The possibility of renegotiating Ireland’s approach to fiscal policy in the short term

The country is all a-buzz with speculation that, having listened to the voters for the last few weeks, and having applied Sudocrem to all affected areas from the experience of the election itself, the political class will suddenly be able to reverse the process of austerity begun under the previous government.  (The process obviously continued, in lock step, by the current one).

The Taoiseach’s call for a review of European policies around bank debt, combined with talk of renewal by Labour following the start of their leadership race, is fuelling this speculation.

The latest ESRI quarterly commentary makes the point that the government’s finances are improving at a slightly faster than expected pace, meaning we may hit the Troika-mandated 3% deficit target without serious adjustments required in the forthcoming budget simply by relying on existing forward momentum and the action of automatic stabilisers. Of course they hedge their bets a bit, but given the importance of the issue I thought I’d quote a bit of the commentary:

The public finances are improving more rapidly than envisaged in the government’s plan. If the forecast in this Commentary proves to be correct, government borrowing in 2015 is likely to come in below the target (3 per cent of GDP) once again, even without the substantial further cuts envisaged for the 2015 Budget. However, in formulating fiscal policy it is best to err on the side of caution to ensure that budgetary targets are met in 2015. Nonetheless, these developments suggest that, after a long period of attrition, we are approaching the end of the very painful period of fiscal adjustment. However, there still remains the possibility of new shocks to the economy.

So does that mean the government can run out and renegotiate, renew, de-re-up on their promises to the Troika? I think the ESRI are saying the promises can be met without additional austerity, with a fair wind.

This may not spell the end of the consolidation period, however.

(Updated, thanks to Rossa White for this clarification) The NTMA’s investor presentation has the best graph of what’s supposed to happen in 2015’s budget. In budget 2014 the government agreed about 0.9 billion in revenue cuts and 1.6 billion in expenditure cuts, but the composition of the 2015 adjustment of around 2 billion (as per the recent SPU) hasn’t been outlined yet.

So while it isn’t clear that this last bit of austerity can be avoided just yet, it is pretty clear that (however constituted) the government will try hard not to implement the last few billion of cuts, especially if the 2014 August and September returns are looking good.

I think the question is, given the need to respect the 3% constraint–and please let’s not give any credence to headbangers talking about renegotiating the MoUs, etc., at this stage–what exactly the government will try to do to signal to the public the austerity period is effectively over.

The answer will define the legacy of this government. As Kevin notes this morning, at the last general election, the public voted for change, they got none. They are asking for it again, and much more clearly this time.

Michael Noonan has signalled since the last budget that altering tax bands is on the cards, saying.

If I have the money that is where I will go. I would like to reduce the threshold at which people hit the higher rate.

Fair enough, and this widening of tax bands does make sense as long as funds allow, and perhaps a tweaking of the USC, but the question politicians are asking I’m sure is will this be enough to appease the public?

By Stephen Kinsella

Senior Lecturer in Economics at the University of Limerick.

63 replies on “The possibility of renegotiating Ireland’s approach to fiscal policy in the short term”

Tinkering at the edges of tax bands will do little or nothing for most wage earners but I am sure those on 100K plus will be delighted. It is all the sneaky tax increases that are the problem for working people and families. The ones that come out of your after tax income, the taxes that erode without taking in your ability to pay.

According to the Tax Strategy Group papers , available on the Department of Finance’s website, 953k tax payers are on the standard rate with 380k on the top rate (841k are exempt) so most people would not be immediately affected by a widening of the band, A €1000 increase in the band would cost €150m in a full year(according to the TSG papers) and would benefit a single person on the higher rate by €210 a year.
On the general issue it is not clear at this point whether the Government will have any leeway in terms of meeting the existing targets-tax is running 2% ahead of profile but that can change and we do not know the first quarter GDP figure- forecasts are just that and may be wrong.

Scrap the TV license. It’s a regressive poll tax that directly funds the lifestyles of a wealthy elite. It is also exactly the type of household charge that is driving the electorate insane.

You could fund a news/local sports/arts channel from direct taxation.

scrap public subvention for the Humanities Departments at Universities. If parents or their kides wish to study “social science” let them pay for it out of their own pockets.


Without these degrees how will we educate the public that being poor is unpleasant? I suppose that we will have to continue to rely on Joe Duffy.

