthening of the maturity of the promissory notes, direct injections from the ESM into undercapitalised banking systems, or relaxing the aggregate stance of the Excessive Deficit procedure (especially for countries with fiscal space).    I think this goes with the grain with the approach of governments in Ireland, Italy, Portugal and Spain.   (Indeed, in the case of Spain, their unwillingness to accept a one-year extension for reaching the 3 percent target under their Excessive Deficit Procedure (EDP) may show excessive unwillingness to accept the easing of conditions, given that it can be viewed as part of broader easing of the aggregate stance of the EDP on the basis of the aggregate euro zone considerations.) 

I don’t want to exaggerate the impact of leadership of the weaker countries on this issue, but it could help tilt the steering wheel from what looks now like a very dangerous course.   Greece has got itself into a mess, much of it of its own making.   Greece has no choice but to make tough adjustments, but giving more time may be the only way to prevent political rejection.   Solidarity – but most of all self interest – should lead all euro zone countries to work hard at finding a workable way out. 

140 replies on “What the weaker euro zone countries could do for Greece”

‘They could do so by making it clear that they see no interest in seeking relief through default or in a relaxation of formal/informal commitments, regardless of any additional accommodations for Greece……’

Are you serious!? You’ll probably hear it from Enda alright ‘Well pay our debts, we Irish love paying debts, we’re not like the Greeks, we don’t believe in a future for the young, they’ll be alright, they can speak English and sure we might see them again in a decade or so’

Did you hear any banks saying ‘don’t socialize our debts, you might become an insolvent country’? Besides I can’t see how it’s of consequence either way, the numbers don’t lie.

“Greece has got itself into a mess, much of it of its own making.”

I don’t know about that , the meme that Greece overspent (if a country overspent it would not be leveraged )
Any analysis of the Greek thingy would suggest they also experienced a credit hyperinflation.
And even if they did not the deposits that tourists spent in Greece were a product of external credit hyperinflation…….
The political geography lessons changed in the late 80s early 90s for Christ sake.

I am tired of this…………. – its the euro itself , fiscal austerity so as to pay exponential “sovergin” debt is the problem.
Growth needs credit hyperinflation events.

If you look at Micheal H.s recent house credit hyperinflation chart you wonder why economists have not questioned the inefficiency of the the late 80s , 90s ,00s growth.
Given the amount of credit production the GDP growth was very poor as we had to import so much crap to sustain this monstrosity.


It does not appear to me that Greece will remain within the EuroZone. Too much damage has been done to the Greek people. Their own incompetent Gov’t has a lot to answer for. Why was there no due diligence done before and shortly after Greece’s entry by the EC, ECB and BIS. After the entry scam was discovered the core led by Germany meted out punishment pure and simple which made a bad situation immeasurably worse.

The only solution now is for Greece to leave voluntarily with guarantees from the EZ countries collectively and the ECB in particular that bank deposits up to Euro 50,000 to 100,000 will be protected and the two soundest Greek banks will be back stopped for at least three years. The Greek Gov’t will have to be funded to a level that allows them to provide essential services such as policing, emergency health care, hunger alleviation.

If there is a societal breakdown complete with bankrupt Gov’t and banks then contagion will wreak havoc EZ wide. It will require some political intelligence and courage on the part of the EZ as a whole but the alternative is grim.

“This is where the weaker countries could play an important role. They could do so by making it clear that they see no interest in seeking relief through default”

Seriously John? So on 26th June 2012 when this country will pay two unsecured unguaranteed senior bonds at what was Michael Fingleton’s INBS, two bonds that total €640m, we should make “it clear that they see no interest in seeking relief through default”

When the next tranche of the promissory notes falls due in March 2013, we should make “it clear that they see no interest in seeking relief through default”

But as we struggle under the weight of 100%-plus debt:GDP in the mid 2010s, when EU Accession countries are taking FDI from us – new FDI and existing FDI like Dell – we will still make “it clear that they see no interest in seeking relief through default””

Even Government TDs, NOT Peter Mathews I should emphasise, are openly saying that our debt is unsustainable and they hope our partners will arrange some relief in the years ahead.

And what, we expect our partners in Europe out of a sense of ethics to provide relief through lengthening the promissory note payments or getting the ESM to invest in further bank bailouts, like the €4bn identified by Deutsche Bank on Friday?

Egad that is the greatest load of poppycock. Alah having advised on this mess now says “more”, while the fiscal council chairman says in effect take on insustainable fiscal strains as a demonstration of how strong we are. It’s the same thinking that gave us the guarantee.

@John McHale,

I fear you are running the risk of losing the plot here. I realise these comments are expressed in a personal capacity, but, perhaps, you should not assume that, in the public perception, they will not be seen as representing the views of the IFAC. I also realise what you are advancing may be seen as ‘going with the grain’ of the PIIS governments’ approach, but I suspect this is for the ‘optics’ viz-a-viz the creditor countries; behind the scenes I would be very surprised if they are not arguing for various measures of relief.

The resolution of this crisis requires huge effort by governing politicians, policy-makers and regulators in both the creditor and debtor countries. We need to recognise this. I have previously been critical of Colm McCarthy wrt his stance on the Fiscal Compact:

But he seems to be back on track again:

The fundamental problem is the Faustian pact between banks and sovereigns and the extent to which previously reasonably strong sovereigns have been forced to shoulder on their own the impacts of their previous folly in relation to banks, property and fiscal policy. The creditor nations which didn’t totally lose the run of themselves have been able to hide, ‘warehouse’ or ‘manage’ their exposure to their banks – and their voters are very reluctant to help those who lost the run of themselves.

Imagine if Ireland had been well-governed, there had been no double-bubble, national debt had been paid down – with, possibly, a genuine sovereign wealth fund built up – and their was a requirement for Irish voters to give consent to bail-out those who had lost the run of themselves. I doubt if you can; but I can assure you the irish reaction would have been nauseating – and far worse than anything we’ve heard from the creditor nations.

The primary responsibility to resolve this crisis is in the hands of voters in the creditor countries; let’s hope their governing politicians will be able to persuade them – and let’s not do anything to make that task more difficult.

But there is an equally pressing responsibility on voters in the PIIGS to consent to reforms that will enhance their ability to help themselves. Not surprisingly, there has been negligible engagement on a post that goes right to the heart of these reforms:

It’s obviously far easier to rant at the perceived perfidy of foreigners than to begin to tackle the enemy within. And for economists, there is a need to question the slavish adherence to narrow neoclassical microeconomics and its application to sectors where it has manifestly proved its deficiencies.

Economic growth will not miraculoulsy happen without reform. Exports may boom and save us. But what if they don’t?

@JMcH Did you miss Mary-Lou’s morphing into Tsipris during the week – we’ll get ESM funding if we reject the TCSG because it will cost the EU too much not to give it to us. Not EFSF or other funding as Seamus Coffey suggested earlier on this blog, but the specific funding which is dependent upon ratification of the TCSG.

I don’t see the weaker States having the political capital to wish for anything other than the worst for Greece while crossing their fingers and hoping to avoid contagion. The moral hazard arguments against “rewarding” Greece’s continued political failings are just too strong. The notion that the EU/ Eurozone could be overtly blackmailed by the electorate of any one Member is too dangerous in its appeal to others.

@ John McHale

I doubt if statements of commitment from the governments of other struggling countries would help alleviate the Greek crisis as come election time, alluring alternatives are always on offer.

If a Greek government decided to negotiate withdrawal, the EU would have to engage with it. Of course, there would have to be an emergency during the interregnum and a left-wing government would hardly be happy to have the army maintain civic order.

In a more ideal situation madcap cuts could be delayed if there was a commitment to reforms that would be eased in over a number of years. The fact that most of the state’s drugs’ bill mainly comprised high price drugs that had gone off patent, shows the depth of corruption.

However, we don’t have to look very far to observe the difficulty of taking malt-coated lollipops from vested interests.

So while a devaluation of a new currency would not be a panacea as a more than 60% devaluation against European currencies in the 1980s was just a temporary fix, eventually, after much hardship, a competent government would assume power, as happened in Turkey – – current debt/GP ratio is 36%.

The Greek government “has an extraordinary portfolio of assets” and the balance sheet of the government’s Real Estate Development Company amounts to €280bn, the IMF said last year.

There are hazards as regards other countries leaving the EMU but while Ireland and Portugal would not matter, Italy and Spain would have to be supported.

Italy has a large public debt but the level of private debt is low.

The Dork makes a pertinent point on growth in the 1990s and I repeat again that the growth crisis in Europe predated the launch of the euro. Until this is understood, there will be no solution.

Several Irish economists currently have media platforms and you have a position of potential influence as head of the fiscal council but absent an realistic/unvarnished/spin free outlook from the government, economists generally tiptoe around ‘sensitive’ issues while others realistically wonder about the sustainability of debt of say 150% of GNP or more (including an adjustment to GDP for accounting manipulations in addition to MNC profits) plus high personal debt levels.

On the outlook, it should at least be informed by recent history: as the workforce expanded by 440,000 in 2000-2007, there was ZERO net jobs growth in the exporting sectors. An indigenous trading firm typically exports 35% of output and job numbers grew by 10,000 but that total was offset by losses in the MNC sector.

“Politics for the next 10 years will be about taking things off people, unfortunately,” Minister Richard Bruton is quoted as saying to a Dublin constituent this week.

Thomas Friedman says in The New York Times today:

It’s because we’re leaving an era of some 50 years’ duration in which to be a president, a governor, a mayor or a college president was, on balance, to give things away to people; and we’re entering an era — no one knows for how long — in which to be a president, a governor, a mayor or a college president will be, on balance, to take things away from people. And if we don’t make this transition in a really smart way — by saying, “Here are the things that made us great, that spawned all these dynamic companies” — and make sure that we’re preserving as much of that as we can, this trend will not spread as it should. Maybe we could grow as a country without a plan. But we dare not cut without a plan. We can really do damage. I can lose weight quickly if I cut off both arms, but it will surely reduce my job prospects.

