The WSJ carries an interesting report on how multi-country banking groups are using LTRO to ring fence affiliates in troubled economies (including Ireland), in order to limit the exposure of parent banks.
Some of the Central Bank’s main contributors to Friday’s SME conference report on how debt overhang is constraining bank lending to SMEs in this VOX article.
Colm takes a realpolitik look at the fiscal treaty in the Sindo today, and takes aim at the ECB and EU Commission towards the end. He argues that despite the treaty’s many flaws we should vote for it. From the piece:
Opposition parties appear to be limbering up for a referendum on austerity. There can be no referendum on austerity. The Irish budget deficit is far too big and will have to be reduced sharply, and soon, in any plausible scenario. That means more expenditure cuts and more tax increases.
Many voters will see the referendum as an opportunity to register a verdict on the behaviour of the ECB and EU Commission towards Ireland. They have done abysmally, culminating in the insistence by the ECB that a bust Exchequer should pay unguaranteed bondholders in a bank that has already closed.
No central bank has ever imposed such a burden on a bust sovereign anywhere in the world, to my knowledge. Fortunately, this negative verdict is shared by the International Monetary Fund, which called on Friday for a straightforward reversal of this extraordinary ECB policy.
The referendum should be supported. There will be later and better opportunities to reconsider the terms of engagement with the new Europe.
Here is the European Commission’s report.
A reader recommends this briefing paper.