Gavin Barrett Responds to Vincent Browne

This post was written by John McHale

A Guest Post By Gavin Barrett

While I am second to none in my admiration of Vincent Browne for his willingness to engage with the legal issues raised by the Fiscal Treaty, I would have difficulties with some of the assertions made by him in his article in the Irish Times today.

1)      I am unable to see how the Pringle case (or any other case) can be the source of a legal threat to the Fiscal Treaty’s validity (as opposed to the ESM Treaty’s). The Fiscal Treaty is a normal intergovernmental treaty which the member states are perfectly entitled to agree with each other in international law.

2)      To my mind, the European Stability Mechanism Treaty clearly does not violate Article 3 TFEU. Nor does the Fiscal Treaty.  (Article 3 TFEU, as Vincent Browne correctly points out, confers exclusive competence on member states whose currency is the euro). The ESM Treaty has nothing to do with monetary policy. It sets up a permanent bailout fund to lend to member states in distress. The Fiscal Treaty also has nothing to do with monetary policy. As its name suggests, it has to do with fiscal (i.e., taxation and expenditure) policy.

3)      It is very far from clear that the Article 136 TFEU amendment process gives an opportunity to member states to veto the setting up of the ESM. It may be argued that it does, but it is not something I would bet the house on, much less the future of the Irish economy, which is what the ‘no’ side appear to want to do. The Referendum Commission does not support the view that there is a veto. Nor do the member states themselves, which will establish the ESM in July 2012 without Article 136 being in force. 

All going well, Article 136 TFEU should however be amended shortly afterwards by 1 January 2013. (Ireland, incidentally, has very little interest in vetoing this amendment, since it will put the legal basis of the ESM Treaty beyond any possible doubt. That is a good thing, since it looks increasingly likely Ireland will need to turn to the ESM for a second bailout in 2014.)

4)      I am unaware of any reason for questioning the use of the so-called Article 48(6) simplified revision procedure to effect the amendment to Article 136 TFEU.

5)       I am not aware of fundamental changes being planned for the EU’s structure which bypass procedures suitable for such change. The only one question mark that might be posed is in going ahead with the ESM Treaty without the Article 136 TFEU amendment. However, even if one took the view that the ESM Treaty should be supported by the Article 136 TFEU amendment, the latter amendment should follow its establishment within six months, then removing whatever doubt may be felt to exist in this regard.

76 Responses to “Gavin Barrett Responds to Vincent Browne”

  1. Actuary Says:

    Forget all the legalese - to quote VB:

    “It seems fundamental change is planned for the EU’s structure by bypassing procedures suitable for such change and, of course, without any involvement on the part of us, the people, here or elsewhere in Europe.”

    Undoubtably true. We will be consulted to the least extent possible, most won’t be consulted at all. When we are consulted, big business, politicians, media etc will ensure that the consultation is a sham.

  2. David O'Donnell Says:

    @Gavin Barrett

    Minor point:

    The ‘Fiscal Treaty’ does NOT have ANY “social scientific economic” Validity.

    An interesting little ontological challenge for a legal scholar … but a potential Debt of €90 billion for a lumpen Irish Citizenry.

  3. EWI Says:

    The spamming of this website in support of this remarkably unwise and unwanted treaty has been something to behold.

    I get that for some contributors it may be a matter of some academic satisfaction to outlaw Keynesianism, but for it to be so shameless….!

  4. Paul W Says:

    @ EWI It’s likely more simple (self interested) than that. Academic reputations (status) are at stake…..for the likes of JMcH (Y vote, Fiscal Council Chairman, plus for the likes of Patrick Honohan) to lose with N vote would involve banishment to the wilderness…..Remember, these guys don’t actually live in the real commercial world and have little experience or knowledge of it outside of ‘economic theory’…they are academics, with ‘theories’.

  5. Actuary Says:

    @Paul w

    JMcH doesn’t have theories - just truth

  6. Paul W Says:

    http://www.irisheconomy.ie/index.php/2012/05/20/an-illustrative-budgetary-scenario-for-2016-2020/#comments

    Illustrative “truth” as per Ireland’s Fiscal Council Chairman.

    For what it is worth, John, basing your ‘theory’ on irrelevant /discredited Irish Govt ‘projections’ has undermined your offical ‘word’ in my view.

    Where is Morgan Kelly?!

  7. V barrett Says:

    How can a multi billion euro, perhaps trillion euro bailout not constitute some form of the Area’s monetary policy? Is monetary policy tightly defined in any of the treaties?

  8. Paul W Says:

    @ VB Nice try…but impossible to be distracted here….John’s naivety…Official Ireland’s naivety…. so disconnected from ordinary people and the reality of very many, the world.

    It is clear that John’s ‘interjection’ here is some sort of ‘kick off’ for the last week of the FC debate…..doesn’t make it any less shameful..

    Was (again) with a snr PE CRE figure in the US today….”the Irish [NAMA] just don’t get it”…..PE /large funds “can go anywhere in the world”……

    My visiting mother enjoyed the Eurovision semi last night…..beamed via internet to my large screen here in the US…go Jedward! The kids also loved the drama (Jedward - haven’t they improved performance-wise!). To an onlooker, Azerbaijan looks like a better and more likely prosperous investment bet /opportunity than Official Ireland’s ‘projection’ of Ireland Inc…..Gleaming “Hilton Bacu”s, etc. Well done Azerbaijan.

