Stephen Donnelly, on how the ECB actually owes Ireland €64 billion!

Ghandee

I seen the video on Stephen Donnelly adressing Martin Schulz at the oireachtas on Friday, and I am very surprised that it didnt garner more attention than it has tbh.

In the video (if someone can find link, please post it) Stephen simply, and in lay mans terms explains how Irish tax payers have been subjected to a scam, a dirty scam at that, by the ECB and various influential people in Europe.

Donnelly basically tells Martin Schulz that Ireland was never bailed out, and that in fact, we were mere 'middle men' saving the whold of Europe from banking contagion.

This is the extract from Donnelys speech.

The perceived wisdom among Europe's creditor countries is that Ireland mismanaged its affairs, was bailed out by them, and is now looking to be let off some of its obligations. There are moral overtones to this. A few months back our finance committee met with a delegation of the German finance committee. The tone was unmistakable -- you got yourselves into this, now stop whining and pay your debts. The Germans have no tolerance for debt, with 'schuld', the German word for debt, also meaning guilt.

We did make mistakes -- of that there is little doubt. And we are paying a very high price to correct those mistakes. But the bank debt is not one of them. Here, the numbers tell a very clear story.

Ireland is borrowing €67.5bn from the Troika. To date, we have given €64.1bn to the banks. The banks have in turn passed this on to the bondholders. At the time of the bank guarantee, Irish banks held €124bn in senior debt. All of this is being paid out in full.

Had the market been allowed to work, the banks would have been declared insolvent, and a creditors meeting would have been called. At this, an agreement to pay out less than the face value of the bonds would have been reached.

It is impossible to know what haircut would have been applied to the senior bondholders, but we do know this -- many of them sold on their bonds at a 50 per cent discount. In other words, they took a voluntary haircut of 50 per cent. It is not unreasonable therefore to suggest that a haircut of 50 per cent could have been agreed. In this case, the senior bondholders have been overpaid by €62bn.

So let's join the dots. First, €67bn goes from the Troika to the Irish Government, then €64bn (so far) goes from the Irish Government to the banks, and then €62bn in unnecessary payments goes from the banks to the senior bondholders.

Give or take a few billion, the Troika money essentially went straight from the troika to the bondholders. It was not used to run the country, to pay for teachers and nurses. And it was not used to keep the banks open, or to keep "money in the ATMs". The Irish banks could have restructured their debts while continuing banking operations for individuals and businesses. In fact, this is exactly what they did with the junior bondholders, and the ATMs worked just fine.

So if the Troika money was of absolutely no benefit to the Irish people, who actually gained from it?

Europe as a whole gained, by avoiding the possibility of contagion within the European banking system. But we're on the hook for it. We have temporarily surrendered our sovereignty over it, something a group of Irish men and women sacrificed everything to regain for us not so long ago.

Virtually nobody I speak to in the creditor countries understands this. It is not reflected in their mainstream media. They believe they have loaned us their hard-earned money to keep the lights on in Ireland, and that we are showing our gratitude by asking them for even more.

This can be tackled in two ways. First, our political leaders need to stop making public statements like people went "mad with borrowing" in "a system that spawned greed".

Instead, they need to start explaining to the citizens of the creditor countries that the troika money went straight to international financial institutions. Angela Merkel is up for re-election next year -- what her voters think about this issue matters a great deal.

Second, we should look for the return of the €64bn, not from the ESM, but from the ECB. The problem with looking for it from the ESM is that this is a fund of real money from the creditor countries. So any mechanism which uses the ESM to refund our €64bn really would end up costing German citizens money.

This would not be right -- they are no more responsible for the socialisation of financial sector losses than we are. The ECB, on the other hand, is.

We are told by the Government that it is the ECB which continues to insist senior bondholders are paid in full. A certain letter from Jean-Claude Trichet to Brian Lenihan may even provide documented proof that they forced us into the troika programme. And as luck would have it, the Irish banks still have in excess of €64bn of the ECB's cash on their balance sheets.

Were that amount to be written down by €64bn, the Irish State could then extract the same amount from the banks, leaving the balance sheets of the banks, well, balanced. And, usefully, smaller.

For very good reasons, central banks do not go around printing money and then writing it off. But in exceptional circumstances they do.

The ECB forcing the Irish people to provide €62bn of free cash to international investors in order to avoid contagion of the European banking system is just such a circumstance. In other words, if the ECB wants to cover the losses of professional investors, let it do it with its own money (and critically, at zero cost to any European citizen).

'If the ECB wants to cover the losses of professional investors, then let it do so with its own money...'

So this was my message to President Schulz: Ireland was not bailed out, nor is Ireland looking for a bailout. We do not seek charity, or benevolence from our European partners. But we do want our €64bn back.

