IMF on Ireland: Twelfth Review Under the Extended Arrangement and Proposal for Post-Program Monitoring


152 replies on “IMF on Ireland: Twelfth Review Under the Extended Arrangement and Proposal for Post-Program Monitoring”

It is designed to fail and it will. It is banking resolution but not as we know banking resolution in the US. This is ineffectual “banking union” by slow motion. It will be 2026 before there is even 55bn in the emergency fund. Then, the FT tells us, that there could be 9 committees involved and the casting of 143 votes. This is definitely a case of “too many cooks spoil the broth” and it is broth, there is no meat here whatsoever.

The “Liability Cascade” might mean lead to a cascade of depositors moving their funds out of EU banks and finally, Schauble described it as “a union made of wood more than steel”. Coming from a country that prides itself on designing things that last, we now see that when it suits them, they are willing to throw up any old kind of Pontoon bridge as long as it does not cost Germany money. There is no comfort whatsoever in this from an Irish perspective. Any money borrowed from the ESM remains the responsibility of the national parliaments.

@ Robert Browne

What you say is true. However, the central point is that made by Sony Kapoor.

“The EU had put the cart before the horse by pushing for integration of financial markets, while product, service and labour markets remained deeply fragmented.”

Until there is recognition of the need to correct this, the crisis will persist, banking union or not.

Mario Monti, the author of a (largely buried) report on the Single Market, makes the point indirectly in this strategically/appropriately (?) timed contribution.

One of the most promising aspects of the situation is the fact that cracks are already appearing in the Grand Coalition in Germany with the policy emphasis being placed by SPD ministers where it most appropriately belongs and which should lead to some movement. Merkel seems to think that she is still governing with the FDP.


Kapoor’s naive understanding of the diverse, and institutionally embedded, nature of markets complements your own pristine ordoliberal_illogic in these matters.

Quite the sense of irony…how bout the manipulation off borrowers like Ireland who’s politicians clearly were financially illiterate,plenty low income families and students there,in no small part courtesy the IMF.

“IMF Survey: Finally, Jai, you are leaving the program and the Fund and many people in Ireland are interested to hear about your plans.
Chopra: My involvement with Ireland over the past few years has been the capstone of a three-decade career at the IMF. This experience, together with other stimulating work I’ve done over the years at the IMF, motivates me to stay engaged in economic policy analysis and advocacy, but in a different setting here in Washington, D.C. I am also interested in doing volunteer work on financial literacy with low-income families and students. The manipulation of borrowers leading up to the crisis demonstrates the need for improving such literacy.”

Seems NAMA believes an extraordinary attack on the State is being orchestrated by unknown villains.
The only one I can see this morning is Mr. Borrosso attacking Ireland. We caused the euro crisis according to some reports. Didn’t take long to go from best pupil to dunce.
I suppose we caused the downgrade by S&P.


The only one I can see this morning is Mr. Borrosso attacking Ireland. We caused the euro crisis according to some reports.

RTE has already, Der Orddosturmer style, changed their headline to something less disrespectful of our EU masters but the Irish Times has a taste of the new Euro consensus.

According to Barosso.

In fact it was the Irish banks that created a big problem for Ireland but also the other countries in the euro area.

EMU did not fail us, we failed EMU. Blaming the victims has never felt so good! Its frankly the European thing to do.

Now Barosso, like Rehn, is a buffoon, and someone who might have mixed feelings about whether Salazar was such a bad guy really, but he is also an ambitious man with a feeling for the locus of power in the European Institutions. You don’t need to be a weatherman to know which way the wind is blowing.

So first they came for the Greeks, and we did nothing, then they came for Cyprus (and we actually collaborated in the attack) and now we get our just desserts for not trying to confront the Deutsche-bloc and ECB. Difficult to spin this other than as a reward for cowardice.

If you are loyalties are to European Institutions and not Ireland it might be a good time to make travel plans. Bondholders might not get haircuts but when the hoi-polloi realize just badly they have been sold out there might be some less figurative hair cuts dispensed.


your “cracks […] in the Grand Coalition” are where to be seen?

Shay’s wording for Salazar is definitely worth to be noted.

Irish CDS data were higher than the Greek until 10/2009, when the Greek accounting mess blew up, in case some folks forgot.

More than 100 basis points higher in February 2009, and very close to what some people see as the real IMF intervention trigger.

It was the stupid move of the Republic of Ireland 9/28/2008, which made people realize the mess.

Please no “Dolchstoss legends” here.

Barroso reminds me of David Brent in certain kinds of light. The ez crisis was driven by the absence of bank recap, no credible LoLR, no deposit insce, no emergency planning, complacency, institutional panic and political incoherence. Most of those factors are still highly relevant. The pixies will not get their money anyway but there is far more to it than that.


And you have credible evidence that no threats were issued by Trichet in September 2008? And that the same Trichet who was quite exercised about the prospect of singed bondholders in 2010 and in 2011 really just had no opinion on the matter in 2008?

If you have credible evidence, please be so good as to present it…

Ernie, it is for the Irish side to convince the outside world, not the other way round.

You should be encouraging the Irish authorities to get on with it, if you believe there is a sustainable case.

There are two different audiences:

Domestic – politics, spin, deflection etc.

Overseas – convince them and you likely get your, probably partial, refund.

Many foreigners believe it is telling that the Irish authorities seem content to leak selected bits and pieces to on-side local journalists, thereby achieving a particular view domestically, while not making credible efforts to convince the not pre-converted outside world.

@Shay, John
It’s gets more bizarre. Enda says no row with Barosso. If he allows this to remain on the record unrefuted then we will suffer more reputational damage.
It’s getting a little unChristmas like out there.

@ francis


There are, in fact, some similarities between coalition politics in Ireland and Germany because a party of the left and the right make them up. The SPD has no intention of being the fall guy on this occasion as it was at the end of the last grand coalition.

@ All

On the most recent contretemps with Barroso (he must be seeking a third term!) Ireland has a case. However, the utility of constantly repeating the refrain “are we there yet, are we there yet?” must be open to question, especially if two different issues are being confused by an inept Irish media viz. the role of the ESM in (i) closing down insolvent banks in the future and (ii) direct re-capitalisation of banks (which by definition assumes their continued solvency).

Merkel’s bright idea for contractual reform contracts seems to be foundering. Consideration is now delayed until October and Merkel at her press conference laid stress on the desire of Van Rompuy and Barroso to continue the approach and her intention to fight the good fight i.e. subtly implying that it was not her own sole idea. The problem with it is the rather obvious one that the reform process, as Monti points out, must apply to all countries, or, as Sony Kapoor put it;

“The single most important lesson from the eurozone crisis has been the urgent need to minimise this gap between an integrated financial sector and a fragmented real economy. This was the driving force behind the report on the future of the single market by Mario Monti, the former Italian prime minister, which has now disappeared from sight. The banking union brigade has sucked the oxygen out of all discussions on renewing the single market, service sector integration or improving labour mobility.”

The Lithuanian Presidency struck a blow in returning some oxygen to the debate in the matter by achieving agreement on a new regulation on free movement. on posted workers, which should help take the heat out of a burgeoning discontent in some countries.


the page 72 “Langjährig Versicherte, die durch 45 Beitragsjahre (einschließlich Zeiten der Arbeitslosigkeit)” is a classical UN SC resolution 242 thingy.

Nobody is talking a general change of the retirement age to 67. In reality this is just a tiny tradeoff for a small group.

The rental insurance agreement is the bigger thing. What it does, is from my view at the output actually OK, but is it rule conformal? The courts will find.

Sometimes I think you actually need such little stuff, that the harpies of each side can bang away a little bit.

You should have seen von der Leyen and Nahles, like best friends forever.

Nothing to worry about, as far as I see.

@ DOCM: “There are, in fact, some similarities between coalition politics in Ireland and Germany because a party of the left and the right make them up.”

Are you sure about this Left/Right thing. The Irish Labour Party [ILP] was barely socialist for most of its post 1922 existence. Sure, they had a few dips into the cold left, but promptly hopped back into the ‘right’, warm (more votes) bed.

If the ILP were a truly socialist (well in Irish political terms) party, they would have never entered a coalition with Fine Gael. We do not do Grand Coalitions in Ireland. The Labour Lads are there for the ‘spoils of office’ – and make no mistake. Policy be damned!

The insolvent Irish banks should have all been liquidated in 2008. And no, the sky would be still up there. But a lot of arrogant folk would have got their P45s. And we would now have simplified, bog-standard domestic bank – which is all we actually need. The whole ‘debt’ thing is now moot – apart from the sickly PR pap that we are being asked to swallow.

Unless, and until (or maybe never!) the bulk of the accumulated debts are simply written off – with no LOLR, there will be no exit. The idea that we will ‘grow’ our way out of this debt mess is obsessional and delusional. It simply will not, and cannot happen. There will never be a sufficient number of well-paid, waged-labour employments available. “They’re gone! And when they’re gone, they’re gone!

What was/is the ratio (for Ireland) of Full-time waged-labour employees versus the Working-age population for 2007 and 2013? Anyone got these figures? Median wage values?

Whatever about Borossa, at least he got one thing correct – our politicians were, at bottom, responsible for the mess. And not just FF. Go back and read the FG and ILP election manifestos. They were very eager beavers in the spending of borrowed funds department.

Thanks. Strong stuff…”systematic looting of the plaintiffs assets”
Forum? Orchestrated?

@ DOCM: “Mea culpa! Would centre left/centre right be acceptable?”

Yep! Same coin! And, yes it is. But that’s no hindrance.

Nifty plot. Bit logarithmic that last bit. That was then, but this is now. The Financialized economy was a mere decade old, but its in forties now. And we have burned through all of the ‘easy oil’. Oh! And Chindia – with its billions of little unemployed folk. But I hear tell they are substituting them with robots. Hey, but that’s progress for you!

Were we using Punts then? Yep! I thought so.