    PE CRE USA is “certain” that the 12.5% tax rate will be taken away as part of Bailout II (or “is it really bailout III?”)…..I should mention also that US MNC is highly concerned on the issue at this point…..hoping that the damage will be limited to a max. 15% revised CT rate. Anything higher will be “end game”….global money /global competition, etc…..Bailout II (or III) is a bigger issue than the FC…..although the latter will facilitate the former (despite denials)

    Beyond that, the existing political configuration in Ireland is seen as “unsustainable”……Seriously (”not funny”). Ireland is now in the territory of “third world risk”. Seriously.

    John, you have no (seriously, zero) idea….! Global Business does not back stupidity…unless there is real upside for it (and low reputational risk, I should add)!

  9. Bond. Eoin Bond... Says:

    Wow, thats quite a torrent from the No side late into the night…

  10. David O'Donnell Says:

    @BeB

    Agree! No point in shooting the messenger …

    Big YAWN last night …

  11. Michael Hennigan - Finfacts Says:

    @ Actuary

    Your suggestion of more democracy in Europe absent distorted weighting for small countries, may not suit either.

    God forbid that German voters would outvote us on an issue!

    @ Paul W

    I should mention also that US MNC is highly concerned on the issue at this point…..hoping that the damage will be limited to a max. 15% revised CT rate.

    Is this one person’s view?

    The big companies just minimise reported income because the Revenue isn’t going to ask about a piddling intercompany charge of $2bn .

    That’s the clear evidence from filed accounts.

    It’s a bit rich for individuals who hide their identity to charge others with self-interest etc

  12. PR Guy Says:

    @EWI

    “The spamming of this website in support of this remarkably unwise and unwanted treaty has been something to behold. I get that for some contributors it may be a matter of some academic satisfaction to ….”

    Another day, another scholar.

  13. tullmcadoo Says:

    Paul W

    ….”the Irish [NAMA] just don’t get it”…..PE /large funds “can go anywhere in the world”……

    I presume this means that NAMA won’t hit your hedge fund vulture’s ridiculously low bid. In refusing to do so is it not acting in my interest as a citizen and taxpayer of this country rather than your pal’s interest.

  14. Bond. Eoin Bond... Says:

    @ EWI

    Ireland will run a non-bank related cumulative deficit in 2008-2015 of what, 45-50% of GDP? Not Keynesian enough for ya?

  15. Bond. Eoin Bond... Says:

    @ Tull

    the international HF & PE community is genuinely shocked that there hasnt been wide-scale fire sales in Ireland yet. Any of them who’ve come to Ireland have typically tried bidding 5-10 cents on original values and have been shocked that they have been impolitely asked to vacate the premises. Apparently this means Ireland “doesn’t get it”. US corporates who are willing to work with NAMA and lease/buy premises obviously “don’t get it” either.

  16. Dave W Says:

    There’s 12 comments so far. Not one of them relate to the actual post. Do people just have a canned response on the Treaty and paste it in here? Anyone actually disagree with Barrett’s analysis?

  17. V barrett Says:

    Dw

    Respectfully disagree and still interested in views on how extracting trillion euro from EZ money supply for purposes of bond rate interventions does not fall within meaning of monetary policy?

  18. Livonian Says:

    @Dave W

    “There’s 12 comments so far. Not one of them relate to the actual post.”

    I understand what you mean but in the absence of a post on ,IMHO,the extremely dissapointing European summit I hope Gavin Barett will understand.

    Anyway as I understand it (& would be delighted to be corrected if I am wrong) John McHale is recently of the opinion that few people read comments on this site.

    So if I am not wrong ,but I must stress that I hope I am wrong, IMHO it would be entirely understandable that any recent threads posted by John McHale may not reflect the volume of comment (both on and off topic) which this excellent site has attracted until recently.

    Best….. L :-)

    @LivonianGoose

  19. Ceterisparibus Says:

    Gilmore says there is no contingency plan…..what will we do for feta cheese?

  20. V Barrett Says:

    Noonan this morning - “the fiscal treaty is an important stepping stone to Eurobonds”"

    These guys are unreal - it was their plan all along to push hard on Eurobonds and that is why they have been peddling the treaty so hard up til now without a whisper of EBs. It was also in their plan that Hollande would win the French election and immediately carry the torch for eurobonds…we could seat in the background and let them rattle Angela’s cage and row quietly in behind them….or better yet, row in behind them but defend Merkels treaty to the hilt as being important stepping stone to Eurobonds. Now the French and Germans both think the Irish are behind them. Enda’s confused looks at summit meetings is not making them any the wiser.

    I swear Noonan et al are machevallian geniuses (or is it genii)

  21. Garry Says:

    I agree with statements in the op like “The Fiscal Treaty is a normal intergovernmental treaty which the member states are perfectly entitled to agree with each other in international law.”

    I have a question on the statements in the op “The ESM Treaty has nothing to do with monetary policy.” and “As its name suggests, it has to do with fiscal (i.e., taxation and expenditure) policy.”

    which leads on to the difference between fiscal vs monetary policy and what these terms mean in the context of the Euro and who runs the proposed ESM…

    My opinion on reading both articles is unless the ESM is either exclusively controlled by the Union (not just those who sign up)
    Or if not then the ESM must collect money up front by the who have signed up (no borrowings, no bullshit, the numbers must be in their states deflicts) . If the ESM is in some way leveraging then it is involving itself in monetary policy which is contrary to Article 3….

    Is that correct or have I got it badly wrong?