The Bill for the transfer of the €6.8 billion pension fund residue to an Ireland “Strategic” Investment Fund was recently published.
Don’t be surprised if part of it is used for sweetners for voters.

The number of people who have jobs as employees is below the Q4 2010 level while part-time employment has risen.

Average hourly wages in the 4 years to Q1 2014 have been stagnant.

Ibec wants tax cuts to avoid member firms paying pay rises while the CBI in the UK has asked companies that are benefiting from the recovery to raise wages.

John Cridland the director general has said too many people are “stuck” in minimum wage jobs, despite an upturn in the UK economy.

The Nevin Economic Research Institute (Neri) said in its quarterly report last December that 20.7% of workers are classified by the EU as low paid (with the cut-off point being €12.20 per hour). They also generally work fewer hours per week, although they wish to work more.

So even people at work have limited spending power and that’s reflected in some of the data.

This week’s data on jobs is again not reliable.

“let’s not give any credence to headbangers talking about renegotiating the MoUs, etc.”

The mood music really has changed. I can recall the time when it was sometimes acceptable to characterise non-headbangers as ‘economically illiterate’.

@stephen kinsella

I think the question is, given the need to respect the 3% constraint–and please let’s not give any credence to headbangers talking about renegotiating the MoUs, etc., at this stage–what exactly the government will try to do to signal to the public the austerity period is effectively over.

It would be crazy to challenge the European consensus on the economic crisis – recovery is just around the corner. In fact it would be worse than crazy – it would be unserious.

This reminded me, in a not good way, about this.

Solow telling Chicago economists some home truths

Once you are reduced to arguing about fine tuning the detail of the MOU (or in this case just taking them as a given) you have conceded everything. If you are going to approach the economic crisis from the point of view of which set of fiscal rules are appropriate (or possible) you have surrendered the argument entirely. It is like being falsely imprisoned and then arguing over the appointment of your cell.

The 3% target and Axis surveillance are legal manifestations of a failed and immoral policy set and Europe’s recovery (on which we are dependent) is being crippled by them. The various MOUs and pacts (signed at gunpoint) are a major part of the problem. They have to be challenged.

As grumpy said it was not too long ago that everyone outside the adjoining pigsties of the European Commission, ECB and German government were unified in their contempt for the economic suicide pacts. We have spent a long time under the boot, lets not imagine we deserve it or that it should not be removed from our throats.

re: The Minister of Tax Bands:

“If I have the money that is where I will go. I would like to reduce the threshold at which people hit the higher rate.”

Based on what the minister says, that will benefit ALL taxpayers at the 41% rate by €210 euros for every rise of €1,000 in the low band.

An extension of the 20% band will be worth nothing to any person earning below €32,800, the vast majority of taxpayers. (953,000, from the above comment by Dan McLaughlin.)

IMHO, there is no room for tax cuts, but buckets of room for removing tax breaks, including the 4% PRSI tax break lavished on some of our elderly statesmen.

@Shay, I’ve been very, very critical of the austerity approach as I’m sure you know, and have been accused of being economically illiterate a few times as a result. But given the manifestly unrealistic talk surrounding renegotiation, etc., talking about changing the 3% target is really only a waste of time.

@stephen kinsella

I agree with you the vast majority of the time (not particularly comforting I am sure, I try to keep my agreement quiet) so sorry for the offence. The cut in taxation is a terrible idea.

I think however that it is easy in a situation where you are being victimized to start to thinking like the person who is victimizing you and so with political struggles too. Our government apparatus is now utterly focussed on measuring and meeting criteria that we should never have been subjected to and which hurts the long term well being of the Irish people.

The MOU and the SGP were terrible, terrible mistakes and they have to be confronted and reversed. Until these awful manifestations of European Union political and economic failure are dealt with the Eurozone crisis will continue. Without public and government opposition to the terms of the MOU and SGP they will never be undone so regardless of how hopeless it now seems we have to try.

@Ernie Ball

The Stability and Growth Pact, where the 3% deficit limit (on pain of further public suffering) is set EU wide.

Here is a suitably Orwellian Euro-edict: The corrective arm

The various pacts do not have anything about unemployment or poverty targets as far as I know. That is what the market is for. Obviously the problems go further back but the single mandate of the ECB is when the decision to go the full ordo was completely set, that is when we decided that politics would be replaced by financial and monetary rules.

that is when we decided that politics would be replaced by fiscal and monetary rules.