“However, there is disquiet in European circles that recognition for Europe’s solidarity was not more prominent as Ireland left the bailout. “There is frustration in Brussels that the Irish Government has not properly recognised the fact that Europe was asked to step in to solve an Irish problem, created by the banking sector, and at all times has shown support for Ireland,” said a senior EU source. ”

To the senior EU source:

There is disquiet in Ireland that the support for ‘Ireland’ was conditional on it going directly to pay all bank liabilities (incl Trichet’s favoured bondholders), with the bill going onto the sovereign balance sheet.

There is disquiet in Ireland that a cast-iron policy of supporting bondholders, has now become a cast-iron policy to burn bondholders.

There is disquiet in Ireland that ‘Europe’ support came with a moral hazard interest rate of 6%.

There is disquiet in Ireland that the new ESM, into which we will pour some more billions will be used to bail out politically favoured banks in politically favoured countries.

There is disquiet in Ireland that banks losses are now to be propped up by the sovereign, whereas banks profits must be reprivatised post haste.

There is even disquiet in Ireland, in some places, that we have not rid ourselves of this cursed euro, that has been badly constructed, badly managed, and will drag the continent back into conflict before it is finally consigned to the waste paper basket.

Of course there is no doubt we needed saving from some Irish bankers, politicians, regulators etc. Whether we needed ‘Europe’ to do the saving, or whether that saving should have been done within the euro zone is a different question.

But not be be too churlish about it and to paraphrase Dermot Morgan,
Thank you very very much Mr Barroso,
Thank you very very much Mr Trichet,
Thank you very very much Mr Rehn,
Thank you very very very, very very very, very very very, much.

@ Brian Woods Snr/ Thomas Malthus 😉


workforce, full-time employees and ratio

2007: 2.240m; 1.376m; 61%

2013: 2.182m; 1.123m; 51%

The CSO provides median pay data irregularly.

In 2007, the median (the level where half a sample is above and half below) hourly pay for the private sector was 14.77 and 22.39 for the public sector.

In 2010, the median pay for private was 15.82 and 23.56 for public.

Average hourly pay was 19 in the private sector in both 2009 and 2013 while public pay was 30 and 28 per hour.

@ MH: Much obliged for the update. Somewhat sobering.

Rev Malthus??? GC has me down as a Hobbit!!! Though to give TM his due, he did get it right – even though the poor chap was perhaps a tad carried away, and a bit previous. Morgan Kelly comes to mind.

Best wishes for the holidays, and thanks for those informative posts.

@ DOCM. Seasons greetings, and all. “You can’t be serious!”

“The global financial crisis began in 2007 with problems in the United States …”

Nope. Its a tad more complex. But we’ll let this go.

“Ireland is simply too small to bring down the continent single-handedly.”

Really? The Continent no less!!! I thought we were discussing the EZ. OK, we’ll let this one go as well.

“It is also a fact that Europe’s inept interventions made our problems worse than they needed to be … …Europe’s insistence that the last government repay senior bondholders was a mistake.”

So Europe is now being endowed with anthropomorphic characteristics. Wonderful stuff! Would this jerk please get real and NAME NAMES. It shure a hell was not the pixies! A mistake. Jeeze that’s rich!

“Still, while Mr Barroso went too far, his tantrum does contain a kernel of truth and reflects the reality many people in this country fail to accept, that the bailout was an act of solidarity that followed a request from a democratically elected government.”

Oh, its a tantrum now, is it. That’s an ad hom – yes? An act of SOLIDAITY. Sweet divine!

“Mr Barroso was illogical and childish to blame so many of Europe’s problems on Ireland but he showed no more stupidity than those politicians and voters here who blame so many of our problems on Europe.”

Europe’s many problems – which would be?

This is poxy, AAA+ grade crap!


those who make allegations, have to bring the evidence, and not the other way around.

And to ask for proof of non-existence, that was hilarious.

John Gallaher,

I read the case. I am not familiar with US financial court habits.

But the Flynn family invoking RICO, with lines like “conspiring with the Irish government” sounds pretty drastic.

Do they just fly a balloon, to smoke them out about 12 m + treple + lawyers, lets say 60 m, or is this way more common in the US?

@francis,terrific summary so WTF they doing lending money below market?
You do know the “irish” are a rather ungrateful bunch,given that all they have done since “independence” is manage the decline of English institutions. The level of graft is truly breathtaking.
Oh and endlessly hopelessly promote a dead language which naturally has the exact opposite effect of the intent.

@francis,sorry was actually just writing to you our posts crossed.As I often say it’s “complicated” to directly answer your question,there are PG’s or Personal Guarantees on the line.
Two main types off commercial loans,recourse or non recourse.
In non recourse in event of default lender gets the asset-the end.
In recourse it’s “personal” the borrower has given a personal undertaking to honor the debt and any shortfalls,willing to utilize any and all resources available to make good on its obligations.
However if the lender say acted fraudulently,then the PG may not be enforceable.
Feel free any follow up questions,I’ve read most these cases and quite a few others similar.

@Gavin, Joseph

On the Irish reporting of Barroso and his spokesman – there is an interesting counter-spin via RTE which reminds me of some of the technical obstacles I raised a couple of years ago.

[this post fell foul of the two link rule so will post rte link seperately]

“The framework agreement also specifically stated that “retroactive” recapitalisation could be a possibility “on a case-by-case basis”, sources say.

Sources also point out that such a move could be done under Article 19 of the ESM treaty, and that therefore the ESM’s charter would not have to be changed, although it would have to win the unanimous support of all 18 eurozone countries, including the approval of five eurozone parliaments.”

Now Article 19 allows Articles 14 – 18 to be altered. That means the facility contained therein to lend money to a state so it can recap its banks could, theoretically, be altered to allow the ESM to directly recap a bank. That’s true. Its effectively been done to allow in principle, future direct recaps, see:

Journalists should read the whole document, but here are extracts:

“Following the 29 June 2012 statement by the Heads of State or Government of the euro area reaffirming the need to break the vicious loop between banks and sovereigns, the Eurogroup has worked intensively on the operational framework of the future ESM direct recapitalisation instrument. The main features of the instrument are now agreed in view of having the instrument
operational once an effective Single Supervisory Mechanism is established….

…To ensure the most efficient use of ESM resources, the ESM will assist to directly recapitalise only those institutions whose viability can be secured through a capital injection and restructuring plan. [ie forget about IBRC]…

A robust valuation
Before any final decision to grant financial assistance and capital injection, a thorough due diligence and rigorous economic valuation, based on a sufficiently prudent scenario…

…It is imperative that the ESM safeguards its resources…”

Article 19 itself does not allow Article 20 to be altered, but Article 20 specifically allows the Board to do so. So theoretically still a go for retroactive recap.

Pricing policy
1. When granting stability support, the ESM shall aim to fully cover its financing and operating costs and shall include an appropriate margin.
2. For all financial assistance instruments, pricing shall be detailed in a pricing guideline, which shall be adopted by the Board of Governors.
3. The pricing policy may be reviewed by the Board of Governors.”

But note:


Investment policy

1. The Managing Director shall implement a prudent investment policy for the ESM, so as to ensure its highest creditworthiness, in accordance with guidelines to be adopted and reviewed regularly by the Board of Directors. The ESM shall be entitled to use part of the return on its investment portfolio to cover its operating and administrative costs.

2. The operations of the ESM shall comply with the principles of sound financial and risk management.”

So the price paid for Irish bank shares in an ESM retroactive recap would have to be “prudent” and not negatively affect its creditworthiness. The board can set guidelines, but there is a strong implication that those guidelines must be consistent with prudence.

Also 2) appears to specifically require that any retroactive recap “shall comply with the principles of sound financial and risk management”.

This seems to be at odds with the idea of deliberately buying shares in an Irish bank at a price which is way above fair value – which, from the Irish perspective, would be the whole point of the exercise.

Whatever about getting all the ESM states to agree to use Article 19 to insert the theoretical capacity to retroactively recap, getting agreement to do so either in bankrupt IBRC or on a clearly uneconomic basis in the other banks, would seem to be something else.

The Irish government does not yet seem to have convinced the other ESM contributors that they forced Ireland to act against its own interest and should use the ESM to apologise.


You’re repeating yourself.

There’s ample evidence, all of it circumstantial because the people involved are either dead or refusing to release any documentation. And why do you think they wouldn’t want to release any documentation? To allow gullible rubes to continue to believe whatever it is that suits their prejudices and interests.

It strains credulity to believe that Trichet in 2008 really didn’t give a shit whether Ireland burned its bondholders (but gave an enormous shit whether they did in 2010).


Tried to post a festive Euroscrooge note fao JR &, GK but the blog’s resident gemlin has run off with it.

Of course you have evidence of this “truly breathtaking” level of graft. Or are you just hyperventilating again. Graft in Ireland is below normal. For example, if you had 300k resting inexplicably in your account you would probably be removed from office. In Germany it seems you can continue to hold office.

Very clear report….as usual. Interesting the GDP diagram under Remaining challenges, where Ireland and the UK “match up”……seems to imply that Ireland is benefitting from what’s going on in the UK…..and the positive US GDP data yesterday must help also.

Lack of structural reform is disappointing, notwithstanding fiscal consolidation discipline……Troika driven as opposed to anything done by the Irish Govt. As Dan McL pointed out previously, the forward figures also include significant further adjustment in structural deficits, in quite a short timeframe (2015).

The same ole problems persist…..unemployment, threats to growth, mortgages of course, bank solvency.

Certainly didn’t foresee yesterday ‘s better GDP numbers… the overall picture remains “a grind”. 200pc private debt level is very conspicuous, still.

Still, it could be much worse.

Public debt sustainability – great update diagram and analysis. All depends on growth and that any shock will be reasonable. That’s clear (again).


Trichet in 2010 was to Ireland as the monster was to Dr Frankenstein after application of the electrical charge.

In 2008 if a bank had gone bust, like banks had gone bust before, and creditors had taken losses, just like they had before, Trichet would have looked like an idiot jumping up and down trying to convince the financial world that all the bond holders should be bailed out.

Ireland was his, and the banking industry’s enabler.