  22. PR Guy Says:

    @Dave W

    “There’s 12 comments so far. Not one of them relate to the actual post”

    Fair point.

    It would be useful though if this site had a couple of ‘thread buckets’ that were longer lasting/ongoing to get into arguments about broader topics such as the Greek crisis, the FC referendum, the Irish economy taking off like a rocket, etc. At least it wouldn’t hijack very specific discussions if they were there to go and vent one’s spleen on.

    D’oh! I’ve just gone off-topic……

  23. PR Guy Says:

    @V Barrett

    “I swear Noonan et al are machevallian geniuses (or is it genii)”

    In most cases, it’s perfectly acceptable to use ‘geniuses’. Modern English is fairly flexible about what’s right and proper these days - the focus being more on ‘accepted use’ and so on.

    The first-person masculine plural is genii (so use that if you want to be technically correct and you are talking about a group of individuals and their collective genius….. or that they all individually can be classed as a genius and you want to group them together). I won’t go into the detail because I go zzzzzz on Latin.

    You should always use ‘Genii’ if you refer to the guardian spirit of a person or place (exists in Roman mythology).

    ‘Pillocks’ is another good word to use to describe Noonan et al.

    D’oh! I’ve gone off-topic again….

  24. Ceterisparibus Says:

    @V Barrett
    “I swear Noonan et al are machevallian geniuses (or is it genii)”

    I’d say the latter….as in bottles.

    Angela is the Machevallian. Leading 17 (or 27 )Princes a merry dance while she thrives. All around her are in disarray.
    Free money for Germany yesterday and her 10 yr at all time low of 1.38%, which is effectively free money.
    Why would she change anything…just keep the nice little Princes in the tent.

  25. Colm Brazel Says:

    Oh, I disagree with Barrett’s analysis.

    Firstly, it contains the usual propaganda”I would bet the house on, much less the future of the Irish economy, which is what the ‘no’ side appear to want to do.”

    The Y side are betting the future of the Irish economy on the austerity giveaways and sellout of sovereignty, but let’s leave this aside, for the moment.

    VB argues:

    “Both these changes represented a major change to the nature of the EU, and the question arises should such fundamental changes have been done through the “simplified” or through the “ordinary” procedure, which would have involved a convention composed of representatives of national parliaments, members of the European Parliament and of the European Commission, and heads of government. This would have been followed by a conference of representatives of the governments of member states.”

    According to Barrett, “The Fiscal Treaty is a normal intergovernmental treaty which the member states are perfectly entitled to agree with each other in international law”

    No, it certainly is not. For example, the ESM will have an authorized stock of ¢700 bn, but where will this come from? What powers does this give ESM, what binding laws on Ireland’s economy does it give itself?

    http://www.youtube.com/watch?v=gNa5k0KCVbw

    Unfortunately, AG Marie Whelan has not published her reasons for calling a referendum, but I’m guessing, perhaps AG Marie Whelan noticed the following in our constitution and saw the stranglehold of the treaty’s hands on 2.1:

    2. 1° The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”

    Delighted to see the Pringle case, but I hope it covers more than Article 3 TFEU.

    In fact, those of us who recall Maastricht know that at the core of the debate for and against, was a similar concern that focused on ’subsidiarity’

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

    “The concept of subsidiarity therefore has both a legal and a political dimension. Consequently, there are varying views as to its legal and political consequences, and various criteria are put forward explaining the content of the principle. For example:[citation needed] The action must be necessary because actions of individuals or member-state governments alone will not achieve the objectives of the action (the sufficiency criterion) The action must bring added value over and above what could be achieved by individual or member-state government action alone (the benefit criterion). Decisions should be taken as closely as possible to the citizen (the close to the citizen criterion) The action should secure greater freedoms for the individual (the autonomy criterion). [edit]Court of Justice The Court of Justice of the European Union in Luxembourg is the authority that has to decide whether a regulation falls within the exclusive competence of the Union. As the concept of subsidiarity has a political as well as a legal dimension, the Court of Justice has a reserved attitude toward judging whether EU legislation is consistent with the concept. The Court will examine only marginally whether the principle is fulfilled. A detailed explanation of the legislation is not required; it is enough that the EU institutions explain why national legislation seems inadequate and that Union law has an added value.”

    FC is in clear breach of the following:

    1. The action must be necessary because actions of individuals or member-state governments alone will not achieve the objectives of the action (the sufficiency criterion)

    2. The action must bring added value over and above what could be achieved by individual or member-state government action alone (the benefit criterion).

    3. Decisions should be taken as closely as possible to the citizen (the close to the citizen criterion)

    4. The action should secure greater freedoms for the individual (the autonomy criterion).

    The blackmail clause is clearly in breach of 4, 3 and in breach of other parts of the Treaty guaranteeing the right to bailout of members of the EMU, but above is enough for now.

    Re Barrett, “The ESM Treaty has nothing to do with monetary policy.” Hard to believe this point was actually made, perhaps just reread the ESM on conditionality:

    “Political consensus on the ESM was reached
    at the meeting of the European Council on
    16-17 December 2010, when it was agreed
    to add a new paragraph to Article 136 of the
    Treaty via the simplifi ed revision procedure.
    Following opinions from the European
    Commission, the ECB and the European
    Parliament, the European Council adopted the
    following wording: “The Member States whose
    currency is the euro may establish a stability
    mechanism to be activated if indispensable
    to safeguard the stability of the euro area as a
    whole. The granting of any required financial
    assistance under the mechanism will be made
    subject to strict conditionality.”