Robert Shiller of Yale writes on choosing better metaphors.

There are big issues that will impact on growth apart from a wobbly recovery in the US. China has had a hugely beneficial impact on Latin America and Africa but shifting from reliance on high investment to consumers, having to contend with a poor health service and costly education system, will not be easy.

Pre-2008 isn’t coming back and it’s time that economists told some bitter truths that their university presidents and much of the public don’t wish to hear.

The underlying objective sought is a sound one but states simply do not behave in this benign manner. Colm McCarthy is closer to the reality in his comment in this morning’s Sindo. In summary, he says that Spain is TBTF but Greece, and probably Ireland, are SETF (small enough to fail).


He also charts the likely sequence of events and exposes the hollow nature of the arguments advanced by Libertas and other opponents of the TSCG.

It is a pity, therefore, that he also states the following;

“Our European ‘partners’, whose hostility to this country has been amply demonstrated, will welcome an excuse to exclude Ireland from whatever bank rescue deal that must be stitched together for Spain”.

This is totally inaccurate in the sense that the member countries of the EU do not do “hostility”. (That is why it was established). It may be that leaving the country with the entire burden of the bank failures was unwise but that is the way the euro was set up. But the creditor countries would view their attitude to Ireland in an entirely different light, especially with regard to the back-up provided by the ECB.

We live in a world of realpolitik. This is the underlying thesis of the article. If this recognised for other countries, it must also be recognised for Ireland.


I have a comment in the queue for moderation that agrees with – and seeks to amplify – your comment. It may be that it goes a bit too close to the bone and it may not appear. It is quite remarkable that macroeconomists have been unable or willing to counter the distillation of the breadth, depth and profundity of Keynes’s intellectual insights – some of which, sadly, he didn’t live to see apllied in practice – in the popular perception to the simplistic and potentially fatal notion of raiding, taxing and spending one’s way out of a recession. Equally remarkable is the slavish adherence of many economists to the application of narrow neoclassical microeconomics to sectors where it is manifestly deficient. And most remarkable of all is the general ability to understand or apply the insights of politcial economy and institutional economics.

I wonder if it would be best for Ireland to abandon the Euro and the permanent crisis attached to it, and take up the pound sterling again. Is there any case against that? I can’t see one.

The G8 meeting seems to have changed the game again:

So it seems like they all told Angela to cop on. I suspect the price to be paid for Eurobonds will be a Greek exit and ratification of the fiscal treaty. Interesting too about the ECB directly lending to banks.

These are two solutions that could actually work. You’d have to wonder though if a rational German government could agree with this – especially when they see the bill for Spain

I didnt see sneering they they only make feta on the list – Michael Noonan’s most recent intervention on our behalf where our state’s position is to laugh at the Greeks was depressing.

The Govt strategy is to say we arent like Greece cause we can laugh at them. No wonder they cant secure a write down or any reasonable concession.


We might end up like Scotland and Wales – the poorest nations in the UK save the north of Ireland. Can you see the pattern yet?

Ignoring our history but looking at the UK right here right now its clear that its ran not for the benefit of the Celtic nations, nor actually of the English but pretty much for the south east.

Would we be better off under their mercy. Unlikely

@John McHale

We should take another one for the team? Stick our neck out yet again?
To have ‘wrung like a chicken’. I think you need to reconsider your suggestion.

“Greece has got itself into a mess, much of it of its own making. ”

That could be said of Ireland and of many countries. Indeed it could be said with certainty of the whole euro project and in particular the design of the ECB, a design mandated at every turn by Germany.

Greece virtually destroyed itself with concepts of the ‘great idea’ after WW1, was destroyed by outside forces in WW2, was the subject of a CIA organised coup after WW2 that gave rise to a civil war in which it is said 300,000 were killed. Thereafter the generals were kept in power or hovering until the late seventies. In fact Greek military expenditure, urged on by NATO, is one of prime causes of the Greek crisis.

That is has not recovered easily from these traumas is not surprising. It is regrettable that the dominant message coming towards Greece is not one of support through another genuine crisis.

@ J McH

I’m afraid I agree with most commentators here. It is about that vertical bar on your graphic. Governments are powerless to say “look, give Greece a break, we won’t move our vertical bar”. If Greece gets any substantial concession as a result of the EU pandering to its looney left vote, my money would be on Mary Lou to be our next Taoiseach.

@ Jagdip Singh

+ 1

I see it all clearly now. Let’s pretend we don’t have a crisis in Ireland or else we might frighten the horses.

Those comments of Thomas Friedman (quoted by Michael Hennigan) that politics will be about taking things away from people are very perceptive.

@john mch

The philosopher Anthony Flew once distinguished philosophy from theology by describing the latter as the practice of beginning with a conclusion and then writing a five hundred page book to support it.

The GIIPS are a mixed bag. The argument advanced relies on comparing apples and oranges. Too theological for me.

Am I right in thinking that stronger countries have no choice but to give greece more time if that is what Greeks demand. That country has been cut off from new lending and the “flow” of government cash is now outward (The greek government needs to pay off debt without recourse to new foreign capital). If the Greek government can’t or won’t pay that debt, then what can the stronger countries do?

reading the crisis like a parent talking to a wayward young adult has been useful. the Germans say, well we’ll “lend” but only if we see different behaviour and you need to get a job. The problem is the youngster has no hope of getting a job and the “lending” is nothing more than the parent paying herself the cash and registering a new accounting entry in the family balance sheet. The young adult is starving but appears to be borrowing like mad.

The only possible outcomes are 1) the young adult refuses to agree to a new ” rollover” or 2) the parent forgives the debt and resumes support to the youngster. there are no other outcomes.

“Our European ‘partners’, whose hostility to this country has been amply demonstrated, will welcome an excuse to exclude Ireland from whatever bank rescue deal that must be stitched together for Spain.” -Colm McCarty-
This is a perfect demonstration of a paranoid tendency of many Irishmen . I have never met anybody outside of England with negative feelings toward Irishmen .Ireland has been one of the great beneficiaries of European unification ,in return the partners got the “no” to a previous referendum and the predatory corporate tax rate.
Four years into the recession the Irish income per head is still higher than the German or the French income .There has been very little structural reform :your political class ,your physicians and your lawyers are still grossly overpaid ,the commercial rents can still be revised only upward ,you still do not have a proper property tax or water billing system .
The British , German or Irish newspapers are explaining that what happened to Greece was all because of its political class or the law civic spirit of its citizens ,none of the other 17 partners in the Eurozone is entirely blameless ,but describing Ireland as a victim is a bit too much

@ Bklyn

Not sure of the metaphor, but the parent dares not follow (2). That is because the other young adult dependants who are in a similar but lesser plight will say, “hey he gets off coz he throws his toys out of the pram, stuff that for a game of soldiers!”

that’s exactly right, the others are watching to see what happens and anything done here creates a precedent. And the parent is married to an alcoholic (France) who gets away with spending over half of his income on “luxuries” and can’t be disciplined. It the stuff of great stories, but messy christmas holidays

cunfused punter: “If the debts are unpayable (absent some miraculous spurt of growth from e.g. a major gold or oil strike), then they will either be
(a) eventually be defaulted on,
(b) inflated away, or
(c) paid for with deflation.

The ECB seems determined to push (c), with no regard to debtor-nation’s internal structural issues, which are left to the implementing govt (though with IMF ‘recommendations’).

I don’t necessarily have a problem with (c), to be honest, but it won’t work if the Govt takes this as a signal to perform a massive transfer of value from the people to the bondholders, from poor to rich.

If we abolish NAMA and cut rent supplement, so that housing finds a realistic price, as wages fall to say 50% of present, then perhaps /real/ cost of living could remain the same.

But our glorious leaders have socialised Liabilities without socialising Assets – thus ensuring our society has wealth exracted from it in a manner which can only exacerbate inequality.

This can only result in a rise of political extremes R/L.

Does noone remember Weimar ?


@ Overseas Commentator


I generally find Colm McCarthy talks a great deal of sense and his arguments for voting Yes and his refutations of the No camp are first class. I always read his Sindo piece to get a refreshing dollop of common sense amid the sea of nonsense generally in the Sundays.

But he does seem to have this blind spot that big bad Europeans stitched us up over the banks and he goes much too far in this piece by suggesting that they’re just itching to do us down.

@John McHale
Can Greece attain growth in its economy with a debt/GDP ratio scheduled to be 160% in 2020 under the present bailout plan.

@ Overseas Commentator

21st February 2011

Dear Mr Corcoran

I am very aware of the strength of feeling on the subject of commercial rents and Fine Gael has addressed this subject in our manifesto as part of a drive to cut business costs by strengthing competition in sheltered sectors.

Specifically, in our manifesto we have committed to pass legislation to give all tenants the right to have their commercial rents reviewed in 2011 irrespective of any upward-only or other review clause.
Please do not not hesitate to contact me if you have any queries in this regard.

Best wishes
Yours sincerely

Sean Barrett TD

@ John the Pessimist
C (deflation) leads to A (default) inevitably. the question is whether A leads to a Euro exit and B (greek hyperinflation) or not. Today, the Germans say that this also inevitable, but it is not. When (not if) Greeks default, it will be “game over” for the austerity crew. The problems will shift to core banks and the choices will be stark … protect the Euro through money printing and bank recaps, or let the Euro go and leave every man to fend for himself …. the key for Ireland is to NOT be the first to default.

Greece was merely the weakest link in the chain.
This “firewalling” is all about sucking real resourses out while maintaining the value of the Euro.

Greece experienced a credit hyperinflation event like everywhere else in the Euro.
Goverments merely tax the bank credit malinvestments to pay services and the interest on sov debt.
Under the Euro they don’t make real treasuary money.


For the “adjustment” to work you need the production of base money.
This will expose the waste withen the system under a positive money envoirment.

Mickey Noonan live on RTE now…. I’m trying to stop contagion….in answer to his feta cheese remarks.