In fact, we need it back.

If we don't get it, our debt to GNP ratio of 150 per cent means that we will inevitably, unwillingly, default on our sovereign debt. That would be very bad news for Ireland -- and for Europe.

If we do get it back, then as a country with a modern, hi-tech, efficient, export-oriented economy, we can contribute to the recovery of Europe.

Simple really.

http://www.independent.ie/opinion/analysis/stephen-donnelly-heres-why-the-64bn-is-ours-for-the-asking-3251469.html

Now, their will probably be a few posters (ususal suspects) that will immediately accuse Donnelly of basically talking a load of nonsense, and 'spouting a load of freeman nonsense'.

What i have read, and admittedly I have a limited understanding of economics, but what Stephen has said makes perfect sense to me, and I'm sure it will to lots of other folk reading it.

Now, let me break something down to possible doubters on these threads.

Who do you trust on serious, economical matters in Ireland, or the world for that matter?

Stephen Donnelly:, a 37 year old graduate of the Harvard Kennedy School of Government, having complete a Masters’ degree in Public Administration and International Development in 2008, who spent most of his career as a management consultant with McKinsey & Company (American global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions. It is recognized as one of the most prestigious consulting firms in the world, has proportionally produced more CEOs in large-scale corporations than any other company, and has been a top employer for new MBA graduates since 1996.)

Or,

Michale Noonan; Minister for finance, a 69 year old former school teacher.

Personally, I'm with Stephen Donnelly.

Pottler

It is very well put, but wiser/slyer heads than Stephens beat him to the punch with the structure of the loan. It was a deliberate action to head off this VERY rational argument and in effect, a very sneaky move by the ECB. NONE of the bailout money went to the banks - that was a strict condition of the "loan".
The loan went directly to the soverign and the soverign was expected to "find" the capital from its own reserves to give to the banks, which it did. The fact that our leaders were too dopey to see that this was a move designed strictly to undermine arguments like Stephen is putting forward and cut them off at the ground should they ever in the future decide that the terms were too harsh or that the loan was even unneccesary - the money went to the Irish State, the state then forwarded "other" money to the banks.
Cock-up number two. Cock-up number one was guaranteeing the banks in the first place. Sneaky by the ECB, IMF, but there you go.

connundrum

Speech is on his Facebook page, hopefully this link works.

http://t.co/i3Ln4fPD

Ghandee

connundrum wrote: »

Speech is on his Facebook page, hopefully this link works.

http://t.co/i3Ln4fPD

Works perfectly conundrum, thanks.

This video needs publicised and shown to the millions of Europeans out there who've been foolishly led to believe that they actually 'bailed the Irish out'.

There may have been a different headline to accompany Enda' s photo on time magazine if the truth was more widely broadcast.

Rotten to the core.

Biggins

*Awaits for the apologists and government enablers to appear with excuses*

Ghandee

Biggins wrote: »

*Awaits for the apologists and government enablers to appear with excuses*

The bat signal is about to shine ever so brightly Biggins.

washman3

We've already cut a deal with the ECB. we keep quiet about it and they'll see to it that our 'prime minister' gets his picture on the front cover of Time magazine..:D

donvito99

Who cares (even if true)?

Its not like Schultz was gonna write a cheque on the floor of the Dáil, won't happen either way.

Perhaps Donnelly could use his Harvard education and masters degree to suggest ways of fixing the huge problems inherent to Ireland that got us into this mess, that may or may not have been worsened by this unlikely scam.

Dockington

Biggins wrote: »

*Awaits for the apologists and government enablers to appear with excuses*

Dont think very many could argue with Donnelly's rationale Biggins. Even government supporters would have to agree that Ireland was never bailed out, Ireland had its arm twisted into covering the banking debt. Very good point by Donnelly that the ECB rather than the ESM should cover the 64bn. I am glad we have people like Donnelly still willing to go into government and fight for the Irish people.

Ghandee

donvito99 wrote: »

Who cares (even if true)?

Its not like Schultz was gonna write a cheque on the floor of the Dáil, won't happen either way.

Perhaps Donnelly could use his Harvard education and masters degree to suggest ways of fixing the huge problems inherent to Ireland that got us into this mess, that may or may not have been worsened by this unlikely scam.

Are you serious?

We know how much was given to the govt, we know how much they in turn gave to the banks, we also know (only to bloody well) how much the banks paid to bondholders.

Donnelly basically pointed out to Schulz that what was bestowed on Ireland was a scam.

What bit are you basically doubting may be true?