    Actually, if you read carefully the documentation eg ”

    strict conditionality attached to
    assistance are necessary to limit the moral
    hazard implicit in a crisis management
    mechanism and to ensure that the existence of
    the ESM does not weaken incentives for sound
    fiscal and macroeconomic policies in euro area
    countries. ”

    The ESM has already breached the terms of its own creation. It was originally meant to be of short duration, as in the crisis mentioned above, any moral hazard was to be abated by its temporary nature. It has since evolved into a proposed permanent structure with rules of engagement above the law.

    This should give those who protect parliamentary democracy the shivers as its taking the EMU in a whole new direction:

    Now FC one hopes is not exactly like the changing of the Weimar Constitution, but its dampening down of sovereign freedom in favour of unelected and authoritarian powers should give one the shivers.

    “In March 1933, with the Enabling Act, was passed by 444–94 (the remaining Social Democrats), the Reichstag changed the Weimar Constitution to allow Hitler’s government to pass laws without parliamentary debate for a four-year period, even such deviating from other articles in the constitution (the Act, forming the legal basis for the regime, was subsequently renewed by Hitler’s government in 1937 and 1941).”

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

    US congress was faced with a similar grab for power by the bankers and its FED but it capped the money that could be given to the banks.

    ESM can grab whatever it wants and sovereign members of the EMU will have to pay up under pain of sanction from ECJ.

    Those powers should be resisted.

  26. grumpy Says:

    *IRELAND’S NOONAN DOWNGRADES FISCAL COMPACT FROM “PATHWAY” TO “STEPPING STONE”*

    “Gateway”, “Pathway”, and now just ” a Stepping Stone”.

    Any guesses as to what comes next, how many other stepping stones will be required, and to what else the surly, unenthusiastic, eventual German traveller will want to step on apart from a stone?

    Are EIB and project bonds going to be spun as the new “Eurobonds”?

  27. Colm Brazel Says:

    Occasionally one gets the impression the Irish Yes Campaign have turned into zombies lured by ESM blood, the Irish crock of gold. Lest I be the target of any xenophobia charges of xenophobia, let’s look at similar Pringle cases across Europe re ESM, here’s one:

    The European bailout policy by the (German) federal government and with it the so-called “European Stability Mechanism (ESM)” are putting the economic rights of the German Federal Assembly in existential danger. Other bureaucrats, particularly Brussels EU bureaucrats will soon be able to decide over German tax monies. Therefore, the renowned constitutional law expert Christoph Degenhart (photo right) and the controversial former SPD minister of justice Herta Däubler-Gmelin (left) are going to raise a constitutional complaint against the ESM (PI previously reported). The special thing about this: Any citizen can join here at no cost to themselves in this complaint before the highest court of Germany.

    http://www.pi-news.org/2012/04/citizens-can-join-in-complaint-against-esm/

  28. Colm Brazel Says:

    2nd par above should be in quotes, sorry.

  29. Tullmcadoo Says:

    PR guy,
    I detect from your comments a certain cynicism towards our current govt. I presume such cynicism is totally unrelated to their reluctance to use your services & your equal reluctance to work for them.
    I for one wish that situation continues as I would miss your ascorbic commentary.

    Grumpy,
    EIB project bonds will be spun by both sides as being/not being EBs. But little by little we are moving toward the end game where core EZ Bondholders will get hosed by a perfect storm of inflation/ mutual issuance. Either that or default by the porcines.

  30. The Dork of Cork Says:

    “The Fiscal Treaty also has nothing to do with monetary policy. As its name suggests, it has to do with fiscal (i.e., taxation and expenditure) policy”

    Well yes and no.
    Its correct fiscal stuff concerns itself with tax and spend (and therefore tradional western politics which will be even more absent in future if this treaty is passed)
    But this treaty puts rules on the amount of paper that can be issued relative to consumer bank credit.

    This obviously effects the leverage in the system….. which has monetary & real world physical consequences.
    This is best seen when Politicians claim such as on the 1 o clock news that growth and the fiscal treaty remain seperate……

    What they are in fact saying , although they may not know it is that they need to increase the leverage even further so as to increase growth……

    But this has created the Titanic like consequences of today where there is no money demand for the Turkey credit “growth” investments.

    This fiscal treaty does have monetary consequences as the fiscal paper is a form of money.
    When you change the ratio of these different types of money in the system ……..monetary & afterward physical consequnces always happen.

    We have to come to terms with the fact that the European establishment do not under any circumstances want real money in peoples pocket.

    Just leveraged credit turkey money.
    This is a serious development to say the least.
    http://www.youtube.com/watch?v=B-OFXUaMIv8

  31. Joseph Ryan Says:

    On the post itself and no offence to the author:

    “It is very far from clear that the Article 136 TFEU amendment process gives an opportunity to member states to veto the setting up of the ESM. It may be argued that it does, but it is not something I would bet the house on, much less the future of the Irish economy,”

    But the Irish economy was bet on the house, or was it the houses that were bet on the economy or whatever!

  32. The Dork of Cork Says:

    @Joseph
    Because of the fiscal rules or more accuretly article 123 the money must grow via mushrooming of credit waste such as houses and the like.
    This is why we have experinced decades of malinvestment which has made us poorer with the exception of a few.

    They wish us to hold almost all money as a form of collateral rather then a token of the state which what pure fiat money is.
    We are very far away from pure fiat money with “sovergin” debt based money but they want to go even further.
    I don’t want all my money savings shadowing concrete that may or may not be useless credit waste , which will be a consequnce of this fiscal thingy.