@John McH

“Greece has got itself into a mess, much of it of its own making. Greece has no choice but to make tough adjustments, but giving more time may be the only way to prevent political rejection.”

Greece is has a deeply corrupt and inefficient state sector and, consistent with that, it has a culture of accepted tax avoidance and evasion.

Many countries have structural deficiencies which both have top be addressed and will not be addressed in any gradual approach because the local population have been conditioned to accept them. This is true to a less dramatic extent in Ireland – Friday’s Bust Bank Redundancy packages are just the latest example.

Ordinary Greeks on average might be better off if running the country were outsourced to the Germans or the Swedes. So would Ireland. But the existance of nationalism and nose-in-the-trough scoundrels means the very idea is a joke.

“This is where the weaker countries could play an important role. They could do so by making it clear that they see no interest in seeking relief through default or in a relaxation of formal/informal commitments, regardless of any additional accommodations for Greece. This need not include measures currently under discussion for strengthening the overall crisis management, including the lengthening of the maturity of the promissory notes, direct injections from the ESM into undercapitalised banking systems, or relaxing the aggregate stance of the Excessive Deficit procedure (especially for countries with fiscal space). ”

This would have bullshit detectors going off on every fixed interest desk in the City of London 😉

Noonan advocating QE through the back door by giving a banking licence to the EFSF….live on RTE.

What weaker countries can do is refuse to support any punitive action that may be taken against Greece after her exit to discourage others from following.

Elsewhere; ‘A number of leading businessmen have told the Sunday Independent that Communications Minister Pat Rabbitte has said that the Government is unable to formulate a plan to deal with the economy such is the speed and ever-changing nature of the crisis.
In an alarmingly frank admission, which was made on condition of confidentiality, Mr Rabbitte is said to have stated that the Government has been pre-occupied with challenges as they arise and has not managed to construct a strategy for recovery in the medium to long term.
Mr Rabbitte asked that his remarks, which were made at a luncheon attended by figures drawn primarily from the energy sector, not be repeated outside of the meeting.’ –

After the debacle that was the ECB’s insistence that we re pay senior bond holders I think the situation is best viewed through quite cynical eyes. Our European “partners” were well aware of and implicitly supported that policy. I don’t remember a single voice raised against it from among them despite the patent injustice of both the decision and the manner in which it was taken and defended.

The Greek situation ought to be viewed as both a threat AND an opportunity.

The ONLY credible way to keep Greece in the euro is to write off a substantial amount of its debt – nobody thinks the current plan is credible.

I think we all pretty much know this we just haven’t all admitted it yet. Also we want Greece to suffer alot before we write off more and we certainly want them to obey us – we need to be sure that we are not being taken for a ride by an unwilling debtor. In other words there is a moral and political element to writing off the debt above and beyond a more mechanical cost benefit analysis, (just like there was the senior bonds).

Letting Greece go would be a very risky decision for the eurozone.

Further, given the death spiral Greece is in it may be less risky for Greece. Greece has arguably been presented with a choice between exit now or exit later, when the plan fails. In such circumstances the threat to exit now may be credible and even rational – particularly if there is a chance that Greece may be calling Germany’s bluff and will be able to, at the last hour, wrangle much better terms out of its “partners”.

It seems that every month that passes implies that a higher percentage of our debt is owed to official lenders. And, not least because of teh ECB and the euro, these official lenders have far greater power over domestic decisions than private lenders. We have a national interest in demonstrating that country’s in crisis have the potential to at very least cause trouble if they are treated harshly

This is where the weaker countries could play an important role. They could do so by making it clear that they see no interest in seeking relief through default or in a relaxation of formal/informal commitments, regardless of any additional accommodations for Greece.

The above is either the emergence of a new economic school based on a philosophy c(an)utenomics or its a new fairy tale. You can’t make the tide go back. We can pretend the bailout is working, but everyone knows it isn’t. Its failing, so John’s prescription is, make do with it, as otherwise Greece may be hit by your contagion. All the projections on which the bailout were based have been broken promises on growth, banks not requiring further bailout, and our fairy tale return to the market.

Those of us who got our analysis correct and foresaw this failure are now labeled as ‘confused’ by the Yes brigade. This is Orwellian black is white territory.

Greece will need another bailout, the first attempt has failed, once again its banks are collapsing. The money for another bailout of Greece will go into an escrow fund that will be used to pay off Greek lenders in the northern countries. Its economy will not revive, its debt/gdp ratio even by 2020 is expected only to be somewhere around 135% on some estimates.


Now Spain’s banks are beginning to collapse as they did in Ireland. There is not enough ammunition to save both Greece and Spain. There is certainly no mechanism to revive their economies. Slowly in Ireland the penny is beginning to drop that our own bailout has failed; the last thing we need is a bailout to bailout the last bailout, we need debt writedown.

Given that the design of the euro was to facilitate the
“More than a third of Germany’s GDP derives from exports (the most of any country in the world), with 60% of those exports going to its European neighbors. Germany’s mercantilist economy relies on these countries’ purchases of German goods.” where the formula of cheap lending to peripherals facilitated this, given the peripherals are bankrupt and cannot pay back the bailouts required to bail them out, the notion that bailouts can be negotiated to fund both growth required to pay back bailouts and to continue the export led German surplus/peripheral deficits, is becoming more and more absurd.

Simply Der Euro Ist Fertig, its finished as a currency union. We are witnessing its failure and its collapse. Its sad to see the only thing to come out of the G8 summit was a vague exhortation for Greece to remain in the euro. In 1935, when the Great Depression had to be dealt with from 1929 – 1935, leadership was there from Senators Glass and Steagall, the IMF was established, FDIC Federal Deposit Insurance Corporation was set up, new regulations on financial paper including the separation of investment banking from commercial banking were introduced.

Today, when the dangers of currency collapse are far greater, every move is designed by the banks, for the banks and of the banks, to shore up the failed problems that caused the problems in the first place. Politicians are standing by looking at a property on fire and the best they can do is throw further petrol on it!

The surreal is becoming the new normal. Now the IMF is accepted as part of the Irish political landscape and we’re about to install the Trojan Horse of the FC and the ESM into our constitution. Noonan is reduced to making nasty feta cheese remarks about the Greek economy when he’s brought his own economy to the brink of ruin.

He now wants to install a Trojan Horse in our constitution to ensure the banks get their money back in the event of an Irish default. The Irish economy is being led to the glue factory.

You couldn’t make it up!

Now we know…

“According to one of those present, Mr Rabbitte said: “The Government don’t have a plan. We don’t know what we’re doing. This is an unprecedented time. Things are moving so fast.”

We don’t know what we’re doing and bruton’s remark that the next decade will be about taking things from people appears to reveal a befuddled cabinet.


WRT to the Principle of Solidarity

Neither The Governor of the Central Bank nor the Minister of Finance have excelled themselves recently wrt to Greece

The Failure of Minister Noonan to issue any regret/apology on Newz-at_1 today on Radio 1, which also included an interview with Georgios Papandreaeo X-PM of Greece who was cleary embarassed by the ‘feta’ snide but too diplomatic to say so – was surprising.


In solidarity.

Greece will not default on its external debt. It will do an Argentina with an unilateral and legal declaration at 1:00 a.m. one Sunday morning that one Euro = one Drachma. For few seconds that will be true but as soon as the Drachma trades it will become 1 Euro = 3 Drachmas + or -. I am confident that this will occur.

What I worry about is the response from the rest of the EuroZone will they continue to display the lack of know how that has characterised their behaviour from 2007 to date. Who will prop up the big German and French banks when Greece delivers the (2/3 haircut) Drachmas. Who will assist Greece through the first few months of turmoil that will be precipitated by its withdrawal from the EZ. The whole world will be watching, the precedent set will determine how badly this will singe the remaining PII(G)S. The potential is there for a total collapse of the EZ leaving Germany isolated with problems similar to what the Swiss are now enduring.

As for the Irish Gov’t, they have wasted a crisis which means the next crisis is not far off. A crisis is a terrible thing to waste.

re- Christy:
”After the debacle that was the ECB’s insistence that we re pay senior bond holders I think the situation is best viewed through quite cynical eyes. Our European “partners” were well aware of and implicitly supported that policy.”

EXPLICITY, rather: Jorg Asmussen: ” … the main reasoning was to ensure that no negative spillover effects would be created to other Irish banks or to banks in other European countries.” (My italics.) This is the first admission by an ECB official that the protection of the European senior bank debt market was the ECB’s objective in requiring a country entering an IMF programme to pay unguaranteed bondholders in a bust bank.’ – http://www.independent.ie/opinion/analysis/colm-mccarthy-irelands-grievance-over-ecb-tactics-is-totally-justified-3081122.html

As for doubts about whether or not Ireland has been treated ‘woth hostility’, if a party takes actions in it’s own interest without regard for the effect they will have on another party, and that second party receive damage or injury from that action, it might be called hostility, or you might call it ‘collateral damage’, as did the IRA.
Apart from the unguaranteed bonds issue being the result of directives from the ECB, I don’t doubt that the entire guarantee to begin with was mandated by them.

‘Economist Colm McCarthy has said that there are “widespread suspicions” that the European Central Bank fostered a run on Irish banks to force the last Government to seek a bailout from the EU-IMF…..Jorg Asmussen, told BBC Radio 4: “It was made very clear to the Irish Finance Minister that it was not just about Ireland. The functioning of the currency union was at stake.”
….”A systemic run on Irish banks was the cause of the November crisis and that it probably resulted from public musings by ECB members on the need to curtail liquidity support to banks.”

The euro was designed to centralise control in the absence of public support for a political union. Their own policies created the systemic weakness that the Irish banking debacle posed for them, and they have persistently since tried to make hay from the crisis.