Any bank related debts associated with Pierre Laval Trichet’s infamous letter(which may or may not exist).

BTW, I wonder is Wolfie getting a little bit scared that he has overcooked the demands on the Southern European countries (and us) and are now looking at the disintegration of the European project. Should we be cheering on the FN and voting for its cousins over here.

At this point, I think the government’s only hope of avoiding being fried at the next election is if there is a significant upturn in economic activity. Whatever they do in terms of juggling taxes and spending within a slow-growth 3% of GDP ceiling will not save them. Really the only lever they can plausibly push to boost growth that much that soon without heavy borrowing is to collaborate with other non-core EU governments to bludgeon the ECB into high volume quantitative easing.

It would be good politics to reduce the water charges to the lowest possible figure, and combine that with some visible cut in income tax rates. It’s notable how quickly the hysterical reaction to expenditure cuts dissipates.

Irish workers on average incomes still pay very little tax on their income (USC, PSRI etc included, once benefits are taken into account), and recent tax increases in this area should not be reversed. The same applies for water charges and local property tax – these remain at low levels in international terms and the country will benefit from bedding down these charges as the new normal.

Perhaps some spending on expanding access to cheap childcare might help with “back to work” problems? or other labour activation measures? or increased spending for health and education (nb not increased salaries)?

It’s not going to save them, but it might actually be a good idea for the government to reverse policy, ditch water charges, and continue to pay for water out of general taxation. Ireland is one of the few countries where there’s no real need to conserve the raw material – untreated water.

For a lot of the population, most of the costs of delivering water are fixed. They are about providing the infrastructure, not about the volume of water that flows through it. So, while charging by volume sounds like a good idea, in the Irish context it really is not that great. Add in the cost of meters, meter reading and billing – maybe 20% of total costs – and we end up paying a lot more for our water because we pay for it separately from our taxes without significant compensating benefits.

Just because almost every other country in Europe has a shortage of fresh untreated water doesn’t mean we have to behave as if we do too. In Ireland, metering water is electorally dumb, and economically hard to justify.

A little quote from the Irish Times:
“Prof FitzGerald, who prepared a paper with ESRI colleague Edgar Morgenroth on Irish Water for the Department of the Environment in February 2012, and who has been a member of a review group in Northern Ireland looking at the water utility there, said the economic argument for metering was questionable, given the €500 million plus cost of installing meters.”

Not completely ridiculous idea, maybe could combine with insisting that all new properties have water meters, discount on your LPT for getting water meter installed etc, go for full meter coverage over ten years or so…

@ otto

That would be just too simple! The ideas you suggest are all on the list of general recommendations from the Troika. The two that really hurt politically are, however, the property tax and water charges. These were on the list of things that had to be done and are difficult, well nigh impossible, to renege on, even if the capacity to make a mess of their introduction has been amply demonstrated. The fact that they are simply bringing the country into line with other countries of the EU is seldom mentioned. Or that the Troika never set out to micro-manage any of the programme countries.

The USC is home-grown but it has the inestimable value of being levied on all income in a country where many are of the view that they should pay no contribution whatsoever to the cost of the benefits they receive and quite a few get away with it. However, it is a blunt instrument and some changes there may be in the offing.


I am still waiting for a reply on what needs to re-negotiated with the Troika.

As to the famous letter, in case you missed it, the MOF commented recently in the Dáil that it was like the Third Secret of Fatima; it may prove to be a bit of a disappointment.

“The USC is home-grown but it has the inestimable value of being levied on all income”

Incorrect. It is not levied on income from capital. Only wage slaves pay it. But I’d hardly expect you to call attention to that fact.


Comparing the tax burdens of workers in different countries only makes sense if you consider the public services they receive for those taxes. What does someone on 70k a year get in return for a marginal tax rate well north of 50%?

Re water, there is one great reason for having water charges – we can’t afford to supply water without them.

Lots of Irish families on 25-30k a year pay no net income taxes and receive quite a lot of services. Ronan Lyons has a good post on this if you look at his blog.

That the Troika insisted on water charges should make ditching them all the more attractive to a government desperate to placate the electorate.

The alternative is paying for water through our taxes, which in the Irish context is likely to be cheaper.


More income taxes? The people who want to do away with water charges are imagining it will be free.


Is USC not paid on rental income?