    Money as a medium of exchange is most fundamentally a simple token of value which you can measure stuff of possible worth against it , it is not a object of worth based on its intrinsic value , be that Gold or a loan to a bank that may have a return or not.

    They whoever they are wish to take that away from us which means they wish to subtract the state from all activities of importance.
    Leaving us even more open to non state actors and organisations which can now dictate money and goods supply independent of state law.

    This is not a “German” conspiracy … the Germans are mere actors in this.

    The Euro is a all out attack on Fiat money itself from I suspect very shadowy non state actors & organisations.

  33. PR Guy Says:

    @Tullmcadoo

    “I presume such cynicism is totally unrelated to their reluctance to use your services & your equal reluctance to work for them.”

    I prefer to think that they can’t afford me :-)

    It will all end in tears for European governments anyway so who wants to work for one? An American friend of mine keeps reminding me that ‘Europe’ is just a bunch of disparate tribes and bit-players masquerading as a world power and they can’t keep up the pretence for much longer.

    I’m no expert on the law related to all this or the EU institutions but I’d have thought VB is not too far from the money in some of the things he’s been saying around this area. If TPTB, whether in the EU or elsewhere, want to take steps to ensure that democracy is sidestepped or as few as possible are involved in making decisions or want to bend the rules to suit themselves then they will find a way of making that happen. C’est la vie. There is nothing new under the sun there.

    What’s important for the rest of us is to maintain the ability to catch them and expose them doing it. I fear we are losing it but long live a free press anyway (have you seen the number or execs from JPM, GS, etc. and ex-politicians on large media company boards? It’s bloody frightening.). I wouldn’t be a huge VB fan personally but one always has to admire anyone out there looking to expose whatever they think the truth is. It can be a dangerous and/or thankless game.

    @The Dork of Cork

    Those shadowy non-state actors and organisations are out there alright. I’m not joking and I’m pretty sure you’re not either.

  34. PR Guy Says:

    Mario Draghi in a speech this afternoon promoting greater European integration (that and ‘freeing up labour markets’ is what it’s all about as far as those who have siezed the agenda care) and telling TPTB they now need to take a “courageous leap.”

    @Mario Draghi

    Where I come from Mario, a “courageous leap” is often called a “running jump.”

  35. The Dork of Cork Says:

    @PR
    People sometimes forget , Ian Fleming was a real spy.
    http://www.youtube.com/watch?v=9BhDeyscOm0

    Politicians think they sometimes come up with original ideas now and then - in fact they hear it in the wind , whispered into the ether by various “think tanks”

    They propose to give the former currency of the realms to free banks to do so as they wish as all money will become consumer bank credit under this proposal.
    It will involve almost unlimited production of credit leverage ,unlimited power for these free banks which now can produce the coin of the realm at will.

    Its quite something really.
    I wonder what really went down during those years…….
    en.wikipedia.org/wiki/European_Monetary_Institute

    The treasuries / polticans have completly and voluntarily abandoned their power.
    They are just happy getting paid in these new chips.

    When the BoE was a private bank in 1914 and there was a run on it by the clearing banks fearing that its customers were saving gold sovergins as a store of value…..what do you think happened ?
    HM Treasuary merely produced pure fiat in 10 shilling and 1 pound notes which covered 20 % of its liabilities or so.
    (Of course they seem to only give out fiat to people when they are sure a good % of them will die)

    Treasuries can produce pure fiat at any time they wish , they don’t even need their Central banks which are now severely compromised by the presence of BIS operatives.
    CBers never considered themselves loyal to any country but Mammon but even the pretence of attachment seems to be lost these days.

  36. seafóid Says:

    @ PR Guy
    “It would be useful though if this site had a couple of ‘thread buckets’ that were longer lasting/ongoing to get into arguments about broader topics such as the Greek crisis, the FC referendum, the Irish economy taking off like a rocket, etc. At least it wouldn’t hijack very specific discussions if they were there to go and vent one’s spleen on.”

    Maybe we should organise a sale of work to buy some blog equipment.
    I would be happy to make some biscuits which could be marketed by Tull and sold at a discount to those who lost everything in Bulgaria.
    We could even potentially have a souped up blog as a lure to get Karl Whelan back.

  37. Robert Browne Says:

    @ Colm Brazel

    Enjoyed reading your post above and have come to understand what the word “functionaries” means, as I read the verbiage from the “Y” side. When you pin them down and few have managed to pin them down on repaying or servicing the debt they look shocked, as you are not supposed to ask such questions. They fire a daggers drawn expression in your direction and start to talk about the inevitable “soft default” which seems to be their strategy. Imagine talking about “soft defaults” and getting back into the markets? Anything, as long as they can keep borrowing money to the end of this governments 50 year term.

  38. PR Guy Says:

    “We could even potentially have a souped up blog as a lure to get Karl Whelan back.”

    Yes, I loved the way he’d give people a slap and make them look like total idiots.

    Biscuit futures. That’s the way to go.

  39. Paul W Says:

    @ Tull “I presume this means that NAMA won’t hit your hedge fund vulture’s ridiculously low bid. In refusing to do so is it not acting in my interest as a citizen and taxpayer of this country rather than your pal’s interest.”

    That nicely illustrates some Irish problems…..Inability to deal with reality and hence, nowadays, lack of credibility with international investors. Very sad to see that.