It is interesting to see the remarks above to the effect that Ireland or any other sovereign would be better off surrendering direct control over it’s own affairs to a perceived superior power, especially in this context. The exhibitors of these views, doubtless, are aware of how out of step with established and credited consensus they are; but try to tarnish this consensus with the vague-but-loaded accusation of ‘nationalism’.
I don’t think some quarters have exited the mindset and justifications that were contemporary with the Scramble for Africa, and ‘White Man’s Burden’.

Minister for Europe ? A far too ignoble post for a talented woman with such a refreshing and modest attitude. I’d never pair her with Lucinda Cretin…

@ Overseas commentator

+ 1

That really needed to be said outside the bubble of the Irish commentariat.

P.S. You could add a few more categories to your list, including senior staff in Irish universities.

I realise this is an awful party killer, but surely given the scale of Ireland’s own challenges only fleeting moments can be devoted to Greece, Spain, Italy, etc.

Rabbitte’s reported admission that the government has no plan can hardly be a surprise to anyone with two cents in the economy. No doubt he will invoke ‘retractor’ Bruton’s strategy to extract himself from the hullabaloo.

However, the facts are that on SME credit, lease law, personal insolvency, jobs initiatives, public sector reforms, political reforms, pay caps, spending controls, and so on, the government appears to be rudderless. There is still no effort at a workfare program despite the scale of unemployment.

Whether Greece stays in or out of the euro will still leave these problems on Irish plates.

And while Noonan is sneering at Greek cheese export potential he might ask for a breakdown on the imports of Brazilian beef into Ireland. The figures are not something many with their green jerseys flapping in the wind will boast about.

re- O.S. Commentator: ”This is a perfect demonstration of a paranoid tendency of many Irishmen . I have never met anybody outside of England with negative feelings toward Irishmen .Ireland has been one of the great beneficiaries of European unification ,in return the partners got the “no” to a previous referendum and the predatory corporate tax rate.”

– Do you really think that he (C.Mac C.) meant a nationality-based prejudice ?
Have a look at Mr. McCarthy’s articles in the links in my above post – he mightn’t agree with the gist of the setting in which I’ve placed them, but even his more moderate views come to damning conclusions about the ECB.

As for unification – it is a fact that at every public debate on Ireland’s role in Europe the extemt of the push for unification and even the very existence of such a political ambition was officially denied. The implications of a common currency were never expicit for voters; whereas in europe at least it was openly spoken about & thus to some extent understood. No doubt foolishly, the average voter bought the line sold by the four political parties that then controlled over 90% of the political landscape, and peddled by RTE, that the common currency was about making things convenient for holidaymakers. The EEC/EC/EU was always the benign giver. But any complicity on the part of the Irish stops there – the Nice & Lisbon referendums were when people grew uneasy, realising that it was in fact about removing competences rather than creating a sytem for cooperation.
And the last four years speak for themselves.


He distanced himself from SF’s use of his words, so I infer no support for any of the above, but those pieces tell their own story.

And as for the ‘predatory tax rate’, internal predatory competition, Yes; external predatory competition, No ?

Oh Lucinda Lucinda Lucinda

“Its not going to happen”

ESM Treaty
Article 9
1.The Board of Governors (immune from all sanction & Investigation) may call in authorised unpaid capital at any time and set an appropriate period of time for its payment by the ESM members.

@ Overseas commentator: you’ve hit the nail on the head. The only way to start to reduce the drag on the Irish economy by the sheltered class is devaluation.

@ Colm B: Agree with you comments, we need to negotiate our way out of the euro ASAP, before it tears itself apart.

The American CofC (and many others) are arguing for Ireland to stay in the euro for ‘stability’ – but the situation for the last 4 years and probably the next 4 years could hardly be more unstable.

Ireland received a huge amount of FDI before the euro and it will do so again after we pull out. Let’s get out of the euro, get stability, watch this economy grow again at +4% and seriously reduce unemployment. It happened in the 90’s, it can happen again.

@ Mark

“The implications of a common currency were never expicit for voters; whereas in europe at least it was openly spoken about & thus to some extent understood. No doubt foolishly, the average voter bought the line sold by the four political parties that then controlled over 90% of the political landscape, and peddled by RTE, that the common currency was about making things convenient for holidaymakers”.

Who in Europe is to blame for this?

Sunday Times has a feature on financial historian Niall Ferguson who thinks Britain could leave the euro.”Now we’re at the moment of truth when you can no longer maintain the fiction that a monetary union can exist independently of a fiscal union.”

And the other option? “On the other hand – and this is the message to Angela Merkel – to use George Bush’s phrase: this sucker’s going down. We’ve reached that point.”

He writes of tax harmonisation “won’t be appealing to Ireland” and support for federalism increasing with disillusionment with domestic politics. For Ferguson even the failure of the euro project was to be used to bolster the Federalist model and pressure for it from the ‘elite’ behind it coupled with the democratic deficit at the heart of the euro is compelling.

Ferguson’s analysis is flawed in that no such Federal model has been put on the table. There are hints in the FC that this is on the way; but nothing as yet has been proposed on a political and economic level from a Federal point of view that will fix the problem of currency meltdown.

For that reason, I’m sticking to the certainty, in spite of the Bush association with this phrase,’ this sucker’s going down ‘.

– I’m sure they would have happily done without us. But if at any point it had been honestly put forth that the treaties were the architecture for a fiscal & political union the average 2/3 support in Ireland would have at least inverted.
There seems to be growing pressure to proscribe self-determination as a position. But even those in favour of integrationsurely recognise that all the cards should, even now, and with the possibility of an orderly withdrawal, be laid on the table ?
And though Europe wasn’t involved in the particulars I mentioned that you have queried, they have had to operate ex-mandate across europe for a number of years, in the face of the majority who want integration to proceed no further.

@ Mark

All very well. But you do not answer my question.

I find this pursuit of scapegoats in Europe for our own faulty decisions to be not a very productive exercise. The assumption appears to be that the other parties in a negotiation must be nice to us because we are worth it. We are no more worth it than any other participant. The only sanction that we have to hand is if another party behaves illegally. We can then go to the European Court of Justice and argue our case. What we have instead are various claims – the extent to which these are well-founded being a matter of opinion – about this coupled with fulminations about the unfairness of it all.

To quote Frankie Howard “infamy, infamy! They all have it in for me”.

It is beginning to border on the ridiculous.

@ Overseas commentator

While the high income for particular sectors is correct, the official average GDP per capita is really a hoax.

In that distant year of 2001, commercial economists jostled to kiss the hemline of the cloak of the new Moses, Charlie McCreevy, finance minister, who had apparently achieved what had been denied the original – – the sheep had actually been led into the Promised Land.

The ECB and the European Commission dared to query the level of tax cuts in McCreevy’s budget but the elite including the trade unions, told them where to get off.

Months later, when the OECD said Ireland’s social partnership needed to evolve towards setting general principles and guiding pay determination rather than committing the Government to delivering specific tax cuts, the then incoming ICTU president and head of a teachers’ union, Joe O’Toole, criticised “academic bean counters” and said they speak from Paris “with an air of authority that is utterly undeserved,” when different governments and groups were queuing up to find out how we earned our economic success.

It was a dangerous time because the poltroons and their supporting players were falling for their own propaganda

Crucially, an MRBI opinion poll in the Irish Times showed that more than seven out of ten voters believed the 2001 Budget was good for the country.

The poll, the first since the Budget, showed a significant increase in the popularity of the Government and a big rise in satisfaction with the coalition leaders. Some 58% were satisfied with the Government’s performance, up 15 points since September 2000.

Where was the outrage? Where was the auld victims’ cross hidden?


The problem exists in people being asked to make decisions or support decisions made on their behalf when either the full complement of facts pertinent to it or an honest expsoition of the reasons/motives behind it.
Placing culpability on a country for the decisions of the leaders it elected is, at best, debatable. It has ne’er a leg to stand on the the adjudicators on the matter were the same party that were constraining or ordering these elected rep.s to achieve results in their own interest.
It is not credible that the guarantee would have had the breadth it did if FF were acting freely. That extent, at the very least, of the claims is undeniable.

add ‘is absent’ to the end of that 1st paragraph.
And correct ‘exposition’.

Elsewhere, the Táinaiste has said the need for a 2nd bailout is linked with the referendum result.
(I take it we probably agree on at least one of the things that’s wrong with Ireland.)

“Placing culpability on a country for the decisions of the leaders it elected is, at best, debatable.”
“Culpability of a country ” is a strange concept ,but the fact that citizens have to pay for the consequences of the bad decisions of their duly elected government ,as well as reap the rewards of the good ones is the basis of democratic government . What alternative do you propose?

@docm, mark

docm’s point along with MH’s is basically correct. One of the key lessons of the credit crunch was that “dissenters” are valuable in the analytical framework. There is also research showing that being a dissenter from groupthink is physically as well as psychologically damaging. It is obviously not career enhancing in most situations. Most people are not capable of acting as dissenters.

There were dissenters, they were basically all ignored or worse. The general public did not want to know anything that conflicted with the official line. There are way too many people in Ireland going about as if they are totally innocent in the Irish economic mess just because they didn’t deliberately campaign for or knowingly vote for a reckless economic punt (pun intended).

The lesson about the value of dissent has been forgotten so quickly even I have been surprised.

Just have a think about Pat Rabbite’s alleged gaffe in admitting an a grown-up andnon-retail environment, that the government is confused about what it should be doing. The fact that that cannot be said, and yet most contributors here know it to be true, evidences the futility of expecting any dialogue or debate by decision makers with outsiders that rises above defensive, department written lines and spin and waffle to manipulate the great unwashed.

The system works adequately in terms of popularity and at the end of the day “the public gets what the public wants”.

OS Commentator -Democratic model ? It’s the best one at the moment.
[a]It could be improved no end by restricting the exercise of unmandated decision-making, and increasing transparency.

[b]Coversely, it degenerates when punitive consequences of decisions taken wholly at odds with the mandate & well-being of the electorate.

[c]It becomes a tragedy when the solution proposed for such an outcome is to cede powers to a body whose influence was in large part the cause of the elected rep.s to depart from representative mandate.
(I don’t by any means deny our native, homegrown vices; but these are a seperate issue, and as I said, could be dealt with best by [a]).