@Johnny Foreigner

Here’s how the game you’re playing works:

1) Cut public-sector spending to the bone;
2) Complain about how bad the public sector is;
3) Goto (1)

What you seem to be insisting on is that the public sector improve to, say, Scandinavian levels while being funded at levels way below that. Only then do you think it worthy of investment.

Meanwhile, a look at this graph shows that, at least in education, the Irish public service is delivering Scandinavian outcomes at a fraction of the cost.

@ Ernie

You can’t judge complex systems in terms of outcomes. Doing so is actually a very right-wing approach. Cardiovascular health outcomes, for example, have very little to do with spending on health care. Education outcomes are very insensitive to both spending on education and models of education delivery. Believe it or not the citizens of this State are influenced by a lot more than the local schools and hospitals.

Any update on the workings of the Universal Social Charge?

@JF, taxes is how we traditionally pay for publicly-provided consumer water supplies in Ireland. It’s how we do it right now. We have a long tradition of voting out politicians who try to bring in direct charges for water, and of being much less sensitive to similar amounts being raised through almost any form of taxation.


Believe or not,
The S stands for stabilty. We haven’t any.
The G stands for growth. We haven’t any.
The P stand for pact. A pact that that does not deliver.

““The USC is home-grown but it has the inestimable value of being levied on all income”

Not exactly true. In fact one of biggest USC freebies means that it is not applied to the Employers Pension contribution, if any, except in the case of the poor man’s pension scheme, the PRSA.

So a business doing well, even a bank or an airline (think of a recent example) can lob a big pot of money into an executives pension fund, and the executive pays no USC and no income tax on that amount. That’s a nice little earner. Now think of all the private companies that might be having a good year and the owner decides to put away €100,000 for himself into the company pension scheme. Its a nice little tax shelter for the €100,000, to be handed over to well informed fund managers who always quote those excellent returns.

Now, if you are a member of a PRSA scheme, set up to provide pensions, for the poorer people, that contribution is subject to USC in the hands of the employee, and there are tight limits above which it is also subject to tax.

All a bit complicated, I know, but a nice little tax break earner for those already earning well and in company schemes.

[Michael Hennigan has written on how the Pensions Boards to a stand at race meeting to advertise the poor mans pension scheme (the PRSA)]
[The minister of course takes a wealth tax cut of .75%, from all “funded'” schemes, whether of the rich or of the poor. ]

Off topic:

I want to get in touch with Brendan Walsh. His UCD address no longer works. Any ideas? Merci.

@ Ernie


What level of USC would you suggest?

@ Joseph Ryan

I did say it was a blunt instrument. The general point, however, is that it is the mass of taxpayers, not the exceptions, that weigh in the budgetary arithmetic. This is a sad fact which there is an apparent ingrained unwillingness in the Irish psyche to face up to.

But is the exceptions that weight most heavily on the psyche of the masses.


Dunno. If it’s universal then how about the same amount as for everyone else. But of course it’s only universal for working stiffs.

@ All

Off topic but of interest the election to the European Parliament of a representative of Die Partei.

“In the European Parliament election 2014, the PARTEI won 0.6% of German voters and thus one of the German seats. Top candidate Sonneborn announced that all candidates from their list, starting with him, would take the seat for one month, then retire and thus get the most money out of the European Union. He also said he believed that they were “not the craziest party in the European Parliament”.”

Who said the Germans do not have a sense of humour.

It may be worth mentioning that the reason the party gained a seat is because of a decision by the Constitutional Court that the normal 5% hurdle did not apply no doubt because in its view in an earlier ruling the European Parliament lacks the requisite democratic legitimacy of being based on the principle of one man one vote. It seems to have overlooked the fact that neither is the election to Bundesrat in Germany as is normal in bi-cameral systems. Indeed, the structure of EU institutions is strongly influenced by that in post-war Germany. Go figure!

@ Joseph Ryan

Not in my experience of other European countries. They seem to have a citizenry capable of making informed decisions based on facts and figures.

Fiddling while Rome burns comes to mind …

Angela’s Fiscal Corset & Promissory Note ‘commitments’ need to be tossed in the bond-fire …. the flatulent systems of money and corporate power can easily bear it …. and, thankfully, the wind direction is favourble …

… simply figure out the needs of the Irish Citizenry and act accordingly. This is basically what leadership in a functioning Republic does …

“I want to get in touch with Brendan Walsh. His UCD address no longer works. Any ideas?”