  40. Livonian Says:

    @PR Guy@Dork

    “Those shadowy non-state actors and organisations are out there alright. I’m not joking and I’m pretty sure you’re not either.”

    +1

  41. Livonian Says:

    @PR Guy @Tull

    “What’s important for the rest of us is to maintain the ability to catch them and expose them doing it.”

    +1

    I am slightly more optimistic than the view expressed in the rest of your paragraph.

    IMHO it is a little easier to “catch them” after they become arrogant and complacent especially when they start to irritate capitalists who fully understand how fragile economic stability/democracy can be :-)

  42. tullmcadoo Says:

    Paul W

    PE/HF have to bid low to get stuff because they have no tenant lined up…usually. The low bid compensates for the search costs of finding a tenant. If you have a incoming tenant, NAMA is getting a better price becauese he is the tenant.

    The HF/PE guy is a value investor-he is going to bid low. NAMA is right not to hit the bid too quickly. I appreciate you take a different view and think the Irish taxpayer should be completely shafted. That of course is your right. And it is our right to interpret everything you say through that prism.

  43. Bond. Eoin Bond... Says:

    And there we have it. As i have mentioned ad nauseum, Hollande is not renegotiating the fiscal compact. It will instead come via a separate Growth Compact. The only relevant claim from the No side has now been obliterated.

    Via Google Translate:

    “The meeting aimed at preparing the European Council of June 28 and 29 “which should, if the work is done in this area, prepare a Growth Pact could be another step in what has so far built,” said the French president during a press conference….

    …To enable the debate to move forward, Francois Hollande has put a damper on its demand for a renegotiation of the Treaty of fiscal discipline, which aroused the opposition of Berlin.

    He said he could give it up if he gets satisfaction on growth in a separate text, while pledging to put public finances in French.”

    http://fr.reuters.com/article/businessNews/idFRPAE84N00U20120524?pageNumber=1&virtualBrandChannel=0

  44. Paul W Says:

    @ Tull NAMA is illustrative of the current Irish malaise and denial of reality. As a solution it does not work, it simply perpetuates a serious underlying problem, over-dependency on the Irish taxpayer in the first instance and ultimately dependency on EU welfare. While the FC has some independent merits, the ESM-dependency of the Y camp illustrates the point further…

    At some stage, reality will have to be faced. Allowing the Irish property market to find a proper clearing level will be part of that. In the meantime, you can take it that international investors are not ‘admirers’ of the current welfare mentality. FC supporters claim that it will invigorate international investor confidence….Not so sure about that.

  45. V Barrett Says:

    @BEB
    What I find odd about your posting is that you are almost triumphant about what is surely a negative for Ireland as a country. Its a positive if you have put a wedge on at Paddy Power on a Yes outcome because it will give a slight swing to the Yes vote….but thats about it….

    “He said he could give it up if he gets satisfaction on growth in a separate text, while pledging to put public finances in French”

    wouldn’t it be better for Ireland if he said he couldn’t give it up and got something concrete into the treaty in this regard….It is truly troubling that our own Government probably has the same mindset given that they are wed simply to the idea of passing a treaty - the complication and prospect of a new and improved and better for Ireland treaty was a massive headache for them and could have been very embarrassing…this is shameful postering.

    notwithstanding any of that - as a No voter before Hollande’s arrival on the scene - I don’t see that ANY of my reason for that decision is in anyway obliterated by this.

  46. Colm Brazel Says:

    @ Robert Browne,

    tks :-) Enjoy. The Y pitch fork position is threadbare so it avoids issues it doesn’t want attention given to :-) Forget about how debt is to be serviced or what austerity lies ahead for taxpayers, its a no go subject area.

    Spain and Italy most exposed to Greek default

    http://www.reuters.com/article/2012/05/24/insurance-fitch-idUSL5E8GOAPT20120524

    JP Morgan $100 bn exposure, how much to Greece?

    http://www.reuters.com/article/2012/05/23/jpmorgan-cio-fed-idUSL1E8GND2A20120523

  47. Frank Galton Says:

    @grumpy

    next we’ll have a row about whether Noonan was a plenipotentiary when he agreed to the treaty.

  48. Ceterisparibus Says:

    @Bond Eoin Bond/ V Barrett

    “…To enable the debate to move forward, Francois Hollande has put a damper on its demand for a renegotiation of the Treaty of fiscal discipline, which aroused the opposition of Berlin.

    He said he could give it up if he gets satisfaction on growth in a separate text, while pledging to put public finances in French.”

    He only put a “damper” on it’s demand for renegotiation …..he could give it up if he gets satisfaction.
    What if he gets no satisfaction …..I suppose like mick jagger he will try and try and try but I’d be very concerned about all those aroused Germans in Berlin.

  49. Tullmcadoo Says:

    Paul,
    The former CEO of Sanford Bernstein described a value investor ( your pal) as someone who got a premium for relieving a seller of a stock he did not want. NaMa will have to sell and at the mo it is getting better prices of trade buyers than selling wholesale to your pal. Given it’s funding costs are going lower it should festine Lente. Ultimately in all previous crises your pals did rather well by buying at depressed prices or getting stuff in grubby insider deals. I am just saying NaMa should be careful.

  50. Paul W Says:

    @ Tull So market manipulation is your answer…..

    No, reality will have to be faced (or externally enforced) at some stage. Simple as that.