@Tull,assume you taking the p**s…

“For example, if you had 300k resting inexplicably in your account you would probably be removed from office. In Germany it seems you can continue to hold office.”

“Lowry is a former Chairman of the Fine Gael political party and was Minister for Transport, Energy and Communications between 1994 and 1996. He resigned his ministry in some controversy, and Fine Gael barred him from standing again. Thereafter, he ran as an independent candidate and has maintained his seat in the Dáil ever since. The Moriarty Tribunal concluded “beyond doubt” that Lowry was a tax evader and had assisted businessman Denis O’Brien’s consortium Esat Digiphone in acquiring a lucrative mobile phone licence in the mid-1990s, during Lowry’s time as Communications Minister. O’Brien went on to become one of the richest men in Ireland.[2]
Lowry has also launched a defamation lawsuit against Irish Independent journalist Sam Smyth, over an article Smyth had written regarding the Moriarty Tribunal as well as comments Smyth had made on a TV3 show. The defamation lawsuit was thrown out of several courts and Lowry was ordered to pay Smyth’s legal costs. In more recent times his relationship with Kevin Phelan has come under scrutiny, with the emergence of a recorded conversation in which Lowry claims to have made an undeclared payment of €250,000.”

I should add that it never ceases to amaze me how official stress scenario analysis dor public debt sustainability now openly show how Ireland might get to debt /GDP of 139pc by 2015. It was only as short ago as 2012 that Official Ireland were assuring everyone that the public debt top out would be 121pc. Nobody seems surprised on concerned about this “drift”….seems people have become immune.

MH @ 10.50am
Very enlightening. The quality of recent Irish employment gains is very worrying. The reliance on public sector employment (and hence borrowing) to keep things going is hardly encouraging.

I should mention also that I find the IMF’s refs to contingent liabilities as something to watch. It is a major item that they simply do not deal with. Surprising that this is the one area whether they do not address the issues….further significant bank provisioning, public pensions, etc.

And DO’B owns half the country now……and remains in the FG fold.

Let’s see what the NAMA stuff turns up also…..a good friend realtor of mine in North Dublin alludes to how depressing it is to see all the collusion around the handout of NAMA construction project proceeds…..all sorts of crap and graft going on.

And then, all the top-up stories, as of late but also going back many years also (Union slush funds, corrupt but not sanctioned politicians, etc.). Nothing much to be proud about……and the lack of real reform remains shameful.

You pulled one incident from the 1990s. The pol in question has never held ministerial office since. To justify the term you used, I would have expected loads of examples of corruption up until the present day.
Every democracy has isolated examples of corruption, Ireland included. But your claim implies outlandish levels, I will let you stay up all night compiling examples.

@ Ernie,

the central difference of before 9/28/2008 and after, and why somebody like Trichet should care, was that the Republic of Ireland signed into law the full backing, making a default a default of the Republic. You did it. Pretty easy and logical.

@ Tull
Do you care to expand on some vague 300k in some German account?

What I see in the moment is, that we apparently prosecuted ex – el Presidente Wulff over a whopping 719 Euro for an Octoberfest bash, he should have been aware off, that somebody else chipped in.

On similar occasions I have chipped in, a quarter century ago, as a student, a 50 or 100, I dont recall.

The broad sword of justitia has two sharp sides. We might go after the prosecutor and his boss : – ) For the 4 Mio damage this process has cost.

With a standing coalition, it is chopping heads season, von der Leyen fired the CDU eminence grise in defense,

SPD Gabriel keeps the FDP intimus and praises Rösler

Your MOF and an arms dealer. Oh and before that back in the 1970s, FJ Strauss and Lockheed. That was epic.

@Tull…Two link limit but shur I can go all night if ya like:)
“Liam Aloysius Lawlor (1 October 1945 – 22 October 2005) was an Irish politician who resigned from theFianna Fáil political party following a finding by a party standards committee that he had failed to co-operate with its investigation into planning irregularities, and subsequently came into conflict with the Mahon Tribunal.”


The European Commission this month published the Eurobarometer Report on ‘Attitudes of Europeans towards Corruption’ which presents the findings of a European wide survey on perceptions of corruption. The report found that 86% of Irish people surveyed think that corruption is a major problem within Ireland and 70% think that government’s efforts to combat corruption are not effective. These findings highlight the need for increased anti-corruption strategy and action saysJohn Devitt, CEO of Transparency Ireland:

 “One of the reasons why people in Ireland continue to think corruption is a major problem is because the ongoing financial crisis has had a deep impact on their lives.  It is evident from the last decade that successive governments haven’t done enough to prevent, detect and prosecute corruption. This survey’s findings reflect the public’s overwhelming frustration over the government’s failure to fight corruption and white collar crime in particular. For example, we still have seen no prosecutions from the current investigations into Anglo Irish Bank and the last Garda annual policing plan did not even mention white collar crime. The government needs to prioritise the fight against corruption and to resource and equip our law enforcement agencies to tackle it”

trying to pretend to get this back to topic : – )

I can actually imagine that the IMF guy for Ireland would have liked to stay on the job a little longer.

Intelligent people, who just screwed up a little bit, but not really corrupt (how do the Irish numbers compare to other countries, where is Michael Hennigan, when we need him? : – )

And who actually keep to plans and agreements. That is not like Greece, Italy, or the GOP.

btw, Bayern scored first in 7th minute in Casablanca, would be 5th title in one year

Yet the same organisation ranks us 21/177 – hardly at Afganistan levels. No doubting we should aspire to better. And we are a hell of a lot better than 25 years ago when Paul w was in his youth in Howth. I bet his Norsie auctioneers know a few war stories about CJH, Rambo and one or two others.

Do you think the data support your hyperbole, I note we rank 6th in the EZ. Not bad, not great. But this country is not the cesspit of corruption that some internet warriors like to make out. It has flaws in governance but so does everywhere. BTW, the good old USA is 19th. That ain’t a cesspit either.

Not much better, really. In CRE, it’s basically the same groups of cute hoors involved…..John is right when he alludes to the fact that the people managing eg NAMA are far too close to both the debtors and the buyers of debt. It’s simply not possible to avoid conflict in such (many) instances. There has been plenty of brown paper bags in recent years…..many involved will /claim that they had to do so to survive….that’s ok so.

On collusion, these same people are great at the obscure. Nothing in writing, all nod and wink. So guys have received valuations to order (when there was no mtm), cash was passed and shared under the table by guys selling off assets before NAMA /others got them, the access to and sharing of NAMA construction cash is being orchestrated by groups benefitting……There was a good example of a public council meeting in south Dublin at the beginning of the crisis where a developer stuffed the meeting with supporters and proceeded to get a planning permission in his favour by threatening the council with litigation, etc. you’ll never see that collusion in writing though.

Or another example in the last year where one of the very large US PE firms was given an exclusive viewing of part of AIB’s corporate loan book (life sciences, technology)…how do I know? Some that firm’s senior team were openly boasting at a reception in NYC how the Irish Govt had insisted on their being given the access. Totally illegal if true.

By the way, the same group also had exclusive access to the best of NAMA’s CRE book.

In the end, I didn’t hear that anything got done. PE is PE…..

That’s not the point though…..and neither is how Ireland ranks versus elsewhere.

I’m dealing with corruption /crap in Spain right now……In Spain and France, law is changed in favour of the native insider…..However, at least one knows that.

I was surprised when it was stated on Bloomberg that customers have no recourse to Target if their money is stolen, notwithstanding that the card info is in Target’s care,

Generally though, the US consumer is generally well cared for, such is the competition. One can return goods bought with zero trouble, with full refund. In Ireland, best one would get is a store credit note…invariably though, in Ireland the consumer would be stiffed….tough luck.

Of course, the one area where Ireland’s lax governance and corruption has shone has been in the lack of white collar crime punishment.

Corruption in Ireland since 1922 was quite normal/legal at all three levels of politics under the guise of campaign contributions, “a little bit for the cause” or “a little for your trouble”. We wield euphemisms with gay abandon.

That all changed in the HEE HAW era and got measurably worse (greed and selfishness) during the Tiger era. It went beyond politicians and the veneer of legitimacy to barefaced, bald, brazen bribery of bureaucrats at the Tiger peak. The politicians were getting nervous and required written recommendations from bureaucrats. You would be told I would put in a good word for a deserving person like yourself but I need such and such onside before I can act. You would never be told to pay the fecker but you would be told to get on his good side.

The whole exercise was in accordance with the ten commandments and if it was not there was always Saturday night and Sunday morning. Everything had to be acceptable within the culture, no Sicilian shakedowns, strongarm tactics or overly large sums. HEE HAW erred in stretching the culture of corruption beyond the norm and paid the price.

We are no India, Nigeria or Mexico thankfully. The other Irish peculiarity is you could only do these things with people you trusted, which meant families you have known for three generations. Obviously the Dubliners were not observing the know your client rule.

Only Target US is affected. Your contract is with the Credit Card Issuer usually VISA, MasterCard or AMEX. Their advice is to monitor the transactions on your card frequently. My advice would be to report your card missing immediately and chop it up and burn at least half of it. Within a week you will have a new card.

It is known that the affected card numbers along with personal details are being sold in batches on the Internet. Rather than risking protracted negotiations with your card supplier it would be advisable to succumb to your first instinct which is to close it down. That is what I do.

ARS Technica has a good article on Target Credit Card fiasco.

I would love to know more about the links between the fella who pays Martin ONeill’s salary and the pols but the libel laws are way out of date.

Agreed. It still continues unchanged is the point.

Different manifestations of the same though – a year ago, a PWC Dublin partner castigated me when I mentioned the dangers of public debt approaching 130pc potentially based on the IMF 8th review. His attitude was that “everyone is borrowing more so we are too”….and sure what the heck, it didn’t impact him or his family, so why should he care….? What could he do about it anyway? Also, most of his business friends were doing fine…..even a friend selling 2nd hand cars. So f*** the whingers.