Bat signal ? : 0


Not in my experience of other European countries. They seem to have a citizenry capable of making informed decisions based on facts and figures.

The Irish people would like to collectively apologies to you for our ignorance and irrationality.

Is there anything we can do to win your approval? We know that the results of the European elections and the general atmosphere of rebelliousness among the EU’s great unwashed is very painful for you so please just let us know how we can help.

It’s depressing. Government policy boils down to

1. Increasing property prices
2. Hoping they can afford a tax break.

I’d like to see a candidate that wants to do the below. I can’t imagine such a candidate getting elected though.

1. Make child care affordable for people. Either state involvement or make it tax deductible against mothers income.
2. Make all future mortgage lending non-recourse.
3. Blend the private pension contribution tax break. e.g. 30% for all tax payers.
4. End the tax on private sector pensions.
5. Tax all pensions income above 80k at 100% (Combine threshold, not per pension).
5. Pass legislation to Tax Patrick Nearys pension ( and fellow proven incompetents ) at 100% on all amounts over the average industrial wage.
6. Change Inheritance tax on PPR. Each son/daughter gets the value of the average house price nationally. That’s it. 100% tax on the rest.
7 Extend PRSI to those over 66.
8. Change USC on rental income, so it’s charged before deductions.
9. Wealth tax, only charged on assets over 1 million, only exception to be ones PPR (already subject to property tax).
10. Proper policy on housing density and focus on quality family apartments with associated amenities including public transport.
11. Maybe a discussion about the Irish language. A referendum on whether to drop it or get serious on being a bilingual society. Centered on the costs of each option.
12. Referendum on legalizing weed and taxing it appropriately.

@ All

As a footnote to the off-topic item above, the German foreign minister, Steinmeier, and head of the – junior – SPD party in the governing coalition, has now opined in a wide-ranging interview in the FAZ that consideration should be given to an agreed common EU-wide minimum threshold for elections to the EP. This has little or no possibility of being agreed and simply serves as a distraction to the source of the German difficulty viz two more idiosyncratic decisions from the country’s constitutional court. It remains to be seen what influence the rather negative public reaction, given that the consequences have been multifarious – including, possibly, the very poor showing by the CSU in Bavaria – will have on the pending decision by the court on OMT (when it has the decision of the ECJ on the points referred to it which should, in principle and in law, be the final one).

@ All

Two links which suggest that the groundwork for a response to the wave of antipathy to Europe – as reflected in the surge of support for parties of both the extreme left and the extreme right in the elections to the EP – is being laid by various leaders; what some would undoubtedly describe as the elites.

First Schaeuble.

Then John Major.

Unless there is an improvement in the underlying economic situation, it seems doubtful, however, that a sudden conversion to “less Europe” will have much real impact.


A post in a couple of installments.

Steinmeier’s musings didn’t appear anymore on the FAZ main page when I was looking around noon, probably due to the very negative reactions to it.
Instead the headline was loud mouth Habermas was ranting what a totally undemocratic thing it would be if the next EU commission president would be selected according to the written rules : – )

Steinmeier is probably mostly sour grapes and to a lesser part a typical represent ant (this wording is a suggestion of my word program : -) of those (predominantly in Germany left/green) “elites”, who think they represent the “true” people, despite having no majorities, and then go jurisdiction shopping. If they lose their case repeatedly at the German Supreme Court, why not try to get some EP law. If Green party folks loose public referendums, try the Unesco, rare species, false claims of cheaper alternatives , to topple majorities …… : – )

In contrast to most other European countries the majorities parties in Germany have been pretty stable.

To characterize a 40.5% CSU vote in Bavaria, more than twice than for the next party as “very poor showing”, in the 4th and most irrelevant election this year, probably depends very much on a very specific point of view, or shall we just say bias?

Especially if you count the rest of the decisively “conservative” or more right parties to a total of 61%

A typical non-city voting district looks like this:

The CSU has an inherited iron lock on the direct mandate

@ francis

Before you get to installment B, I should point out that my only interest is in the impact on the judges of the Bundesverfassungsgericht of the popular – and very negative – response to their removal of the voting threshold with regard to EP elections. What they get up to in regard to domestic German concerns interests me not at all. But their idiosyncratic approach to issues that are properly the remit of the European Court of Justice interests me greatly, especially with regard to the impact of the currency that I use every day.

As to the CSU, I am basing my assessment on press coverage such as the attached.