I see it is more farcical than I thought. Sunday times reports that Ruadhri had to withdraw remarks he made during the week that David Begg’s remarks on postponement of ratification deserved consideration. Gilmore said the opposite?

Collective responsibility me a**e.

Give a man a tax-break, he’ll say yes. Show him how the cost of a tax break is inextricably linked to his own financial self to the extent that they are one and the same, he might wish to have a fuller comprehension of the implications, at least I believe so.

There were plenty of dissenters during the ‘boom’, as far as I remember; nothwithstanding MH’s polls, above.
I and many I know were disgusted at the orgy of building, had non-xenophobic concerns about the sustainabiltiy of the immigration rate, had deep concerns about the widening gap between the rich & poor, had worries about what looked like the emergence of a proto-class system, ie; a ‘property-portfolio’ class and another, larger, that was increasingly being priced out of the market for even basic homes.

The problems with unions and politicians – though I certainly am not anti-union – is that when power is concentrated in small areas, it is easier to conceal things, and far easier to subvert. The same applies to any vested interest group, upper echelon PS, IBEC lobbyist, CIF, or any other you care to name.

Yes Mark, but nothing is changing – nor will it, as long as the readies can be sourced to prevent obvious conclusions being reached and acted upon.

A change of government in Ireland resembles a change of occupants on a merry-go-round. It is little more than a few different people having a turn.

@Michael Hennigan
I found your comments about the 2000-2004 government fascinating but I am afraid that the absolute refusal of the present government to do any structural reform even with the prodding of the Troîka , will be an object of scorn ten years from now ,yet neither the press, nor the general public seem to be particularly upset by it.
For example the law on mortgages and the law on personal bankruptcy have dire consequences and create unneeded sufferings for thousands of Irishmen ,nothing is done and very few people march against them.
The upward only commercial rent law is both morally reprehensible and economically absurd. It is also a law against entrepreneurship and in favor of monopolists ,exactly the opposite of what is needed right now .Mr Rabitte is wrong :there is a program ,it is: “don’t rock the boat”.
I am afraid the new French government will act just the same.

@ finfacts

“falling for their own propaganda” interesting point. There were few who withstood the propaganda, as you point out. Apparently, we also had many academic poltroons in Ireland, who fell for the same propaganda and became believers, the ‘soft landers’. Perhaps economists from abroad not exposed to this on a local scale had much greater objectivity. Propaganda in Ireland is worth a lot more self examination.

@ All

Turning back to matters more serious than the perennial Irish sense of grievance, Gavyn Davies cuts to the chase in his FT blog.


Note, in particular, his reference to the role of banks as being in the business of “maturity trasnformation” which is now the business the countries of most Western developed economies are also involved in given the level of their borrrowings i.e. the amount of bonds (IOU’s) they have placed on the market and are continuously rolling over.


The bottom line in Ireland is a cultural reluctance to recognise conflict of interest and act accordingly.

One after another, tribunal reports have listed out conflicts that twisted and corrupted the public interest. Governments have embraced their recommendations with the agility and enthusiasm of tortoises embarking on a triathlon.

Despite all the talk about accountability, it still means accountability downwards. This week the HIQUA published a report which should raise very serious questions about financial management. It seems to have been a one day wonder and coverage of it has disappeared. No doubt the various ministers are awaiting more reports on that report before passing it all over to a committee to produce a draft report that in turn will be lobbed to another inter departmental committee for deep freezing.

The priority for Ireland in this crisis should be to get its own polity in order but the opposite appears to be the Official preference.

It isn’t only Greece that is dysfunctional.

Good article by Davies, but here’s the problem:

“Last week, the city of Philadelphia’s school system announced that it expects to close 40 public schools next year, and 64 schools by 2017. The school district expects to lose 40% of its current enrollment, and thousands of experienced, qualified teachers.”


The global banking system has run amok. The amount of debt issued simply cannot be repaid. Austerity from Greece, to Ireland to Philadelphia, is dismantling democracy.

One of the lessons to be learned is to take away the unfettered regulations governing banks and lending institutions and regulate rules governing transactions in banking and financial markets. We should take back control of the banks from private hands and create banks dedicated to public banking at affordable interest rates.

Consider a public bank in Ireland pooling resources from its depositors and not required to borrow on bond markets for its funding at rates of 6% + , owned by the government, and able to lend at 2-3% on a virtual non profit basis?

Do we really need a remote bank, the ESM/ECB, with its own institution above the law running this country?

Its calculated 40% of all debt issued goes back into the private hands of the banking system. Across the world, there are many examples of public banks both in the US and especially in the Bric countries who escaped derivatives and did not get involved in financial paper currently taking the banking system under water.

The solution that more must be thrown into the bin of the euro banking system in order to save the euro is just adding more fuel to the fire. More must be done to put out the fire in Ireland, in the EMU, and at G8 level. Whatever is to be done though, its too late to save the euro.

We do need a good Plan B for post euro. We don’t need a system of permanent debt maturity recycling tapping into the lifeblood of economic growth and austerity in Europe. ITs time to defeat the dragon 🙂

Overseas Commentator,
Were not UOR clauses not outlawed for new leases in 2/2010? There is obviously a problem with existing leases but anecdotally there seems to be a good deal of negotiation on this issue with landlord/tenants. I am told by a landlord who has leased a building to a US MNC for15 years that he never had a UOR clause becuase the American firm insisted it be excised. In addition, I have been told by an institutional investor that anything goes now in negotiations. Some degree of competancy and willingness on both sides is required though.
As regards mortgages and insolvency a bill is in preparation. According to recent reports in the Sunday Times that IMF seems to have some issues with the bill. They are pointing at the relationship between arrears and unemployment in Ireland relative to Spain-ours are much higher-impying a degree of strategic defualt here perhaps/allegedly. The IMF wants to minimse the chances that it does not get its money back.

Minister Rabbite did nothing but speak the truth. All plans now are worthless and incredible becuase events are moving too fast. We are coming towards the end game which a former poster here -Simpleton-identified three years ago. It either ends in mass default by the periphery and the break up of the Euro (EU?) which would cause a global recession or Germany underwrites a combination of fiscal transfers and or QE.

From my point of view default brings mayhem and a possibility of much more painful structural reform. That is why I will be voting No.


n the 15th November 2011 the Grafton Street tenants notified the Directorate-General for Competition of the European Union(ref no.2011/121371) and the Irish government,of a cartel in the Irish commercial property market.
This cartel had imposed on all Irish commercial tenants,the most anti-tenant commercial lease law in the world i.e.upward-only rent reviews(UORRs) tied to long leases. Tenants bought into these leases which implied commercial rents would be set by independent parties. This process was arbitrary,not capable of objective justification,did not comply with data protection laws and was clearly anti-competitive as organised by a cartel. Our government either colluded with the cartel or was criminally negligent by signing these ruinous leases,and wasting its citizens money. No other member country of the eurozone tolerates this ruinous lease law. Reckless Irish banks lent tens of billions against these ruinous leases not against the properties. In 2008 Grafton Street became the fifth highest rented street in the world. On 28th February 2010 the Fianna Fail led government banned this ruinous UORRs lease clause in all future commercial leases. The tenants continued to lobby TDs to reform this feudal lease law in legacy commercial leases. In the general election of 2011 both Fine Gael and Labour included the reform of existing UORRs leases in its’ election manifestos. In it’s program for government the new government pledged “We will pass legislation to ban upward-only rent reviews in existing commercial leases”. This reform was designed to stop the unnecessary destruction of thousands of sustainable Irish retail businesses and jobs. The Irish people had spoken, democracy had triumphed.

The cartel responded immediately and began to mobilise the oligarchs. Ireland First and Property Industry Ireland(PII),aka the Fine Gael Landlords Association,were the cartel lobbyists,among others,to ensure this reform would never be implemented. PII was established in June 2011 and many of it’s directors were Fine Gael grandees and large party donors including a former Fine Gael Taoiseach’s son Mark Fitzgerald MD of Sherry Fitzgerald auctioneers a cheerleader of the property bubble,and the Cork based developer Michael O’Flynn. Kieran McGowan Chairman PII and David Went Chairman of the Irish Times,who together had presided over the bankrupting of Irish Life and Permanent Plc,agreed that the Irish Times would arrange the propaganda. The income from property advertising is a very significent part of it’s business model. The property editor Jack Fagan organised Bill Nowlan(W.K.Nowlan and Associates),Ann Hargaden(Lisney),Duncan Lyster(Lisney),Pat McArdle(economist) and CBRE, half page opinion pieces every wednesday. These were the cartel’s mouthpieces. Nowlan referred to the over-rented tenants as chancers and made the Zimbabwe,Banana Republic,Armageddon comparisions.

In July,Deputy Ciaran Lynch(Labour) began leaking proposed legislation to the Sunday Times,outlining the complexities of qualifying tenants,qualifying landlords,sunset clauses,landlords compensation,tenants compensation,receivership light etc. The u-turn was underway. The Grafton Street tenants met Minister Shatter on the 27th July. This meeting was designed to deaden expectations and prepare tenants for the u-turn. My response to this devastating meeting was to hang a banner on our Grafton Street store to remind Fine Gael of their election manifesto’s solemn pledge. The government and the cartel agreed on the spin,it was to blame Nama and the Department of Finance. The cartel was spinning the name of a specific DoF official who was to be the patsy. It was agreed budget day would be the least bad day to make the announcement. Minister Noonan mentioned landlords compensation to get Minister Shatter off the hook. Gerard Hogan SC had dealt with this point in his legal opinion,landlords were entitled to market rents,but not to compensation. In May 2011 Minister Shatter had stated to the Irish and international media there was an emergency job crisis and under article 43.2.2 of the constitution,in the “exigencies of the common good”, banning UORRs in existing commercial leases was vital. Furthermore Minister Shatter stated it wouldn’t effect Nama’s valuations. He had a copy of the esteemed senior counsel Gerard Hogan’s opinion and Colm McCarthy’s report to support this position. Democracy was overturned,the cartel had triumphed.