  51. Bond. Eoin Bond Says:

    @ VB

    im not “triumphant”, i really just want people with catch up with reality and not keep touting fantasy solutions. As i have always said, we’re left with a series of sh1tty choices, but we may as well choose the best of them rather than chuck them all out and cross our fingers that something better comes along.

  52. Colm Brazel Says:

    @ BEB

    “The only relevant claim from the No side has now been obliterated.”

    Actually No, as usual you completely miss the point. Its irrelevant whether there’s a separate text on growth, a renegotiation of the main text of FC, or by some other means; the point is, irrespective of which way it comes, Hollande and the ‘No’ side want to see the ‘money’ ? In Ireland, some would prefer to sign up to the no-brainer position of no questions asked.

    German taxpayers are wondering how much it will cost them as well. ITs on the cards that some of the money will come from a German push for Financial Transaction tax to lessen the burden on German taxpayers if ESM gets past the German court system. But we’d rather not ask such embarrassing questions, would we :-)

    http://www.pi-news.org/2012/04/citizens-can-join-in-complaint-against-esm/

  53. Paul W Says:

    @ BEB Anyone who thinks that the artificial construct that is Ireland these days is “reality” is just self-delusional. When genuine reality arrives, I sincerely hope hope that Ireland will not have wasted away in the meantime to a point where it is as weak as Greece is now……

    @ CB “In Ireland, some would prefer to sign up to the no-brainer position of no questions asked.”
    + 1

    The endless EU support will not /cannot go on forever. Reality is coming. Just a matter of when.

  54. Bond. Eoin Bond Says:

    @ Colm

    so if there was a full on Growth Compact in place you’d vote Yes?

  55. Tullmcadoo Says:

    PW.
    Chill out, your pal in PE will do v well out of the Irish taxpayer. I hope he looks after you.

  56. OMF Says:

    The f***….?!

    If I disagree with an Irish Times column, can I get a 5 point guest post on the Irish Economy blog as well. I might need more than one though.

  57. Bond. Eoin Bond Says:

    @ OMF

    Gavin Barrett is a legal scholar renowned for his expertise on European law. What have you done lately?

  58. OMF Says:

    Gavin Barrett is a legal scholar renowned for his expertise on European law. What have you done lately?

    I am the world’s foremost expert on the Irish economic crisis, renowned for my erudite and perspicacious insights into all facets, synergies, events and errata of the crisis.

    Can I get my post now?

  59. Paul W Says:

    @ Tull The other point of course is that, generally, PE won’t go anywhere near Ireland for now, to Ireland’s detriment…Plenty of opportunities for PE elsewhere.

    In the meantime, property values in Ireland continue to decline….No market, increasing damage to bank capital levels, etc.

    Another really good, non-property example that comes to mind of the downside of this procrastination and can-kicking was AIB’s rebuff of CIBC a few years ago….What a mistake! and what arrogance from AIB at the time.

    Plenty of other examples….and, bar some MNC (12.5% tax dependent wins) no significant sign of international investor confidence returning anytime soon. That’s a real shame.

    The FC won’t improve that situation. In fact, quite the opposite in the short term….until Reality arrives, which it must….

  60. Tullmcadoo Says:

    PW,
    CIBC were looking to buy stake in M&T and I gather M&T did not want them or Santander for that matter. It was not a bid for AIB.
    Your analysis of economy is about right. It is neither going up or down & about to get worse. I am thinking of a default and break in euro inside 12 months.

  61. Paul W Says:

    @ Tull Believe me (but it’s Unbelievable!), the inside story was that a full approach was intended ….one of the best ‘worst’ examples of the downside of the bailout, can-kicking story in Ireland.

  62. Tullmcadoo Says:

    PW,
    Never knew that. CM really dodged a bullet there.

  63. seafóid Says:

    “Plenty of opportunities for PE elsewhere”

    And it’s so easy to offload those PE investments these days
    And raising PE cash is a doddle
    And Wicklow will win the All-Ireland

  64. seafóid Says:

    @Pr Guy

    “An American friend of mine keeps reminding me that ‘Europe’ is just a bunch of disparate tribes and bit-players masquerading as a world power and they can’t keep up the pretence for much longer.”

    Does he live in California? That budget deficit is no better than back in the old world. And the municipalities are in worse shape.

    Do you ever read Caldwell in the weekend FT? I find his worldview disturbing. The Republicans will not raise taxes under any circumstances. The schmucks of the US are going to have to take the adjustment. How long will that last ?

  65. PR Guy Says:

    @seafóid

    I prefer to read that Chinese guy in the weekend FT. Far more fun.

  66. Robert Browne Says:

    @ Bond. Eoin Bond

    “Gavin Barrett is a legal scholar renowned for his expertise on European law. What have you done lately?” What have you done lately? Might I suggest that surviving the outcomes of some of the economists, politicians and legal experts we are supposed to be beholden to, is itself an achievement. We all cannot fit into Croke Park.

    We know that OMF has given some of the most insightful insights into the Irish crisis. I don’t think you should be blinkered by the words “Dr.” or “Professor”. We now know, to our great cost, what group think delivers and just to remind you it led to a rapid disintegration and loss of national sovereignty. Some of the costliest decisions made were by fawning politicians quoting what Dr. Bacon had said or what Professor Honohan had said, as they reverently bowed their heads muttered something beneath their breath and beat their breast three times.

    As a high court judge would say, I prefer the interpretation of Dr. Karen Divine Mr. Barrett’s UCD colleague.

    http://debates.oireachtas.ie/EUJ/2012/02/23/00005.asp

  67. Colm Brazel Says:

    @ Bond

    “so if there was a full on Growth Compact in place you’d vote Yes?”