However, that belies the institutional betrayal of the public debt situation….the 12th review now allows for a worst case 139pc debt /GDP. When we get there, we’ll be told that the turn in trajectory is just around the corner. And the current Govt managers will be retired comfortably in the next few years anyway.

There’s a lot of truth in that if one was to be honest about the situation.

Bring on Fitz’s and his buddies’ trials is all I can say. It will be interesting what official conversations will emerge to throw light on the (hard and soft) institutional corruption in the country.

@Mickey this is the website that broke the target story,the banks here monitor your spending patterns.In fact if you don’t advise them off travel or say a day off retail therapy it can get a bit awkward….specially if you trying to impress someone!
In the better restaurants if your card declined they never bring your bill and declined card back,forcing you to go looking for the waiter …but avoiding any table side sniggering…or so I hear.

I wonder who will pay for Seanie’s legal team……? And why now would anyone pay for that I wonder? Goodness of the heart? It will be interesting to see these things emerge (soon).

@ Brian Woods Snr


@ All

I regard the snub by Kenny & Co to the European Commission as petty (more on Petty below).

The European Union was slow to recognise the impact of the developing debt crisis in the peripheral members of the single currency area and policy responses were piecemeal. However, the European Commission had been an advocate of Ireland’s demand for lower bailout interest rates and the rescheduling of the Anglo Irish Bank/ Irish Nationwide promissory notes that had been used to mainly fund depositor bailouts.

Eaten bread is soon forgotten and just in quantifying one aspect of the gains since 1973, in net terms, Ireland has neither contributed a penny or cent to the EU budget in 40 years! – I know that’s as a result of the rules applying and blah-blah but still…

When President Franklin D. Roosevelt was running for reelection in 1936, he commented on the ungrateful business critics of the New Deal:

“Do I need to recall the powerful leaders of industry and banking who came to me in Washington in those early days of 1933 pleading to be saved?

Most people in the United States remember today the fact that starvation was averted, that homes and farms were saved, that banks were reopened, that crop prices rose, that industry revived, and that the dangerous forces subversive of our form of government were turned aside.

A few people- a few only—unwilling to remember, seem to have forgotten those days.

In the summer of 1933, a nice old gentleman wearing a silk hat fell off the end of a pier. He was unable to swim. A friend ran down the pier, dived overboard and pulled him out; but the silk hat floated off with the tide. After the old gentleman had been revived, he was effusive in his thanks. He praised his friend for saving his life. Today, three years later, the old gentleman is berating his friend because the silk hat was lost.”

As an antidote to boredom during the holidays, anyone who hasn’t an Economist subscription, should buy the double Christmas issue, which has its usual interesting eclectic mix.

One piece is on Sir William Petty (1623-1687) who is credited as the inventor of economics. He and his family are associated with two contemporary Irish 5-star hotels: Sheen Falls Lodge amidst the Kerry lands gifted to him for services as Oliver Cromwell’s physician general and later surveyor general of Ireland. Petty’s great-grandson, the Dublin-born William Petty-Fitzmaurice, 2nd Earl of Shelburne (spelt slightly different to the hotel name) and 1st Marquess of Lansdowne, became British prime minister in 1782.

Morning grumpy and Joseph

Colm McCarthy has a good lash at the issue here:

‘Back off Barroso, you did very little to help’

I read a good image recently of why things always seem tricky in a democracy, which is, it is like a group of people trying to navigate choppy waters to get to some destination. If you concentrate on the horizon all the time you know where you want to be but you might get capsized by an unexpected wave; but if you look down all the time you may stay afloat but find you are headed in no particular direction.

My view, very crudely, is that in Europe I would like to see a financial system that is subordinate to the public sphere. So although there is much to be said for the particular case of Ireland and shifting the bank debt to the ESM in some way would be a step forward for the country and would serve justice*, I’m not happy with bank debt going to citizens across Europe at all. I agree with David O’Donnell about all that.

So although the planned new Single Resolution Scheme does look like an awful mess, and it certainly is not what Draghi was looking for, at least there is a bit in it that says the banks will start to save up to pay for losses within their own system. But it is very little and the pot they’re building seems very small compared to the losses of the last few years.

If David’s reading as a European socialist, what are the hopes of ‘more Europe’ not just meaning more neo-liberal agenda? The banking system is said to be fragmented with decisions at the centre not reaching the periphery. Is the voting system fragmented the other way around, with votes from the citizens not affecting decisions at the centre?

* I think so from the views and scraps we have. But I take you points about the lack of clarity. Last time I checked, at the local level, Trichet said he thought he’d rather not answer questions and have Honohan go in as Frankfurt’s man in Dublin. McCarthy thinks this could be taken up in a legal setting at European level: we are talking about an awful lot of money and the question of whether a Central Banker imposed fiscal damage on an unwilling sovereign.

Can we demand the same evidentiary standards of you that you demand of everyone else. I assume you will be trotting down to Store St, with all that stuff today .

On corruption, it has been an insidious part of the culture overtime rather than comparable with more ostensible systems that are evident elsewhere.

Daniel Patrick Moynihan, US senator for New York 1977-2001, wrote in the 1960s that “New York was perhaps the first great city in history to be ruled by men of the people, not as an isolated phenomenon of the Gracchi or the Commune but as a persisting, established pattern.”

The Irish democratic experience reflecting the influence of Daniel O’Connell’s campaigns in the Old Country, was impressive. However, Moynihan said trading favours were the hallmark of Tammany Hall rather than good government.

“The Irish managed to make it somehow charming to steal an election—scoundrelish, rascally, surely not to be approved, but neither to be abhorred. This, it must be insisted, is something they learned from the English. Eighteenth-century English politics in Ireland was as corrupt—in Yankee terms—as is to be imagined.

In 1930, the Irish hospitals’ sweepstake, a horse-racing based lottery authorised by the Irish Free State, with a member of the first government among the promoters, was targeted at Irish Diaspora markets where its activities were illegal. A year later, Eamon de Valera established The Irish Press newspaper and even though about $250,000 had been collected in the US including some funds that dated back to the War of Independence, the Irish Americans were issued shares in a Delaware corporation while de Valera himself secured purchasing control of 43% of Irish Press Limited for a sum of $1,000.

Joe MacAnthony, the crusading journalist, who authored a famous investigation of the Irish Sweepstakes in 1973, wrote that The Readers Digest described the Sweepstakes lottery – in the US edition which never circulated in Ireland – as “The Greatest Bleeding Heart Racket in the World.”

On winning power, De Valera introduced the Irish American machine politics system in Ireland and the Land Commission was used to distribute land to supporters while land rezoning was the only real power left with county councillors. During the boom, almost half the membership of some councils were involved in commercial property activities.

Conflict of interest has been a strange notion and MacAnthony was frozen out of the Irish media including RTE, about the time the Independent Group was sold and the Irish Times shareholders cashed-out, ahead of the coming into law of the first capital gains tax. With the recession that followed the quadrupling of oil prices and 22% inflation in 1975, The Irish Times was in deep trouble because of the loans that were raised to convert itself to a charity.

Did I come across some coverage of charities recently? 😳

As for the Government authorising a lottery system to operate in countries where it was illegal, this evokes the massive facilitation of tax avoidance, methinks.

@Grumpy / Gavin

re ESM

‘Grumpy’s article 22 (ESM) has, for me, punched a large hole in the government windbag strategy re ESM funding being the new croc of gold that will transform all our lives.

With IBRC ruled out on the basis that it is a dead bank, and any pari passu equity ruled out (article 22) in the case of other banks limping towards the ESM, the value of ESM to the citizens of this country, rather than closure/ resolution is very dubious indeed.
So dubious, in fact, that committing State funds to such an EZ institution makes little sense from an Irish perspective. [My understanding is that we have given a commitment (PN!!?) to contribute funds up to 11 billion!!!]

In fact it seems that in order for ESM to apply Article 22, there would have to be a resolution of sorts, to displace existing equity holders (Ir Govt) first, then unsecured bondholders (long gone), with a tussle between secured bondholders and depositors as to how much of a shave each will get. It is only by such an ex ante mechanism that the ESM can ensure that its funds are ‘prudently’ invested.
The ESM is clearly not intended to be an Irish version of Fóir Teoranta.


“My view, very crudely, is that in Europe I would like to see a financial system that is subordinate to the public sphere. ”

Very well put, and nothing at all crude about it. If, both EZ and Ireland had started out the ‘crisis’ with that simple guiding principle, all of Europe would be in a far better place right now.

Perhaps the new ‘fund’, to be garnered from a levy on banks, is a small start in that direction. Indeed, Ireland’s objection to the proposed FTT bemuses me, notwithstanding that there could be issue with the UK opting out of it.

Do Ajay Chopra’s comments or those of Ashoka Mody re Ireland not being allowed to haircut bank bondholders, give you any pause for thought re whether the Irish State was ‘forced’ into creditor preferences not consistent with common sense, financial prudence, or the national interest, in Oct/Nov 2010.

I certainly agree with Colm McCarthy re taking a case to the ECJ re whether the ECB was within its rights to mandate who should be paid and who should bear the cost of paying.

I would also also question whether the ECB has a legal or indeed moral (don’t laugh) right to retain profits made on the State bonds of Ireland or any other country. Fianna Fail has put a figure of ~500 million on this. I would have thought that the profit element, based on purchases of ~20 billion of Irish bonds, would be closer to 2 billion.
That is not small change either, to Ireland at least.

Thank you Colm McCarthy for your piece in the Indo today.
About time an economist of great substance called out the ECB/ Trichet/ Barroso etc…..
Won’t go down well with our ‘stockholm syndrome’ public service mandarins…

@John Gallagher
Great quote from your link….
“Still, I suppose the President is simply following the standard Eurocrat narrative: problems come from nation-states, solutions come from Brussels. This is, after all, the man who recently argued that national governments tend to get things wrong precisely because they are democratic”

I wonder if Portugal is responsible?

@Fiat,this was back in the day,the bigger question that the Irish side always ignores is who pays and why ?
Some mythical white knight…Santa ?
We call it buyers remorse,there is NO,none zilch retroactive recapitalization of the totally absolutely knackered irish banking sector,whining like girls about getting mugged ain’t changing that.

