Germany: No Deal on Ireland’s Bank Debt

Despite ratifying the Fiscal Compact by a sizable margin, which boosts the case for the Compact in other EU member states, it appears any concessions Enda Kenny hoped for on our bank debts on foot of the ratification may not materialize. Apparently any renegotiation would send a “negative signal”. From the Irish Times piece:

“We see no need for movement at the moment,” said Martin Kotthaus, spokesman for finance minister Wolfgang Schäuble.

Super.

McWilliams on the Fiscal Treaty

David McWilliams summarizes his main arguments against the Fiscal Compact in the FT today.

Update, and in the interests of balance, thanks to commenter Scorpio, here’s a summary of 44 economists on the Treaty.

Mortgage Arrears Crisis deepens

To the surprise of exactly no-one the residential mortgage arrears problem has continued to worsen. The Central Bank’s Q1:2012 figures show that 116,288 accounts were either in arrears of over 90 days or had been restructured in some shape or fashion.

10.2% of private residential mortgage accounts were in arrears.

There are others, but right now two important (and updated) questions arise:

  1. at what point will this growth in arrears begin to slow appreciably? As Jagdip and Carson in the comments point out, the rate has fallen off but clearly arrears levels are increasing at an alarming rate.
  2. what projected effect will the proposed personal insolvency legislation have on these arrears going (ahem) forward?

Patrick Kinsella on the Treaty

Patrick Kinsella (no relation) writes on the Treaty in today’s Irish Times as the Taoiseach assures us the Treaty text won’t change. From Kinsella’s piece:

The Government is rigorously following the policies required by the troika of intergovernment lenders who support our current spending deficit and our bank rescue, and voting No will not change that. But the political situation in Europe is changing radically, and it is absurd to think that our partners will leave us high and dry for future loans because we reject a legal straitjacket on future policy demanded in the dying days of the Merkel regime. And don’t think the ideological rebalancing demanded by the fiscal treaty is limited to the euro zone members: the final article says “steps will be taken” to incorporate the substance of it “into the legal framework of the European Union”.

The political context for the social market economy in the 1950s and 1960s was the spectre of communism that haunted Europe. The context now includes the indignados of Spain, riots in Greece, and right-wing parties. Those of us with no great wealth other than our education worry for our children: where will they work, how will they live?

On this issue, the Labour Party in Government has abandoned its traditional constituency, signing up to support the banks at the expense of equality, jobs and fair working conditions. It has abandoned the social pillar of the European Union in the interests of an illusory “stability”. I sense that its traditional constituency will abandon Labour at the next election.

In the meantime, those of us who think that on balance the European Union has been good for Ireland, and do not want to see that balance overturned, have compelling reasons to vote No to this treaty.

Regulatory Complexity and Uncertainty

Vincent O’Sullivan and I write on this topic, applied to the case of the Capital Requirements Directive IV, on the Harvard Law School Forum on Corporate Governance and Financial Regulation here. A related talk I gave at the IIEA is here.