    Nope, no ticket on The Titanic for me, thanks. I’m too much a capitalist, EMU is becoming a dangerous mess and won’t last.

    Giving away Sovereignty to a bunch of Goldman Sachs bankers in return for austerity and some vague promise to give you a loan and stiff you with odious debt is a very bad deal.

    But its ironic by voting No I’ll be protecting our financial services industry from being looted and pillaged with CT and FTT to appease German taxpayers :-(

  68. Bond. Eoin Bond Says:

    @ Colm

    you more or less proved my point - you have no interest in any of the negotiations or events taking place in Europe right now. You want Ireland out of the Euro. Its as simple as that. Any comments you make about the government’s response or reaction to Hollande & Co are therefore meaningless. They won’t have any impact on your decision. So why make any comments on them with such a blinkered and irreversible viewpoint?

    @ Robert B

    what should the criteria be for who gets to post here? That was the only point i was making. Should we let anonymous posters do it?

  69. Shay Begorrah Says:

    @Bond. Eoin Bond

    Should we let anonymous posters do it?

    There is room for some sociology here, employers are a conservative lot and Ireland is a very, very, small place. I have taken pains not to say anything too controversial on the Internet under my own name since the early nineties for just that reason.

    Restricting posting to real names would thus almost certainly move the debate to the right (or “make it sensible” in some minds) as people with less job security and less wealth are less likely to take the risk of posting an opinion.

    Thinking about it anything that encourages a lack of deference to authority and capital in Ireland is a good thing. It has served us very badly over the last decade.

  70. Bond. Eoin Bond... Says:

    @ Shay

    just for clarity, im not talking about the comments part, im talking about the actual “posts” that start the thread. I’m open minded on the issue, but there are obvious dangers (real conflicts of interest) that would need to be addressed. I completely agree on the “conservative employers” part and the need for some commenters to remain anonymous (not least myself).

  71. David O'Donnell Says:

    No prob with ‘anonymous’ … where would the RRA (roight ranting anonymous) exist otherwise … and what about the regular commenter who craves promotion from MRRA, a mere member, to FRRA which sounds so much better … of course, I have no idea who the Supreme Wizard of the RRA is at the mo (!) who would have to sanction such a promotion ….

  72. Shay Begorrah Says:

    @Eoin Bond

    just for clarity, im not talking about the comments part, im talking about the actual “posts” that start the thread.

    That is a difficult question.

    Firstly it has to be at Philip Lane’s discretion and if I were him I might say no, he has his own view point and might well ask why OMF (or fellow travellers, like me) do not just get their own blogs.

    There are after all sites like the TASC blog, Michael Taft’s personal blog or The Cedar Lounge..

    Ireland is a small place though and it can only support so many blogs, the heavy traffic at the Irish Economy is substantially because Philip Lane and John McHale represent the Irish (and indeed European) establishment consensus economically and its one of the few places a serious attempt is made to enunciate it. The fight is here.

  73. PR Guy Says:

    @Shay

    Gordan Bennett - if some of my clients knew what I was posting on the web my children would starve. I have a very jaundiced view of what most of them get up to and for good reason. Most people in the upper echelons of the financial services sector are not to be trusted. They are sharks in suits.

  74. Bond. Eoin Bond... Says:

    @ PR Guy

    “Most people in the upper echelons of the financial services sector are not to be trusted. They are sharks in suits.”

    eh, isnt one of the main goals of the PR industry to deliberately lie or obfuscate about any particular issue?

  75. Shay Begorrah Says:

    @Bond. Eoin Bond…

    eh, isnt one of the main goals of the PR industry to deliberately lie or obfuscate about any particular issue?

    This is truly off topic but it is Friday and we deserve a break.

    When trying to make ethical comparisons between professions, ideologies and individuals I always turn to America’s finest news source.

    PR firm kills innocent child

    ‘Kills is a Harsh Word,’ Spokesperson Says

    Bank Executives On 15th Floor Gambling On Which Occupy Wall Street Protester Will Be Arrested Next

  76. PR Guy Says:

    @Bond Eoin Bond

    “isnt one of the main goals of the PR industry to deliberately lie or obfuscate about any particular issue?”

    Shoorly shome mishtake there Eoin? You have such a romantic view of the world. Hic! It’s about defending reputations from unwarranted attacks, promoting great communications and building good relationships between an organisation and its stakeholders, etc. etc. You’ve clearly got the wrong end of the stick if you think PR is that exciting!

    I see Juergen Fitschen, Deutsche Bank AG’s co-chief executive, forgot to consult his PR Guy this morning when he said: “Greece is a failed state.”
    He also said that Greeks can’t be blamed for transferring funds (especially to DB of course) and the figures to revive Spanish banks are “staggering”.

    Sadly, today’s PR Guy is more likely to be sitting there trying to write a really boring piece of puff about FATCA to convince its victims that it’s actually good for them whilst dreamily staring out to sea wishing he were on a fishing boat with a cold glass of white wine in his hand on a day like this…..

    One of the benefits of anonymity is I don’t need to lie. They are sharks in suits (with the odd exception, granted). Actually - to be more accurate - they are sharks in suits who are quite good at sums.

    I don’t suppose you know where I can get some free/cheap (members) tickets to the Derby or Royal Ascot do you? I have some stakeholders…..

Leave a Reply