Biggins

Dockington wrote: »

Dont think very many could argue with Donnelly's rationale Biggins. Even government supporters would have to agree that Ireland was never bailed out, Ireland had its arm twisted into covering the banking debt. Very good point by Donnelly that the ECB rather than the ESM should cover the 64bn. I am glad we have people like Donnelly still willing to go into government and fight for the Irish people.

Its one of the few times that independents really can do some good.

Sully

Its the civil servants that run the country IMO.. The Ministers can be qualified in their respective roles but it wont make much of a difference.

Anyway, the Irish public wanted someone with a medical background in Health. Ye got it and now people say it was a bad idea.

*shrrugs*

Pottler

Ghandee wrote: »

The bat signal is about to shine ever so brightly Biggins.

The signal is a huge "C" that they shine onto the Spire. Couple of minutes later, out come the C....

donvito99

Ghandee wrote: »

Are you serious?

We know how much was given to the govt, we know how much they in turn gave to the banks, we also know (only to bloody well) how much the banks paid to bondholders.

Donnelly basically pointed out to Schulz that what was bestowed on Ireland was a scam.

What bit are you basically doubting may be true?

The idea of a conspiracy, a scam, Ghandee.

Ghandee

donvito99 wrote: »

The idea of a conspiracy, a scam, Ghandee.

I think the major scam might be the term that 'Ireland was bailed out'.

Millions of European citizens, from our 'creditor countries' falsely believe they bailed us out, they've been led to believe we got billions handed to us, so that we could continue to function as a country, so that public services would still operate, atm's would still have cash in them, the country could, at least function by hedging the necessary cash in order to do so.


However, the truth is, Ireland wasn't bailed out. The Irish govt were given money to give to the failed banks to give to bondholders.

The money, as Donnelly stated, didn't go to pay Gards/nurses/teachers/health services etc etc etc etc etc. the money was handed to the bondholders, using the Irish tax payer (as the middle man) to shoulder the weight.

Property taxes, water charges, cuts to services, wage cues, mass emigration, the list goes on and on and on.

The above mentioned problems are not as result of us 'being bailed out' we, the Irish public weren't.

Anonymous bondholders, multi Billionaires from countries we, as of yet don't know where, were bailed out,

Yet its us, and our children, and probably our Childrens children that will repay the cost of it.

Understand the scam now?

squod

People won't listen. I've been trying to get people to understand the simple concept of a ruse, scam, fraud etc. for ages.

https://www.youtube.com/watch?v=lSC2U2yYESw

ArmaniJeanss

Biggins wrote: »

*Awaits for the apologists and government enablers to appear with excuses*

Pottler wrote: »

The signal is a huge "C" that they shine onto the Spire. Couple of minutes later, out come the C....

Ghandee wrote: »

The bat signal is about to shine ever so brightly Biggins.

Not sure why anyone would bother explaining some of the flaws in Stephen Donnellys article, if they are going to pre-labelled as government agents, enablers or whatever for merely doing so.
It's a really petty way to debate imo.

shedweller

Debate all you want. The numbers speak for themselves.

RoundyMooney

I think Stephen Donnelly is possibly the brightest political figure that this Dáil has produced. I don't remember him putting a foot wrong once, since he started. And I don't agree with everything he says, but he sure says it well.

A pity we don't have another sixty or so of him.

oppenheimer1

Ghandee wrote: »

I seen the video on Stephen Donnelly adressing Martin Schulz at the oireachtas on Friday, and I am very surprised that it didnt garner more attention than it has tbh.

In the video (if someone can find link, please post it) Stephen simply, and in lay mans terms explains how Irish tax payers have been subjected to a scam, a dirty scam at that, by the ECB and various influential people in Europe.

Donnelly basically tells Martin Schulz that Ireland was never bailed out, and that in fact, we were mere 'middle men' saving the whold of Europe from banking contagion.

This is the extract from Donnelys speech.



http://www.independent.ie/opinion/analysis/stephen-donnelly-heres-why-the-64bn-is-ours-for-the-asking-3251469.html

Now, their will probably be a few posters (ususal suspects) that will immediately accuse Donnelly of basically talking a load of nonsense, and 'spouting a load of freeman nonsense'.

What i have read, and admittedly I have a limited understanding of economics, but what Stephen has said makes perfect sense to me, and I'm sure it will to lots of other folk reading it.

Now, let me break something down to possible doubters on these threads.

Who do you trust on serious, economical matters in Ireland, or the world for that matter?

Stephen Donnelly:, a 37 year old graduate of the Harvard Kennedy School of Government, having complete a Masters’ degree in Public Administration and International Development in 2008, who spent most of his career as a management consultant with McKinsey & Company (American global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions. It is recognized as one of the most prestigious consulting firms in the world, has proportionally produced more CEOs in large-scale corporations than any other company, and has been a top employer for new MBA graduates since 1996.)