You are a bit hard on our pillars. One is worth 60b and the other is worth 8.5b
I know…a bit dodgy looking but should remain standing…look at all those pillars in Greece …still standing thousands of years later.

@ All

Link to the article by Colm McCarthy. (One assumes that he did not write the headline).

Ireland, both establishment and electorate, has a deserved reputation, even after 40 years of EU membership, of seeing membership of the EU almost exclusively in terms of what can be got out of it. Barroso, for the second time, would not have gone OTT were it not for the fact that he is fully aware that this opinion is widely shared across Europe.

In the matter of bank recapitalisation, the media/commentariat in Ireland failed to distinguish between two “different processes” , as the Taoiseach put it, and concentrated on the domestic political implications of progress, or the lack of it, to the exclusion of everything else. (It could hardly be blamed for the latter, as this is what the government was doing).

The general debate also fails to recognise two essential points (as made by John MacManus of the IT on RTE yesterday) (i) the senior players in the institutions in Europe are politicians not public servants, but acting within the remit of the institutions they direct and the mandates given to them by the member states and (ii) these states will act to help Ireland when it is in their interests to do so; sentiment, fair or unfair, does not enter into it.

Ignoring these facts equates to constantly leading with one’s chin and simply results in a sore jaw. (It will be interesting to see when next a question is posed, prompted by some editor who cannot see further than the domestic political bubble, to some European or international notable or other in the matter of bank recapitalisation!).

@ JG

From the Daniel Hannan blog;

“What? What? Ireland had one of the most impressive budget surpluses in the EU. It had done all the right things, using tax cuts to boost enterprise and growth, so that lower rates translated into higher revenue.”

Can this guy be taken seriously?

@Fiat sell then quickly the contingent liabilities,unrealized loan losses coming home shortly.
Ya can only hope there’s a Lord Elgin out there to nick them:)
Shur Ross can pony up easily …right !


You can indeed. However if you read it again without the red, or is it green, mist of nationalist indignation you will note the use of the words “interesting” and “not surprising”.

Neither of these imply anything actually unlawful, so of what relevance would Store St be?

Lets not be obtuse, most of us know the way things work, and I’m sure you do.


I think that all the relevant documents, notes, email, transcripts, minutes etc from say Jan 2007 to 2013 should be taken into consideration in working out to what extent Ireland was forced to do this or that. No one in the international finance community takes the say so of a few Irish insiders to a few friendly local journalists as anything other than out of context spin in all probability. But it might not be – so inform people, properly.

It would not be sensible to try to ignore the extent to which Ireland ‘forced’ a European policy, at least for a few years, of incumbent banks being backed to the hilt by taxpayers. It’s all part of the mix.

The point is that it is up to the Irish government to get on with it. It should do so.

@ MH: We really will have to stop meeting like this! 😎

“The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine of willful blindness hold that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances.”

[U.S. Supreme Court: Global-Tech Appliances, INC. v SEB S.A. (20110]

In Orish terms: “The concept of willful blindness holds that those in positions of responsibility cannot escape the reach of public accountability by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances.

ie: “No one saw this coming.” or “No law was broken.” , is simply a load of mendacious b*ll*x!

And, please do not get me started on our Undeserving Poor. You know, those lazy, loutish folk always looking for more welfare handouts and entitlements.

And as for our Undeserving Rich: please have pity on these ‘poor’ folk with their Oliver Twist begging bowls whining – “Please Minister, give us some more” – of the taxpayer’s money. They MUST be really needy! Though Lidl now have a really cool range of Deluxe stuff – especially for the Undeserving Rich! The Undeserving Poor will just have to make do with Brennan’s – and serve them right too!

Best seasons wishes to all – especially those of you whom I have some level of disagreement. It’s all relative: even if not always in good taste. But, we’ll be back!

@ Brian Woods Snr

I agree with you 😀

In Ireland at least, there is some form of public welfare irrespective of the position on the economic pyramid.

One individual with about about 1,600 acres can collect more than €500,000 annually for even watching the grass grow.

@ All

John Gallaher is among those of us who do not believe in fairytales.
There was no commitment in June 2012 to refund the past bank bailout costs, but Kenny/ Noonan apparently agreed to use the statement: “We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present Proposals on the basis of Article 127(6) for a single supervisory mechanism shortly” to suggest a “seismic shift” and “game changer” had occurred in respect of past debts – it would have potentially involved the majority of the member countries of the euro area, including Germany and France.

Did the leader of the biggest EMU country commit? Did the leader of Luxembourg, one of the smallest commit?

Of course not. Why? Almost 30 months since the summit and Kenny/ Noonan cannot name any leader who made a commitment to them.
Another popular fairytale is that on Sept 28, 2008, Jean Claude Trichet, ECB president, in a phone conversation had given the green light to Brian Lenihan, finance minister, to issue the State bank guarantee.

Trichet was ‘primus inter pares’ and the minister had a member of the governing council in the room at the Central Bank when he returned a call that had been made the previous day. However governments were presumably aware that the ECB president could not enforce diktats without the support of the governing council.

So serious government would of course make a consequential decision based on just the position of the head of the central bank. The reality check here is that there is no evidence of prior consultation on Monday Sept 29 2008 with any of the policy-making units of the European Union.

Anyone with experience of how multinational companies work, would know that a local unit would not rely on a past phone conversation with the CEO when deciding on a very serious issue. It would seek formal clearance from the hq.

Everybody knows what you were hinting at. Yet you provided none of the supportive evidence that you so readily demand of others.

@DOCM it’s hard to take anything seriously in that rag,I’m still somewhat confused bout KFW the “worst” or stupidest bank in the world entering the Irish SME market.
Have the Germans not helped themselves to enough swag,why lend below market and cherry pick the best loans with an unfair advantage,leaving the dregs and dross to the nationalized irish banks.
I’m sure the Brit banks will lodge a complaint,in typical herd like mentality the irish banks will either relax their underwriting criteria,or abandon a critical component of any recovery as the spreads too narrow to compete. Do you really want or need any more German help….

@ JG

Good question? However, as the famous monetary transmission mechanism is broken, and is unlikely to be fixed this side of 2015, whatever action that can help to sustain the signs of recovery in the Irish economy must be seen as welcome and not just by the Irish (which is the key to any agreement).

Your link to the KFW research note is also relevant.

@DOCM great link impeccable timing with Jan,again very sketchy on the details.
In Spain looks like they got a govt. guarantee has the Irish govt not had enough fun in the banking sector yet ?
If the funds are lent via a semi state body then they guaranteed the upside and no downside ?

In a democracy power comes from the ballot box. The greatest bank and property crash in the history of mankind,which bankrupted the Irish sovereign,undermined the euro and almost destroyed the entire world financial system, began with one house–Leinster house.
Below is the link to the Late Late Show in 1999,in which David McWilliams told the Irish people there was a massive Irish property bubble–he was told to commit suicide;

@ JG

I have no idea! FF seem to have gone quiet on the issue cf. my earlier post on the standard popular view of the country’s relationship with the EU.

2014 seems to me to be destined to be a year of consolidation not just in Ireland but across the EU because of the European Parliament elections, the departure of the current Commission and the AQR by the ECB. The standard machinery of the EU will tend to kick in and, hopefully, return the spotlight to the need for the integration of product, services and labour markets.

Where this leaves the UK, I do not know. Any notions of using a major treaty negotiation to be used to the UK’s advantage seems to have vanished.

Tull, it’s low level, it’s not illegal, and it’s a confidence – what on earth would I want to provide evidence on a public board for?

I’m simply sharing a tidbit to illustrate the sort of thing which doesn’t score on ‘corruption’ scores. Feel free to conclude I have simply made it up in order t – I also thought the timing (current) was interesting given a recent departure at the ICB, others may too. Feel free to think I have just made it up in order to diss your country, or something.

@John Corcoran

I used have a lot of time for your hero, but you have singlehandedly put a stop to that.

His bear in Irish property in still underwater just on capital let alone all the rental income. Hardly brilliant timing.

How would you rate his later contribution, apparently known in Cabinet as “The McWilliams Option”?

Wrong–he is not my hero and never was. Try not to be patronising. He had a public platform and used it to state the very obvious property bubble–your two year child could have spotted it–in other words he got the 95 mark question 100% correct. The 5 mark question is how to cope with the wreckage, the bank guarantee, etc etc. In a democracy power comes from the ballot box–Leinster house are totally responsible for the disaster.

You have consistently demanded chapter on verse on the Irish narrative of events from 2009 to 2011. So forceful have you been that many people including myself have changed our assessment of the veracity of the narrative. However, subsequently you have implied some level of sub optimal governance based on what might be described as pillow or pub talk. All I ask is that you hold yourself to the same standard as you rightly hold others.

That said, you are spot on on Blessed David of Dalkey.

The kfw link ends with “Ireland is not yet completely out of the woods.”

Germania will make sure that you will.

The German volatility index is now lower than the US ^VIX. The 10 yr risk spread of Ireland is now a mere 0.54% above the US, and a linear extrapolation hits equality in March 2014 : – )

Ireland needs to put some > 5% intelligent hardworking people back to work and off the dole. It makes it a lot easier to pay off the debt at a 2% / year rate, the stability pact asks for.

Germany has some 200 b CA surplus to be put to work, plus 50 b retiring government debt, plus 100 b in backflows from the KfW and various others, for which it seems apparently that no adequate local investment can be found for a 5 yr negative rate of > 1%

With the EU bureaucracy in decision disarray for the most of 2014, we cut out dysfunctional, meddling middlemen, and have simple contracts between the real creditor, the people of Germany, represented by the KfW, and the real entrepreneurs, the Irish SMEs.

In a true social market economy, ordo liberalism wants to and will achieve, you need well functioning markets. If that is not the case, as in the housing market after WWII we did substantial public house building.