Maybe the serial complainant on European issues before the constitutional court, Peter Gauweiler, has an opinion he can offer?


I think you missunderstood something. Where was there any negative reaction to the Supreme Court decision on the removal of the hurdle beyond the enemies of the constitution at the Spiegel?

The reaction in the comments at the FAZ was uniformly negative against the “enemy of the constitution” Steinmeier, who wants to overturn the Supreme Court Decision.

I think the majority of Germans is very aware that the endless alien attacks on the Bundesverfassungsgericht come from people who try to break treaties and steal from their neighbors, and therefore do not like the rule of law : – )

But the times of “Germany must” are over : – )


I put some thought into it, because I think this is pretty typical for the marginalisation of social democrats all over Europe and not just in Germany. With significant long term consequences.

The social democrats do not only have problems in the deep black south (Bavaria and Suebia, where the conservative part of the green party became the strongest party and has the prime minister, but in the east as well).

2 typical results:
The CDU is not as dominating as Bavaria, but nr 1, and the nr 2 is the Linke, but not the SPD
A rural result:
“Die Linke” still forms a critical mass, due to their old power positions, the CDU becomes the new, and the SPD is third place or less. Former FDP voters rotating to the AfD, as the conservative non-CDU alternative.

And that puts the SPD long term between the millstones of a dominant CDU, eastern Die Linke , and urban Greenies / Crazies.
No wonder that Steinmeier is so desperate to somehow get around the 2 slaps the Supreme Court gave out on the hurdle rate.

What Steinmeier does is jurisdiction shopping, and people like me don’t like it.

On the hurdle rate itself I am pretty indifferent, but after watching the local greenies to try 8 different things from the world Unesco to some local town meetings in order to topple a crystal clear referendum on a bridge, I also did not care about in substance, I became more sensitive to legal & democratic procedure.


Well that’s the best I have to go on so far! 🙂
I tried an outfit called that he seems to have some association with but no joy from their info address.


take a look at the map Ambrosius provided, of election results in France, in the parallel KOR thread. They seem to make up, don’t they?

Then take a look at the stability anchor Germany :,_endgueltiges_Ergebnis.svg

and finally at a similar map of England

not to forget a nice table of all countries, all factions:

the dutch having at least one guy in every single column : – )

And then think a little bit about what that means

@ francis

I am no fan of Steinmeier or Schaeuble trying to solve a domestic problem by extending it to the rest of Europe. Attacking the bona fides of sources that you happen not to like is not an argument. I am only interested in the actions of Germany that impinge on the EU and the interests of all member countries, especially those sharing a common currency. I have hazarded the view that a constitutional court wedded to idiosyncratic judgments loses credibility and this will deter it from pulling the house down when it “reviews” the decision of the ECJ on OMT (which it has no right to do unless all the constitutional courts in 27 other member states have an equal right).

Time will tell!


your claim of that the holy Bundesverfassungsgericht has no right to find on the constitutionality of actions of other entities, ……

what kind of citable judicial entity in Europe would support your very interesting and wild views?

P.S. : I am not sure what you mean with “bona fides of sources”? what sources? what credibility?






Negotiating with Germany at the mo is a lot like the IRA negotiating with Thatcher. Waste of time ….

Time for some ‘ballzy unilateralism’ of a genuine Hibernian variety.

@ David O’Donnell,

Even if the “Lady was not for turning”….. she did sign up to the Anglo Irish Agreement.

In addition several politicians who were very close to Ms Thatcher where murdered, and as we well know she narrowly escaped death herself.

Ireland is neither part of Schengen nor NATO.

As of now all anti German Terrorists are dead or in / through prison.

Or do I miss somebody?

Schäuble and Merkel have been repeatedly to Greece ….

@ francis

To answer your one specific question, this is the judicial entity.

The decision of the Bundesverfassungsgericht on OMT up to this point was a majority one, with the arguments of the two dissenting judges being to my mind, the persuasive ones.

There is little point in continuing these exchanges until (i) the ECJ gives ts judgement on the points referred to it by your constitutional court and (ii) we know what the reaction of the latter is. The economic and monetary context may be very different at that point. I am personally of the view that the majority of the judges will not pull the plug on OMT.

We will see!


on this we can agree, that an open conflict between the ECJ and the BVG s very unlikely.

Just for completeness for some other folks, the wordings were “within our mandate, …. whatever it takes”

and “strict conditionality”

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