John Corcoran
M.Sc. Economics London School of Economics and Political Science

John Corcoran Says:
March 4th, 2012 at 11:58 am
Comrade Gilmore delivered the decision and destroyed tens of thousands of sustainable Irish businesses and jobs.
The cartel, the oligarchs and their media facilitators were well pleased.

Back from the Heineken cup – ha ha ha ha ha 🙂 God my head hurts 🙁

@John Foody

“Did you hear any banks saying ‘don’t socialize our debts”

Er, no.

Anyway, I don’t see how the weaker EZ countries can help Greece – nobody in the core pays any attention to what smaller/weaker countries EZ countries think or say and that ain’t going to change any time soon.

Pay up and shut up Paddy. You’re just there to be siphon taxpayer money from.


“Mr Rabbitte is said to have stated that the Government has been pre-occupied with challenges as they arise and has not managed to construct a strategy for recovery in the medium to long term.
Mr Rabbitte asked that his remarks, which were made at a luncheon attended by figures drawn primarily from the energy sector, not be repeated outside of the meeting.’”

They paid for a lunch to find out the government has no strategy? My 5 year old could have told them and saved them the dosh.


“Time to catch up with events!”

I will when I can find some brain cells that weren’t destroyed over the weekend.


La garantie bancaire de l’histoire moins cher …..

Not sure if my French has captured that neatly enough but I’m sure you get my drift.


re: Bank runs and “Time to catch up with events!”

Interesting that the ECB appears to be supporting the Italian deposit guarantee plan. My understanding of the Italian plan is that it is a guarantee underwritten jointly by all EZ states? I doubt that will be acceptable to the States. The States range from those like Ireland that have already paid a kings ransom to others, Finland perhaps, that has no banking problems.

IMHO it is the ECB who should have been running with such a plan about three years ago and underwriting it with a formidable bank resolution scheme and printing any uncovered deficit. It is not rocket science.
One way or the other deposits will have to be guaranteed including those of Greece, in euros. Otherwise chaos beckons.
The funny think is that an EZ wide bank run was very predictable and easily preventable. But there is no doubt that it has started.

@ Joseph Ryan & PR Guy

I would not hold out much hope either. But what is the alternative? One assumes that only retail deposits would be guaranteed and, as far as I understand the present situation, there is already agreed legislation on coordinated national levels of guarantee.

Incidentally, the ECB has no powers of initiative beyond its precise legal mandate as set out in the treaties. That right of initiative lies with the Commission. The latter is, belatedly, moving but only as the facts and the political wind change. “Initiative” is too strong a word in such circumstances.

One would wish that the respective competences were more widely recognised and the ire of some commentators delivered to the right address.

@ All

An interesting presentation by Professor Adalbert Winkler demolishing (one more time) the thesis of Sinn in relation to Target 2 balances but, even for the layman, also demonstrating the fundamental political choices with which Merkel is now confronted. A guarantee of retail deposits might be the level of action needed to stop an incipient bank run (the situation as described by Davies and Munchau) and less expensive than coping with a full blown crisis. However, Merkel’s track record to date is of “too little, too late”.

There are also press reports that Hollande is blocking the appointment of Schaeuble to replace Juncker as chairman of the Euro Group (unless he takes it on as a fulltime appointment i.e. leave his post as German finance minister).


@ Colm B

“Sunday Times has a feature on financial historian Niall Ferguson who thinks Britain could leave the euro.”Now we’re at the moment of truth when you can no longer maintain the fiction that a monetary union can exist independently of a fiscal union.”



Yes, the EU has a retail deposit protection regime under which €100K is covered.Each country is supposed to levy its banks and run a fund which could finance claims.In turn the various countries are supposed to cross-support each other but there is no detail whatsoever on this.The reality is that in Ireland whatever fund there is (the Regulator would not disclose it when asked) wouldn’t cover 10% of the claims if AIB or BOI went under and no help would come from the schemes in the other member states.

@John Corcoran

“In May 2011 Minister Shatter had stated to the Irish and international media there was an emergency job crisis and under article 43.2.2 of the constitution,in the “exigencies of the common good”, banning UORRs in existing commercial leases was vital.”

Do you realise that after the constitutional amendment is passed your new campaign will be no longer have to rely on 43.2.2 to trump landlords’ property rights. All that will be required is for the minister to be able to argue that the retrospective banning of upward only rent reviews is “necessitated” by one of the “obligations” of the Fiscal Compact. If it can be argued that UORRs are holding back GDP and therefore debt/GDP targets are affected then the landlords can forget about the constitution.

Of course the convenient argument will be that the 20% fall in commercial property then expected (that obviously would not just happen anyway otherwise but more slowly) would require a further bank bailout which would affect debt/gdp ratios…..

Of course confiscation of part of your pension fund could only benefit debt/gdp, so maybe they will eventually just do that.

Worth remembering that John McHale is Chairman of the Irish Fiscal Advisory Council…

This is where the weaker countries could play an important role. They could do so by making it clear that they see no interest in seeking relief through default or in a relaxation of formal/informal commitments, regardless of any additional accommodations for Greece….

….Greece has got itself into a mess, much of it of its own making.

and last but not least

Solidarity – but most of all self interest – should lead all euro zone countries to work hard at finding a workable way out.

No comment required!

Fetagate update:

The Irish finance minister apparently thinks the a Bloomberg audience is unlikely to know much about the EZ programme countries. He had to dumb things down for them big-time is his current line…and Papandreou isn’t exactly bright either…

“MINISTER FOR Finance Michael Noonan has robustly defended his “feta cheese” remark about trade with Greece, which was described by former Greek prime minister George Papandreou as “simplistic” and “flippant”.

Speaking at a Bloomberg conference last week, Mr Noonan suggested Irish consumers putting feta cheese into their shopping baskets was the extent of trade with Greece. He asked: “If you go into the shops here when you’re doing your weekly shopping, apart from feta cheese, how many Greek items do you put in your basket?”

Yesterday, Mr Noonan said international listeners to the online broadcast of the conference might not have understood the Irish position and tended to put International Monetary Fund programme states such as Greece, Ireland and Portugal “in the one box”.

In answer to a question on whether contagion would spread from Greece to Ireland, he sought to stress there was little economic, trade or banking connections between the two states. “I could have done that by running a bunch of statistics, but I thought it was better communication to refer to the basket,” he told RTÉ Radio One’s This Week programme.

Asked whether he agreed the remarks could be construed as “flippant” and “simplistic”, Mr Noonan said: “If that was the way RTÉ briefed Mr Papandreou, he would have got that position.” Mr Papandreou had not understood the context in which he was speaking, he said.”


At least he didn’t come out with “G-Pap just didn’t get it , and thats why he got cheesed off”

Doesn’t seem too much interest among the weaker countries in what they can do for Greece does there.

Interesting how early Ireland’s central bank governor was to state a Greek exit from the Euro would be manageable.

Now this:


“IRELAND AND Portugal have attacked Greece for “stoking up the fire” in the euro zone with its consistent failure to adhere to austerity measures.

Minister for Finance Michael Noonan and his Portuguese counterpart Vitor Gaspar attacked Greece at last week’s Eurogroup meeting, according to Der Spiegel. They said it was “unacceptable” that they made huge efforts to fulfil budget programmes while Greece “unerringly breaks its reform commitments”. Other ministers agreed, the magazine reported, saying Greek “negligence” was “stoking up again and again the fire of contagion”.

Eurogroup chairman Jean-Claude Juncker told the meeting: “If we had a secret ballot over keeping Greece in the euro zone, a huge majority would be against.”

A senior European official confirmed the Spiegel report yesterday, saying Irish and Portuguese criticism of Greece was “factually correct. When Juncker opened the meeting, there was a long 30 seconds of silence, but once [Ireland and Portugal] got stuck in, they all gave it hot and heavy to the Greeks.””


Doesn’t seem too much interest among the weaker countries in what they can do for Greece does there.

First they came for the Greeks and not only did we not say anything- we joined in…

It seems cravenly folding before Germany and the ECB and representing their interests in Ireland was not debasing enough for the Irish establishment, now we are to do their bidding in international affairs.

Our government has managed a rare combination of spinelessness, comforted by the portion of the media, European establishment and financial sector with an autocratic and right wing bent. Horrifying as an example of moral failure and depressingly familiar as an example of group think.

@John McHale on how Ireland and the other PISIs can show leadership to by promising to do whatever they are told to…..

They could do so by making it clear that they see no interest in seeking relief through default or in a relaxation of formal/informal commitments, regardless of any additional accommodations for Greece.

So in addition to the restrictions Ireland would be accepting by signing the Fiscal Compact you are suggesting that we make a further commitment not to oppose Germany or ECB wishes at any point in the future in the way that we approach the costs we have already incurred due to the European component of the global financial crisis? Even for informal commitments?

You seem to have an extraordinary commitment to central European political and economic orthodoxy at a time when its stock has never been lower internationally and its effects in Europe (outside of Germany) are known to be massively negative.

We all know that if the Fiscal Compact is passed and the Merkel government feels empowered to continue its intransigence then we will require a second bailout as the link between sovereigns and the broken financial sector is cemented and domestic demand continues to slump. We can not afford to be as submissive as we have been up to nwow, let alone promise to continue being so in order that Greece receives the rescue it should have three years ago.

I know that searching for an influential Irish economist who is not ideologically on the centre right to extreme right of the political spectrum would be no easy feat but given that Irish state interests are now at odds of those of the right in Europe I would be more comfortable if the FAC had at least one such voice who spoke publicly.


So we have become the new Bootboy for the EZ powers.
Was this a government decision or was is our Munster hero? Where is Foreign Affairs in all this?

I suggest the best thing Ireland could do is stop paying Paddy Nearys pension.