A significantly dysfunctional lower tier labor market in Germany (what did me finally in, was that the guy installing my satellite dish just charged 30 !! travel, taxes, all clean official, he should be able to demand 50 in a few years) now justifies the introduction of a 11 $/hr minimum wage.

From a principle view I do not like it, and I hope very much that it becomes irrelevant 10 – 20 years down the road. It was actually DOCM here, to make me take a hard look at the facts on the ground. The Sovereign steps in, and enables functioning markets.

KfW competes in a global market, and it did not grow to its present size by taking politically motivated losses, as that is the case with so many government banks in other places. I put up numbers in this blog before.

Volkswagen is organizing work councils in the US factories, with the local unions.
We export our apprenticeship models to other countries.
We offer better choices, enrich the market place, but do not lord it over

@ francis

All sensible investment is, of course, welcome. However, the credit problems impacting SMEs in the peripheral countries, and Italy, are principally due to the malfunctioning of the euro. This can only be fixed by correcting the imbalances between the major economies i.e. Germany (33%), France and Italy (about 35% between them).

This requires integration of product (including energy), services and labour markets which requires reform of the German economy as well as those of others.

It may well be that the strategy envisaged is to fix the problems in the periphery first as a means of pressure on France and Italy to make the necessary reforms. I doubt that this will work. To quote Monti, North and South have to reform together.

It’s back to the future as far as the EU is concerned.

@ Francis
The German supermarkets,Aldi and Lidl,which have seduced us into buying a Jordanian army knife which could remove a camel from the eye of a needle,deep-sea welding equipment for repairing our personal offshore oil wells,plus home-kits for DIY heart transplants-though we only popped out for a packet of rashers and a kilo of spuds–have now unleashed 19th century vegetable prices on us. Last week we could buy a bushel of swedes and perkin of mangelwurzels for a few farthings,Price wise we were back in the days when Eamon de Valera was still called George Edward Coll and the Land League was not to be mistaken for the Airtricity league.

Will the German bank KfW have the same impact on our banking costs?

Deja vu all over again,a wave off cheap german capital searching for yield about to hit.I know I know it’s gonna be different this time,is there any guarantee from the irish side ?
Given the simply awful underwriting half wit bankers and politicians why not let the markets decide…can’t stand govt interference it always ends badly.

A little too long but the imagery by Marjory Collins “The Iceman Cometh” near St Patricks, Little Italy NY is interesting.

Also: “But of course that’s just “public policy”. The real policy we just saw: with the convenient artificial distance between the EU and ECB “firmly in place”, here’s what happens, and I might as well quote myself here: “The banks that buy the sovereign bonds with ECB money/credit turn right around and offer those same bonds, which are listed as “safe”, or “cash good collateral”, to the ECB the next day as collateral in exchange for more loans. With which they proceed to buy more sovereign bonds”.

Sovereign bonds from the EU periphery are highly popular, because they return good yields, while the risk that makes such yields feasible is perceived as being covered by the EU as a whole, and in particular the ECB. So banks are not only encouraged to pull this trick with “domestic” bonds, though I read somewhere that in Portugal and Spain, domestic banks now apparently hold over 70% of their “own” sovereign bonds, EU banks buy other EU nations’ bonds too to play the same game.

And while the ECB’s official policy is to make sure that “government-bond portfolios have a proper risk weighting”, the unofficial policy says something different, namely that banks have bought themselves even more political power since 2007, with the ECB loans that they buy sovereign bonds with etc., you get the picture (though perhaps I should mention the shadow banking system that can’t really do bonds, and buys stocks with its free “cash”. Record S&P ”

@John Gallaher
John, like many Irish people after a few months in the US they imbibe deeply of the Kool Aid.
” Markets decide…- gov’t interference, it always ends badly.”
That is the case in badly governed countries, most European countries are well governed. Ireland and Greece are two notable exceptions. Without gov’t “interference” most European countries would be third world basket cases. The US was well governed up until 1970s’ with the world renowned socialist Roosevelt being a shining example.

@Mickey,it’s hardly Koop Aid,more like common sense.
So in your opinion France,Italy,Cypress,Portugal,would be well governed ?
The actual set up is deliberately opaque they making it up as they go along,why would the irish govt touch this,are they that desperate for funds.

Joe Stiglitz – New York Times – piece on ‘Trust’- recommended reading for all but particularly ‘Friedmanites’….

@ John Gallaher / Mickey Hickey

A system where one of the two main political parties can use the blackmail of national debt default; shut down the government and which enables most states to engage in partisan gerrymandering that results in only about 10% of House of Representative seats being competitive, is in need of retooling.

Coupled with the above, the ratio of registered lobbyists to federal lawmakers in Washington DC is 22:1 — seems a lot and the over $3bn spent by companies excluding legalised bribery of politicians, is maybe a perversion of democracy? Does big business get value for money?


No member country of the EU28 likely supports a full single market and as regards significant change, Sigmar Gabriel and the faded white knight Hollande are not going to support actions that will be seen as job losers.

Countries such as Italy and France need to address local problems and no number of common initiatives will help that.

There are several areas where common action would help but recent proposals on a digital services were limited and timid.

Changes in tax rules which do impact the single market depend on the G-20 and OECD.

The common patent is a big advance but Italy and Spain with poor patenting records, decided not to take part for petty reasons.

Progress will remain slow at national and union level – maybe a little faster than Ireland’s glacial speed. Still, times have improved.

“The great powers of our time,” the German chancellor Otto von Bismarck told a Russian diplomat in 1879, “are like travellers unknown to each other, whom chance has brought together in a carriage. They watch each other and when one of them puts his hand into his pocket, his neighbour gets ready his own revolver, in order to be able to fire the first shot.”

@ Tull: “That said, you are spot on on Blessed David of Dalkey.”

That Blessed David seems to have been a member of a well-informed squad:-

Dean Baker
Wynn Godley
Michael Hudson
Michael Janszen
Steve Keen
Paul Krugman
Jacob Brochner Madsen
Kurt Richbacher
Nouriel Roubini
Robert Shiller
Joseph Stiglitz

Naturally, this list may either be complete or incomplete: and probably argumentative. But then predicting the future is … …

“If there is no doubt about the identity of the real culprits; then simply blame the spectators!”

@ MH

“No member country of the EU28 likely supports a full single market..”

That is, indeed, the problem! The question is whether the euro will copper-fasten or dilute this attitude. It must eventually occur to even the dimmest leaders that they cannot make a success of a common currency while maintaining national barriers with regard to a myriad of traded activities and free movement in general.

As to the Bismarck’s railway carriage, the difference is that the EU countries are not strangers, they are bound by a mutual acceptance of the rule of law in an organised institutional framework and the breakdown in trust that has occurred is not, one would hope, terminal.

When I was watching „The Second Civil War“ things got hot, when the National Guards from Montana and Bismarck, North Dakota came to the help of Idaho.

But they had pretty old tanks, we gotta get them some fine Leopard 2.
Canada can supply the logistics, our Canadian customers seem to be enthusiastic, given the number of youtube postings (e.g., somewhere calling it an “M1 Abrams Killer” : – )

The real reason I bring this up, it reminded me of reading earlier this year about the public banking in Bismarck (a state owned “socialist” bank in a deeply conservative state), threatened by Goldman-Sachs & Co.

and many other, nytimes etc., references too, just google the usual key words.

It seems to be pretty similar to our Sparkassen & Landesbanken system, set up there by people who emigrated before we implemented it here, following similar lines of thought, and not some existing blueprint.

The only real Lender of last resort (LOLR) is a sovereign, with the real power to raise taxes and use force. The EU is no such thing.

It is time to rethink the whole financial setup in the World, whether some gnomes in NYC, London, Basel and Brussels are the ones to decide, how we organize things in Germany, Ireland or in North Dakota, or those who really put the dough on the table.

@francis thanks,the irish govt has become rather fond off financial engineering and sleight off hand tactics regarding its actual level off debt.
The irish bad bank “NAMA” is an off balance sheet SPV with only upside potential,original intent was to make a profit from a very low basis,brake even would now be considered an achievement.Difficult to get a handle on the treatment off any losses from the IRBC liquidation,and the non disclosure of the recent AQR results is kremlin like.

Unlike Spain there is no equivalent underwriting team,servicing department or loan committees to approve the winners in this beauty pageant.Given the level of political interference already in the irish economy the lack off specific details and slavish applauding by the nanny state advocates should be suspicious.

This proposal is wide open to political interference and additional mission creep by the NTMA,oh it’s gonna be different this time right .Great lets have some career civil servants/lifers,like those at the central bank won’t even work 40 hours a week decide,can’t wait…..

Francis I’ve worked with,and witnessed many german banks enter the NY market over the years,they would be much better off building their own platform in Irl and lending at say 3% with a clear profit incentive and motive,Im instinctively suspicious of further irish govt involvement in the real economy given the appalling recent history.

Big bday this week.

Tull, if you are alleging blackmail or undue duress forcing you to act against your own interests to the tune of many billions of Euros some convincing evidence is necessary. You are trying to convince the world.

If you casually share a piece of reliably source gossip, you don’t care if many people opt to disbelieve you. You are trying to assert an equivalence which doesn’t exist.

@BW snr

I thought the conspiracy theory was that D McW couldn’t have been solely responsible for selling the bank guarantee, that there was some Frenchman issuing orders from the grassy knoll.

Are you saying all those other guys were giving it the hard sell too, from somewhere we hadn’t noticed?!

@ grumpy: No. My comment was in connection to those economists who in some fashion or other ‘predicted’ the economic and financial crisis we are experiencing – ie. they were commenting before 2002. McW was commenting on our specific credit-fueled property bubble which began (I believe) in 1995/6, paused during 2000/02, then resumed with a vengeance until late 2006, when it sputtered out.

The Bank Guarantee was a political and financial mistake of heroic proportions. It was simply a gigantic f**k up. To even suggest it was some sort of a conspiracy is to completely misunderstand its context. It was (again, my opinion) a desperate attempt to salvage what was correctly perceived as massive financial disaster for specific financial entities – rather than a widespread catastrophe. However, it was sold as the latter and the conspiracy theorists enjoyed a ‘field day’.

And the unfortunate outcome of the mess is that significant financial industry ‘reforms’ – whatever these mean, will be postponed sine die. This mess has a considerable distance to run yet. But all attempts to ‘exit’, except the single correct one, (a debt Jubilee) will be explored in minute and exhaustive detail. Cream, excrement and incompetents float to the surface!

Best wishes for the holidays.

Coming late to the party/thread. All comments much appreciated. Ars longa vita brevis.

The IMF review is an interesting read. As Paul W notes, the biggest domestic downside risks are around the economic and political management of debts owed to domestic banks. We will soon be into the long run-up to a general election. Absent the troika, the incumbent government is likely to kick the can down the road on bank solvency, and toss a few buns to the electorate. The press will have ‘melia murder’ with evictions of respectable families, and even a pre-election billion in new SME credit is not going to kick-start the domestic economy. Paralysis the most likely outcome, IMHO.

Re your comment about our growth prospects 20 Dec 7.51pm.
We grew our way out of debt in the later 80/90s, in circumstances where the external environment was very favourable. Given the growth prospects of trading partners, which are also increasingly impacted by demographics, that feat is unlikely to be repeated.

Sony Kapoor is right, but so is BWSnr, who refers correctly to the decades old financialisation of the real economy, and the inescapable energy questions. We are incredibly vulnerable to a crunch in energy prices. Our trust in globalisation is almost childlike, but the process cuts both ways. Job destruction continues apace, as Michael H never fails to note.
Paul W and Mickey, Grumpy and more have it right too about our traditional and hugely denied corruption. We don’t do financial morality or corporate governance much. Paddy knows Mick who was in x with Kate who did y with Brian and we’ll sort it out over the phone. Let the juniors do the paper work, and get one of the usual fella’s contacts to do the feasibility study. It’s all coming of a broad back. The state as a cow to be milked.

Francis has it:

‘A significantly dysfunctional lower tier labor market in Germany (what did me finally in, was that the guy installing my satellite dish just charged 30 !! travel, taxes, all clean official, he should be able to demand 50 in a few years) now justifies the introduction of a 11 $/hr minimum wage.
From a principle view I do not like it, and I hope very much that it becomes irrelevant 10 – 20 years down the road. It was actually DOCM here, to make me take a hard look at the facts on the ground. The Sovereign steps in, and enables functioning markets’

That’s what Michael Polanyi was getting at in his Great Transformation (1947). The neoliberal agenda has been, in large part, a charter for thieves. Ordoliberalism, insofar as I have studied it, has at least some recognition of social responsibility and human dignity.

It seems to me we need a properly political economy, which is well and truly informed by history. Don’t be misled by the tile of this classic. It is all about constitutional politics, and how not to make a b****s of it.

You well trained, metaphor-pushing chimps can waffle and stutter on like the politicians you really are. We all know what’s actually going on here: 1 by 1, failed states (easily manipulated and bullied peripherals) get pushed around by short sellers and credit rating agencies. They’re more vulnerable and less sovereign than ever and ripe for the final picking (there’s a metaphor for you). The final picking will be when shadowy banking union is established, and the next peripheral crash when the PIIGS come back to the trough and spread the mother of all contagion into the core of Europe’s financial system. The EU or at least the Eurozone, will be bankrupt and without any gold or resources. Russia and China, not sure which (who have ample gold reserves) will be in to buy it all up on the cheap. Gotta have the creditors all centralized in one place so Europe can be kept in line, and kept down. Of course, additional states such as Croatia need to be coerced into the Euro currency, and maybe there will be a push to sucker the UK into it as well. I don’t know about that. They’ll want it all wrapped up in time for their big bonanza Bankster Christmas of 2016 so Europe can have a fake boom, in time for the dawn of ASEAN (to be pre-loaded with banking union), and other unions?

@ nostromo: Its the eve of Christmas – and yeah it was originally a very important pre-christian festival which was hijacked – for political reasons! So, what’s new there?

Yeah, those one kilo bars are being sequestered in Chindia. And that Bear has the gas! Now isn’t that gas!

But here’s the thing. Last time I looked you could neither eat nor drink gold nor gas. Now isn’t that a gas!

@ John Gallaher

I would also not like some foreign country agency to interfere in my place without me having close tabs on it, so this has to go through local organisations. The KfW is the result of prudent public stewardship of the Marshall Fund, something grown from the size of 1 billion to the order of one trillion Dollar.

And I think the more important aspect of the KfW loans is not the modest amount of money moved from one account to the other, but that a larger package of help comes with them.

After reunification we also had to create lots of new jobs, and we believe to know a thing or two.

Dishing out publicly stupid, cheap and wrong advice, without knowing any of the details, that is for American economics professors.

When we understand more of the local details, we hope to be then able that our kfW guys can then talk with their counterparts at the grass root level: look this seems to work in Germany, why don’t you try that with some modifications in your place. And with unemployment around 3% in Bavaria, we probably have some spare capacity of advisors, who might also learn something on assignments abroad.

Merry Christmas to everybody !

@John Gallaher
I would add Japan to FICP as being well governed. Japan kept unemployment under 6% after its 1990 collapse. That is 23 years ago and only now are they trying to inflate their way out of debt. Inflation is the least painful cure for excessive debt, if Japan succeeds then there is hope for all of us.

What surprised me a little bit that Mickey apparently needed this (posted) on Xmas Eve.

To the content, as far as google translate allows, it is the same JINO (Journalism in name only) as what I posted for reference, closer to the German original, in the ESRI studies thread” on 12/19 6.48 pm. This “article” could have been written in a Bar in Singpore, just scour the german media of the last week, translate and write according to the needs of your French customers, loving to hear about the evil neoliberalism running havoc in Germany (whole regions devastated) : – ) Or is there one piece of more information in it. The numbers are formally correct, just highly misleading, intentional.

The minus 0.3% of real wages is just noise on a pretty positive general trend. You will always find some under the year quarters you can compare, where wage raises play out differently, inflation numbers were slightly differently, working days do not get adjusted, and a red/green block in the Bundesrat blocks the raise of tax rate limits, before the elections : – )

To the “rising inequality”, that is also noise (just 1% point “risen” of fraction) and dependent on who defines what parameter how. When we look at the ESRI chart 2, Germany is “better” then EU average and very comparable.

When I look at e.g.
The numbers have fallen for Germany by 1% from 2007 to 2012, and are now practically identical to France. But “it is all noise” doesn’t sell, “German bad and badder” does sell, everywhere.

And Ireland looks in this table dramatically worse then the ESRI Fig 5.1 !
I wouldn’t hark about it, if not because we had the ESRI thread just here, me pointing out, that the 2014 projection was misleading as well, and Michael Hennigan providing the usual precise, detailed, referenced information on AIC

And to complete it, to look also on the other side, it is Xmas time, I am visiting family and meeting people, who are deeply convinced that the minimum wage is a complete catastrophe, “whole branches” will be completely devastated, socialist takeover, yada, yada, yada.

Stirring up the emotions, taking extremist positions, is of course effective to prevent all realistic discussion, like are there sectors, where we might need transition periods, why is it important to have in the end a universal rule, and not just hodge podge of branch specific treaties, which can always be circumvented somehow. That countries like the US and UK also have it, that this will play out overwhelmingly in non-tradable sectors, …. : – )

But that does not happen, because every argument gets summarily rejected by repeating the same litany of extremist positions.

One of the reasons, I come here, is that at least on occasion, the discussion and information level in this blog is higher. And I want to motivate into this direction : – )

@ francis

It’s likely that data for the third quarter reflects a decline in hours worked rather than earnings.

In Ireland, the sector with the highest ratio of migrant workers: tourist activities such as food/accommodation, are among the lowest paid sectors. I

assume it’s a similar situation in Germany.

The average hourly labour cost in Poland, including employer taxes, is €7.

The price level in Ireland is 20% above the German level.

@ Mickey Hickey

On Japan, any market economy that guarantees a significant chunk of a workforce ‘jobs for life’ shafts other workers and Japan is the worst example.

An estimated 38.5% of the workforce of 53m in paid employment are ‘irregular’ workers including the majority of women. These people are in effect in casual low-paid jobs.

Meanwhile according to the government this year, 4.6m of the permanent workforce of almost 33m or 14%, are surplus and some companies use ‘banishment rooms’ where workers who are unwilling to accept severance terms, are given no work, to incentivise them to leave.

Japan’s companies have low productivity; low profitability; a stress on loyalty and seniority; cross-shareholdings to protect each other against outside threats and restrictions on inward investment.

@ John Gallaher

On the Fed, the secret origins of the Fed has given rise to a sophisticated scam known as ‘prime bank’ fraud.

The Federal Reserve and the paranoid style in American Politics

@ MH: “Inflation is the least painful cure for excessive debt… ”

Er,no Mickey, but its Christmas and all. Just think. Which direction will your (imported) energy costs go ….

@ MH: … and there is also:- ‘The Secrets of the Temple: How the Federal Reserve Runs the Country’, (1987). William Greider. 755pp. Grim stuff.

@ jg: You might ‘amuse’ yourself: ‘The Moral Consequences of Economic Growth’, (2005). Benjamin Friedman. Not funny! But very well researched.

@Michael Hennigan
It might surprise you to hear that jobs for life were the norm before governments started providing broad social supports such as pensions, unemployment insurance and welfare. This continued in Ireland well into the seventies. I distinctly remember picking up flour in 8 Stone bags from Latchford’s of Tralee and Listowel where the warehouseman was over 75 years of age and even though I was only fourteen I had to load it myself as the man was too crippled to leave his cubicle. It was very bad form to let go of people who could not support themselves.

People with jobs for life are secure enough to actually spend their income particularly if they have a defined benefit pension which most did. We are living at a time where there is a superabundance of supply and a paucity of demand. Dog eat dog and the devil take the hindmost has become normal in the USA since the 1970s’.