Why on earth would the Irish govt seek common cause with a near failed state. If they want to support a different policy support the French. The Greeks are finding they have no allies apart from Russia, Iran and Venezuela.


“”When Juncker opened the meeting, there was a long 30 seconds of silence, but once [Ireland and Portugal] got stuck in, they all gave it hot and heavy to the Greeks.””

There is difference between seeking ‘common cause’ with Greece and throwing the first stone.
Perhaps Ireland will get a brownie point. A little like the slave who administers the lashes on behalf of the ‘masser’.

Irelans actions, if the above is to be believed, were ill serving and reprehensible. In addition they were very poor politics. Ireland’s actions will be rightly seen for the shallow, mean, bootboy tactics that they were.
And when Ireland’s time comes as it looks likely to do, there will no point in crying foul, will there?

ESM is in essence a SPV with guarantees from multiple EU sovereigns. Therefore: directly injecting ESM money into banks will not in any shape or form untangle banks from sovereigns, the sovereigns will still be on the hook for losses. What it will do is to create a structure where many will be paid for (supposedly) accepting huge responsibilities but nobody will be responsible for anything. I do not see any benefits whatsoever in doing that.

Paying taxes is an act of solidarity. Low tax countries can ask for money transfers from high tax countries but any money transferred will be out of charity rather than solidarity.

The leadership in a few of the program-countries seem unable to lead their own countries, therefore I do not see it credible that they’ll be able to lead at an European level.

@Joseph Ryan

A little like the slave who administers the lashes on behalf of the ‘masser’.

I think that is not quite appropriate, the slave who refuses to wield the whip will be whipped too after all. Noonan is more like the runt of a gang of thugs taking his opportunity to deliver the first kick to someone they have knocked to the ground.

Slaves had little option but Minister Noonan is a bully of choice.

And when Ireland’s time comes as it looks likely to do, there will no point in crying foul, will there?

Our only comfort will be that we may have an opportunity to strip the collaborators of their status and pensions.

There is a referendum that will pass easily.

No, still can’t see why we lash ourselves to a Greek rock just as it goes over a cliff. Tsipras policy of no reform, tax the rich and blackmail the Germans is similar to the No campaign here. It is doomed to failure.

Even Cyprus is saying it is not Greece now.

I continue to marvel at the penchant for the Irish left to continue to back the wrong horse.


Precisely. The ESM simply institutionalises and legalises The Conflationist Fallacy – the opposite is what is required: breaking the link between Banks and Sovereigns ….

… but EU has not got to that yet; so looks like this is the strategy – a financial system take0ver of EU Democracy. Slow learners around here ..

… Hope Thomas Pringle gets his Referendum ….


I continue to marvel at the penchant for the Irish left to continue to back the wrong horse.

While the right remains focussed on winning a race to the bottom.

The lefty lad in Greece is going to lead his people to the point where they are going to envy N Korea.


“Paying taxes is an act of solidarity.”

That is what it is and should be. It might be the case in Northern Europe, but it cetainly is not on these islands or among the members of Club Med – though there is no shortage of people keen to pillage the proceeds of what ever taxation is levied – and paid.

This is a key aspect of the fundamental split in governance that is geographically defined by a line that starts in the North Sea, runs through France and continues eastwards through Italy as far as Hungary.


“I continue to marvel at the penchant for the Irish left to continue to back the wrong horse.”

As Abba Eban once said of the Palestinians “They never miss an opportunity to miss an opportunity”. Even the Israelis have succumbed to this type of failing in the last two decades. So what hope has the Irish left?

@Paul Hunt

As Abba Eban once said of the Palestinians “They never miss an opportunity to miss an opportunity”.

This right wing dog whistle goes out to all the closet colonialists in the EU’s neoliberal caucus.

….. and When, yes WHEN, the Oirish Banks require further re_er_re-capitalisation … and if, and more probably when, it is sourced from the ESM, well guess who guarantees the dosh for the banks? Yes folks, The Oirish Sovereign is on the hook again ….. The Conflationis Fallacy still reigns supreme … for the mo ….

Methinks Spain will blow this strategy out of the water ………

@Greek Citizenry

The principle of solidarity still holds … notwithstanding a few of the local Colonels around here and elsewhere ….

I see now I should have paraphrased Abba Eban along the lines of “never miss an opportunity to fling abuse at those who share an antipathy towards the Neocons and their ilk, but who seek to build a liberal-centre plurality to defeat them – rather than carping from the wilder fringes.”

PH- running dog.
As ever, you overstate the probity of the North. Look up how many German banks are domiciled in Luxembourg. Also consider why we get tarred as a tax dumper but Lux never does. It is more than Belgian Dentists. Some German ministers also have had to explain large sums resting in their a/CS-some are still in office. Our lads are reasonably clean but no one here believes that.
Still the Abba Eban quote is good.

Drat… Meant German banks with branches in Lux.

Still a Naysayer…never waste a crisis

@grumpy 12:22

“Greece is has a deeply corrupt and inefficient state sector and, consistent with that, it has a culture of accepted tax avoidance and evasion.”

You could have said “Ireland and Greece…….”
The fact that such behaviour is perfectly acceptable in Ireland as in Greece does not make it right. We tend to wear our green lenses when looking at Ireland and clear lenses when looking at Greece.

@John Mahoney

“I wonder if it would be best for Ireland to abandon the Euro and the permanent crisis attached to it, and take up the pound sterling again. Is there any case against that? I can’t see one.”

Down here in Kerry memories are long lived. If Ireland enters a monetary union with England The Kingdom of Kerry will secede and rejoin the EZ. You should read the Annals of Kerry and take a stroll through a few Kerry graveyards.


Running dog, indeed. It’s probably just as well I can only bark from here, but can’t bite.

The relative morality stuff doesn’t wash. All power corrupts..etc. It’s a continuous struggle to ensure the election of the least currupt who might exercise power in a way that does least damage to the public interest – and to keep throwing the bums out when, inevitably, they fall short. They’ll never learn, but, with a bit of voter vigilance, information and transparency, they might learn enough not to screw things up big time.

The people here last year disposed of a shower who did just that – and by default elected a shower who seem arrogant, clueless and complacent all at the same time. Voters in the creditors countries have politicians that are probably equally arrogant, clueless and complacent, but, having been misled about the nature of this Euro project, are enforcing a bit more democratic accountability on them. It’s making the resolution of the crisis more difficult, but it’ll make it more soundly based.

However, in Ireland, when anything of EU-related significance comes up the elected representatives are by-passed and there has to be a referendum. This has little to do with democracy; and nothing at all to do with securing informed democratic consent. Britain is retreating to the margins and politics in the US is almost totally dysfunctional.

So you might see why I’m running with whom I’m running.


You are running with a bunch of clowns who have taken the European project, flawed and all as it was and run it into the ditch. I am not talking about the transient pols but the permo govt at the heart of institutions like the ECB, the German CS etc.

Well governed me A***

Europe Raises Threat Level against Athens

Officially, euro zone governments say they’re not talking about a Greek exit from the euro zone. But it’s a different story behind closed doors. Finance ministers meeting in Brussels last Monday threatened to evict Greece, SPIEGEL has learned. Meanwhile, Germany denied reports that Chancellor Angela Merkel called for Greece to hold a referendum on the euro.

Despite official claims to the contrary, the governments of the euro zone are threatening to kick Greece out of the currency union. At a meeting of euro-zone finance ministers last Monday in Brussels, it was made clear to Greek Finance Minister Filippos Sachinidis just how serious the situation had become.

“If we now held a secret vote about Greece staying in the euro zone,” Euro Group Chairman Jean-Claude Juncker warned his Greek colleague, “there would be an overwhelming majority against it.” Other participants in the meeting also had harsh words for Sachinidis, with particularly strong criticism towards Athens coming from Portugal and Ireland, countries that have also accepted bailouts in the crisis.



From his point of view MN is correct. The Greek latest strategy of no reform & blackmail threatens a spiral of defaults in the rest of the periphery and the resultant necessity to rip up the social contract- think halving SW.

The deluded Irish left clearly think this is to be welcomed.

@Colonel Tull

Only halving! – you goin soft?

Not to worry – you have the RRA (Ranting Roight Anonymous) of the month for May in the bag. PaddyPower.com has already paid out at 1/13 on. Lookin forward to your comin out party on June 1 – after the 6 o’clock in Merrion Square we will give you a truly splendid ultra PD wake – Mick McPD still has a few of those cases of Red Red Wine that he picked up from .. er .. or fell off the back of … er Dinny O’B’s refrigerated truck – but rest assured, your ghost will live on anonymously on the blog.

@Must Read

A pathway to sound economic thinking
Robert A. Johnson, Executive Director, Institute for New Economic Thinking (INET)

Our flawed financial regulatory system contributes to bad policy choices in the real economy. The aversion to debt restructuring, in part because of the fear of unleashing a financial contagion in our opaque regulatory system, leads officials to resort to the dead-end policies of austerity. But austerity will not bring us out of this mess. You cannot cut your way to growth and solvency while in a slump. But the traditional Keynesian approaches of just spending money to get the economy back to full employment aren’t appropriate either, because in addition to stimulus you are incurring debt that will have to be serviced over the long term. Investment, even during times of demand shortfall, must still be chosen to enhance productivity. Otherwise the long-term debt burden will be unsustainable and crisis will merely be delayed. […]

The failure of these old approaches to financial structure and regulation, and dead-end approaches to debt and demand management speak to the need to create a more integrated and relevant economics that places real human beings and real institutions at its centre, not the narrowly defined, misleading, and simplistic abstractions, that are unconsciously embodied in the logic of mechanical finance. These visions of conventional wisdom, pretending to be scientifically valid, ignore the broader costs borne by humanity, and the pain is only revealed when it emerges as rage, violence, social uprising, and other reflections of the malfunction of our political economy.