I find the best articles about the Irish and German economies are written by the Swiss. France watches Germany carefully since any slackening of demand in Germany will be felt France. Much like the US cold becoming the Canadian flu. I am quite convinced that Germany is in a far more fragile position than most people on here realise. Germany is under pressure from the USA whose labour costs in manufacturing have declined, China who are moving up the value added ladder, and the Periphery where demand is moribund and manufacturing costs are declining. Major German corporations are creating jobs abroad in spite of low German labour costs and a near zero cost of funds or in the latter case because of. All viewpoints have to be examined based on country of origin, I could get apoplectic reading the British expound on Ireland but I do not. There is no necessity to be over sensitive about what people write, just examine it for usefulness and remember the ones you find pleasant unless of course one’s livelihood is at stake.

@ Mickey Hickey

What I was referring to in respect of Japan is a right guaranteed by law for permanent staff to retain their jobs and in Spain which had about a quarter of its workforce as temps before the bust, where redundancy costs for permanent staff were very high.

In these dual labour systems, it’s young workers who are the expendable with poor terms and a struggle to rear a family – not economically wise in an ageing society. One in four workers in South Korea are also on temporary contracts, double the OECD average.

Everywhere, the protections for those with power come at the expense of those without.

“Japan has the worst generational inequality in the world,” Manabu Shimasawa, a professor of social policy at Akita University who has written extensively on such inequalities, told The New York Times in 2011. “Japan has lost its vitality because the older generations don’t step aside, allowing the young generations a chance to take new challenges and grow.”

In Germany for the first time since 1991, as permanent jobs rose by about 504,000 to 24.2m in 2012 according to Destatis, there was a fall in temporary and part-time work.

Destatis added that the proportion of what it terms ‘atypical workers’ in total employment between 2011 and 2012 went from 22.4% to 21.8% respectively compared with 12.8% in 1991.

Whatever about jobs for life in Kerry in past times, pre the period of statutory protections such as the Unfair Dismissals Act, it would have been uncommon to have a letter of appointment, never mind written terms and conditions details – a far from idyllic situation in particular where owners lacked human relations skills.

@francis,don’t get me wrong the SME sector in Ireland desperately requires more lenders and capital.Any initiative at all is to be welcomed,it’s just this one is so vague and ill defined its wide open for pork barrel politics by gombeen irish politicians.
The real question I have is whether or not the principal is guaranteed by some irish govt. vehicle,i do know how principal preservation guides german “investment” or lack thereof:)

@Mickey,where to start how bout that old canard “liquidity trap”. This paper has done the rounds and is still relevant,covers your inflation suggestion and Japan.An oldie but still good.

@MH good read but you certainly not living in a society without its own rather salacious scandals and shady weird politicians.

“After falling out with the formidable Dr Mahatir Mohammed, his boss and prime minster from 1981 to 2004, the married father of five was accused of having a homosexual affair with his wife’s driver and convicted of sodomy, a crime in Islamic Malaysia.”

“The long list of scandals isn’t all about sex. Accusations of kick-backs, race-baiting, vote-buying and outright copying of rival platforms are all part of the mix. Members of parties in both of the rival coalitions have been embroiled.”

@BWSnr,thanks Brian added it to my “cart” at Amazon looks like a terrific read here on the beach,if I can focus with all the eye candy around:)
Well worth skimming,Francis especially you!

“This paper has interpreted Ireland’s fiscal consolidation policies since 2008 within the country’s neoliberal political economy. The latter witnessed an unprecedented economic expansion in the 1990s and 2000s but has faced a crisis over the last few years. The important ideological role of the mass media in presenting and debating fiscal consolidation was investigated by examining all relevant opinion, analysis and editorial articles in the three leading Irish newspapers between 2008 and 2012. The following conclusions were reached. First, news organisations have presented view- points which have been largely positive in relation to fiscal consolidation as a strategy to foster growth. Second, expenditure reduction has been preferred over tax hikes as a strategy to achieve fiscal consolidation. In this respect, the public sector has been identified most often as the priority. Third, although the media have presented oppos- ing views that favour alternative policies, such as Keynesian stimulus, such viewpoints have remained a minority. One reason for the weakness of positions opposed to fis- cal consolidation is that they have tended to be limited to disagreements with spe- cific cuts, rather than questioning fiscal consolidation in principle. Fourth, ideological divergences between newspapers were examined in order to account for differences in their coverage of fiscal consolidation”

@ MH: “Germany is in a far more fragile position than most people on here realise.”

Spot on! Germany’s ‘natural’ economic hinterland is the UK (absorbed a lot of German exports, and vice versa of course). They ‘need’ each other. Then its Middle Europe. Both UK and Germany have real serious (looming ever closer) economic problems – its their respective demographics. Too many folk, just not enough employment opportunities (sufficiently well paid ones!) to go around. Export markets reaching saturation – again!

And if the received economic paradigm is to encourage ‘migration’ to already crowded urban areas to work in ‘services’, us (the taxpayers – that remain) will have to fund evermore welfare programmes to provide minimal living conditions. Else, you have to re-export those surplus humans back to the farm. Where of course they shall find ample (low and unpaid) menial manual labouring opportunities to occupy their days. Problemo solved! Like hell it will!

But you really do have to wonder about some of the ideologically incoherent and daft notions many in-situ politicians, bureaucrats and economic critters have in their little heads. Like, the one: “Growth you will always have with you.” – even when you do not! Both the developed and developing economies are – relatively speaking, stagnating. The former need an annual, incrementing economic expansion of NOT LESS than 2.5%, the latter need approx 5%. Not going to happen.

The various origins of this current economic mess, or whatever you want to call it, go back a very long way – to the days of mass industrializations and reductions in agricultural employments: Urbanization v de-Ruralization. But you rarely see that referred to. Bit inconvenient.

Our current mess is just a more technological, and a far more deeper and widespread version of the many, many, previous such messes. If you subtracted out most of the ‘welfare’, healthcare and educational provisions which we now ‘enjoy’ – it would be 1933 all over again. And that’s what some ‘clever’ folk are suggesting we head back toward. Indeed!

Folks’ memories seem are a tad short! Maybe they just do not bother reading.

Bye-the-bye. Anyone know a good source of “The Freak Brothers” comic books. I need something more intellectually stimulating than the ‘Daily Pap’ to lighten my daze! jg?

@ jg: Obliged! Looks like Uruguay may be the place to go! 🙂

“On the beach!” Jeeze John – we have just endured a junior hurricane in the last 16 hours. Easing down now, thankfully. Garden is in a shambles.

Dr. Mercille would be a tad too close to the Keynsian Left Bank – even for me. I took a post-grad semester module he gave – “Global Financial Crisis”. Well organized and prepared, if somewhat a tad ‘lopsided’. You worked for your grades!

@BWSnr,if that does not work I have an “Artemis Fowl” teenager with me who can upload it to a site,I wish I was kidding…
Sorry to hear about the garden,the austerity budget still stretches for a quick break,recharge the batteries and all that,if it’s any solace was absoluty freezing in NY just before departing and wil be on returning.
The good doctor is an excellent writer i find his work to be very interesting,if at times a little out there but terrific footnotes,research and read highly recommended.
Speaking of which I linked the “Wolf Wall Street” above it’s simply awful,dreadful movie bored to tears watching it,garbage.
I did notice that debt forgiveness/relief is working out quite well for those in the “golden circle” the hack must have had a few over the holidays.
Maybe someone can explain insolvent to him….

As an economist might tell you: “Dope will get you through times of no money better than money will get you through times of no dope.”


Your „the best articles about the Irish and German economies are written by the Swiss” caught me with some surprise, in the moment I tried to remember, what I did read and would attribute to “Swiss”.

Could you be nice to me and give me some of your examples?

France / Germany trying to run very close, not a piece of paper between us in many things, is the result of 300 years of increasingly horrible wars. The Guerilla French franctireurs 1870 had their predecessors in German black squadrons in the liberation wars against Napoleon, 200 years ago, and going back further. This “Vernunftehe” is the one iron clamp holding everything together in Europe. From this perspective everything else and all other countries are optional.

Germany is certainly not fragile, it is just not invincible, but remarkably resilient. When I look at stuff like “british-economic-triumphalism-in-perspective”, and all the SWL, Menzie Chinn links going with it, calling 7% gov deficit after 5 years going “austerity”, and “successful”, with all the housing credit fuelling, the CEBR prognosis, I really wonder in which parallel universe this happens.

@ John Gallaher

None of us knows the details of the KfW agreements, for which the very modest preliminary symbolic 1 b numbers are just for headlines. From my point of view the written and the financial are a pretty small part.

I came across an image of a $25 bond issued January, 1920 signed by John Noonan and Eamon De Valera and bought by Patrick O’Brien. Does anyone have a handle on why it was denominated in dollars. There are other papers there that lead me to believe that WH (Hugh) O’Connor owned a bank run by his son Liam in Castleisland. WH O’Connor was an ardent nationalist whose home was burned down by the Black and Tans, he owned Rhyno Feed Mills in Castleisland.

The link is to the archives of Rhyno, look at images under documents. There seems to have been creativity involved in banking and finance in the early 1920s’.

@Mickey Hickey

“A most successful bond drive was got under way by Mr. de Valera in America, and it was decided to raise a National Loan at home and the young Minister for Finance who launched it and suprevised all the organisational details was a wanted man. He was not yet 29, and had three years to live.”

Tim Pat Coogan, as far as I am aware, has covered this subject, and in particular how some of the funds raised by DeValera, managed to stay in the control of DeValera, and were subsequently used to set up the Irish Press, controlled by DeValera. TP Coogan was not overly complimentary of the circuitous route the funds managed to travel, considering the purpose for which those funds were raised.

[re: O’Connor animal feeds. Interesting.
I knew a family member back in the 1970s but was never aware of the origins of the business, other matters taking precedence in those earlier years. That family member was quite a good footballer and played for Castleisland and was probably good enough to play for Kerry, but was possibly a bit too opinionated to settle easily into the Kerry regime of the 1970s.]

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