Accusing Paul Hunt of imperialist dog whistles seems a little over the top. I’ve always found him pretty fair, particularly in comparison to some of the right wing whack jobs that hang around these pages. (And in the main posts as well, no less)

I can’t say I have much time for Paul or Michael H’s constant caricaturing of the left, but they’re honest and well informed and in comparison to the deluge of insane wingnut’s who hang out in these parts, particularly the main posts, a breath of fresh air.

Paul, though, your Palestinian comparison does you no favours. There was never an iota of good faith from the other side, so if you wanted to extend that to this situation, well…….

Anyway, I hope you don’t become too disillusioned, we need some sense on the right, if for no other reason than to prevent the lunatics taking over the asylum, again.

Also, this book might be of interest


On the substance of JMcH’s post above, I think that it is simply not clear what is in Greece’s best interests, so we should be slow to claim that positions Ireland takes are intended to help them. It seems to me that the underlying purpose of what John proposes is primarily selfish – to protect the rest of the eurozone from the fallout of a radical change in Greece, rather than to protect Greek interests.

As Kevin O’Rourke has rightly highlighted, current policies mean no hope for the Greek people. To the extent that our purpose is altruistic, we should not lay whatever small weight we have behind either a continuation of these policies or only incremental changes to them. We would be better focused on laying the groundwork for preserving Greek democracy, and for constructing a working Greek state, whatever the outcome of the next few months in terms of default and euro membership.

While I’m very sceptical that membership of the euro is actually in Greece’s best interests, a useful first step would be to puncture the illogical and pernicious notion that default and exit from the Programme would necessarily lead to exit from the euro.

I believe the solution to many of Ireland’s current economic problems is an exit from the euro and devaluation. Once Greece pulls out, it will be very difficult for Ireland to not follow. Let’s start planning for it now. A smooth exit is in everyone’s interest.

From today’s FT by Gideon Rachman:

It would be infinitely preferable if EU leaders were to make a rational assessment of which countries are willing and able to stay in the euro – and announce plans to work on an amicable and orderly divorce between the stayers and the goers. Only by acting in this way might they finally achieve their oft-stated goal of “getting ahead of events”. Almost all euro-users adopted the currency without a referendum, and they could leave the same way.

It is true that even a “velvet divorce” for the eurozone would involve enormous dangers. But at least it would offer a believable exit from the present maze. As a (very) German proverb puts it – “Better an end with horror, than a horror without end.

@David O’Donnell

“Why Greeks Will Vote for Tsipras”

H’mmmmmm… not convinced.

It’s quite possible that more will vote for him but I think ND and PASOK will also gain (at the expense of the other smaller parties). It could end up that ND and PASOK just manage to squeek a majority between them. Some supporters of smaller parties will go to him but others will think “OK I’ve made my protest vote but now I’m terrorised by what I’m hearing in this barrage of PR coming from all quarters – inside and outside of Greece – that I will go back to voting what I normally vote for and hope that keeps us in the Euro.”

There may be no sane logic in Greece staying in the Euro granted but that’s by the by – it’s what Greek people are being told is best for them (by the people who may have most to lose if there is an exit of a country from the Euro and the fallout from that etc. etc.) so that’s what they think they need to do.

Of course, if the right wing neo-Nazi nutters end up not getting any seats this time they will tear Athens apart because they were ‘denied democracy’….. which would be funny if it weren’t so serious.

@ PR Guy

the problem is that the lead party gets a 50 seat kicker (16% of all seats), right? Weird system. Syrizas and ND neck and neck in polls.


Not that weird. Well, perhaps weird but not unusual in its effects. The mechanics of our system of PR give an effective seat bonus to bigger parties, and the biggest party usually gets the biggest bonus, though it’s not as big as that in Greece. The UK’s first-past-the-post system is usually effective in giving the biggest party a large boost in seats. The US system makes most elections actual or effective two-horse races, making seat bonuses irrelevant to the ability to form a government or working majority.

The Greek system is only really weird by comparison with other list systems.

re: 8.21 Excellect Post, particularly:

“We would be better focused on laying the groundwork for preserving Greek democracy, and for constructing a working Greek state, whatever the outcome of the next few months in terms of default and euro membership. ”

Greek society is breaking down and dividing just like Germany did in the early 1930s.
And yet the focus is all pushing them over the cliff. A bit shortsighted I would say.


Thank you. Re Abba Eban quote, I thought I was being even handed. I mentioned that the Israelis have also succumbed to this folly over the last 2 decades. When the PLO changed its constitution they could have responded magnanimously to further isolate the extremists in the Palestinian camp.

And I’m not on the right. If there’s a requirement that I be pigeon-holed, I would much prefer the liberal centre. It’s the space that Keynes operated in, but it’s a space that has shrunk in Britain, is shrinking in Europe and hardly ever existed in Ireland. All the parties in our previous 2 and a 1/2 part system saw the state as the solution all problems – even if some of the men of property and position in FF and FG might have resisted the excessive encroachment of the state they quickly discovered how to leverage its inroads to their advancement. Only the PDs took a position that might be vaguely considered liberal-centre – and they swallowed quite a bit of the Neocons’ lunacies.

I’m aware of O’Malley’s and MacCarthaigh’s tome. It’s good, but doesn’t get us much beyond the academic seminar room.


We’ll probably have to agree to disagree, but this might be relevant:

Also in today’s FT, Jeremy J. Siegel argues for a euro devaluation of ~25% to relieve the pressure on the periphery and force some inflation in the center.

A good idea but I can’t see the Germans agreeing to it.


Accusing Paul Hunt of imperialist dog whistles seems a little over the top.

Perhaps so but it is a quote I find particularly objectionable and dishonest and my hackles rise as soon as I read it.

It reminds me immediately of Golda Meir’s quote ‘We can forgive you for killing our sons. But we will never forgive you for making us kill yours.’ in its creepy shifting of all agency and responsibility to their other party.

What if Merkel and the ECB bootboys had presented Europe with something hopeful and progressive rather than an “opportunity” to sign German neoliberalism into law and and socialize private financial sector losses?

The German conservatives and their ECB allies deserve the lions share of criticism for the failure to deal with European component of the global financial crisis.

@Bond Eoin Bond

“problem is that the lead party gets a 50 seat kicker (16% of all seats), right? Weird system. Syrizas and ND neck and neck in polls.”

Yes it is strange. That’s why I think that ND and PASOK may just squeek a small majority (with the aid of those additional 50 seats if ND can hold on to first place). Whether that can be done by fair means or foul has no doubt already been considered.

Meanwhile, the PR onslaught against the Greek voters continues:

“Wolfgang Schäuble, Germany’s finance minister, has delivered stark warnings to the Greeks in a newspaper interview with the Athens newspaper Kathimerini, urging them to think carefully before they vote again in just under a month’s time.” (HT Guardian)

They need to be careful that they don’t over-egg the pudding or it could backfire on them.

@ JMcH Your espousing of a pro (reinforced) europhile status quo at least seems to have raised the temperature of debate…..with the debate here becoming more orthodox left and right (each demonstrating greater extremism)….The social cracks in Ireland are becoming increasingly noticeable. Bravo.


My use of the Abba Eban quote obviously hit the mark because we’ve seen the classic left-wing tactic of deflecting attention from the accuracy of its use in describing the ineptitude of the Irish left by taking great umbrage at its original use.

The left in Ireland (in so far as many of those who crowd under that nebulous banner deserve that label) is riven in various ways and this is reflected in the posturing, shape-throwing and disingenuousness being played out on the fiscal compact. Labour in government has no option. Advocating a no vote would lead to an immediate general election – and because voters tend to look backwards when they vote and would take account of Labour’s behaviour in government, it would probably lead to a Labour rout. The ICTU’s position is interesting. It can justifiably claim that it can’t express a unanimous view, but it can’t advocate a no because that would almost certainly blow the bubble-era gains (and their finger-prints would be on the knife if a no majority emerged), but it’s too difficult to be honest and advocate a yes vote – so it looks like that thussue of the ESM link.

The less said about the no campaign on the left the better.

There is an opportunity now to re-define the role of the state in the modern era which the left could seize and secure broad popular support, but it can’t let go of some of its tattered and no longer useful ideological baggage.

After the next election Labour will probably have fewer than half its current seats. It almost always happens after a bout in government with Fine Gael. But they seem incapable of learning.

@Greek Citizenry

But the Keynesians can also draw on recent economic history to support their views. Austerity has failed to reduce debt as a proportion of GDP in every European nation in which it has been tried since 2008. More to the point, it has also—as Keynesian economists predicted—directly resulted in another recession in much of Europe, thus reducing tax revenue. I argued in the NYRblog at the beginning of January that this would be the likely outcome.

Though the negotiations will be difficult, the recent elections in Greece may actually create a blueprint for such a solution and force Germany to come to its senses. It has long benefitted from purchases of its goods in Greece and the other periphery nations, exploiting a low-valued euro. It is time to give some of that back. And in the process, once a plan for true growth is in place, Greece will have to manage itself well, end patronage, spend cautiously, pay its taxes, and stand tall as part of the EU. It will meet this challenge because it will be then be able to, and it is, I suspect, eager to do so.

May 17, 2012, 12:50 p.m.


Visit to Germany
Tsipras Says Berlin Must Back Down on Austerity
By David Crossland

Charismatic, eloquent and defiant, the leader of Greece’s Radical Left party, Alexis Tsipras, visited Berlin on Tuesday to ram home the message that he will scrap austerity if he wins the June election, and that no one, not even mighty Germany, has the right to evict Greece from the currency.

… The charismatic leader had visited Paris on Monday as part of a tour to convince a skeptical European public that he is not bent on wrecking the euro. In Berlin, he was hosted by Germany’s opposition Left Party, which agreed a six-point program with Syriza calling for an end to austerity, taxes on banks and the rich and economic stimulus measures.


Amazing that this one has given rise to such Irish extremism….with such anti-Greek sentiment especially from the Irish “right” (middle of the road definition elsewhere)….lead by the MOF….Seems to have touched a nerve among the “haves”….I’m left wondering why that is so….?

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