Or,

Michale Noonan; Minister for finance, a 69 year old former school teacher.

Personally, I'm with Stephen Donnelly.

The minister doesn't work alone in his office. He has mandarins in the department of finance qualified in macroeconomics who will advise him on what decision to take. If he doesn't have the expertise at his direct disposal in the CS he seeks outside guidance form consultants. Ultimately the final decision lies with the minister but I would argue the real power lies with the Civil Servants who frame his options.

The minister and his team also have access to all the information necessary to take such decisions unlike outside commentators. This is what really separates them from the rest of us. They also have to take into account political considerations and how their plans interact with their partners.

The idea that an irish politician is taking a difficult course just to please his partners and not because he has to is laughable. If there was any way Noonan could avoid placing pain on the electorate and lessen damage to his partys re election chances he would do it in less than a heartbeat.

Also the idea that the ECB can write off a €64bn loss without effect to the european taxpayer is simply not true. Firstly if it didn't print the money it would need to be recapitalised by european taxpayers. Secondly if it did it would dilute the value of money already in circulation. However more importantly it would undermine confidence in the currency. If they can do something like this for a small country like Ireland, whats stopping them printing Italy or Spain out of trouble?

Donnellys thesis is fundamentally flawed and is a piece of populist trash.

K-9

Pottler wrote: »

NONE of the bailout money went to the banks - that was a strict condition of the "loan".

Excellent post, the amount of people and politicians who don't know this is staggering. The troika washed their hands of any bailing out bank debt, probably because the ECB was keeping Irish banks alive.

Dockington

ArmaniJeanss wrote: »

Not sure why anyone would bother explaining some of the flaws in Stephen Donnellys article, if they are going to pre-labelled as government agents, enablers or whatever for merely doing so.
It's a really petty way to debate imo.

Cool, no prejudgements so. Please proceed in pointing out the flaws.

K-9

oppenheimer1 wrote: »

The minister doesn't work alone in his office. He has mandarins in the department of finance qualified in macroeconomics who will advise him on what decision to take. If he doesn't have the expertise at his direct disposal in the CS he seeks outside guidance form consultants. Ultimately the final decision lies with the minister but I would argue the real power lies with the Civil Servants who frame his options.

Didn't it come out about how few economists worked in the Department of Finance? As Sir Humphrey would put it in Yes, Minister, "why would economists be needed in the Dept. of Finance?"

Biggins

Biggins wrote: »

*Awaits for the apologists and government enablers to appear with excuses*

You do realise that by providing pretty poor-quality opposition to everything a government does that you're a pretty big part of the government-enabling machinery?

Sorcha16

Stephen Donnelly is a breath of fresh air in a vacuum of bullsh*t

jimmycrackcorm

It's a pointless argument as it is too late now to undo.

petersburg2002

Asking too much I suppose to expect to have Ministers with his qualifications. Guess we are stuck with the teachers. English MPs make our bunch of TDs look like inarticulate illiterates.

squod

jimmycrackcorm wrote: »

It's a pointless argument as it is too late now to undo.

I disagree. We'll have to keep the pressure up if we want convictions in the future for shananigans like this. Pieces like this keep the topic in focus.

Biggins

Deleted User wrote: »

You do realise that by providing pretty poor-quality opposition to everything a government does that you're a pretty big part of the government-enabling machinery?

I disagree about the quality of my opposition.
However your entitled to your opinion of my opposition. Fair enough.

That said, at least be it bad or somewhat good, at least I (and others) are at least trying and not accepting to go total complacent like others, when they feel something needs further looking at.

Jev/N

While it's hard to argue with the points made by him, regardless of the numbers and possible eventualities, what would have been the story is the banks failed i.e. descended into full-blown insolvency?

Would the deposit guarantees have kicked in? And been successful?
Would there have been a run on the banks, notwithstanding said guarantees?
Or would the government just seek to buy selected insolvent banks i.e. main consumer/deposit banks?

the groutch

is this supposed to be a secret?
this is all it was ever about from day 1, protecting our European "friends" who inflated the bubble by throwing cheap money at our banks.

Dockington

oppenheimer1 wrote: »

The minister doesn't work alone in his office. He has mandarins in the department of finance qualified in macroeconomics who will advise him on what decision to take. If he doesn't have the expertise at his direct disposal in the CS he seeks outside guidance form consultants. Ultimately the final decision lies with the minister but I would argue the real power lies with the Civil Servants who frame his options.

The minister and his team also have access to all the information necessary to take such decisions unlike outside commentators. This is what really separates them from the rest of us. They also have to take into account political considerations and how their plans interact with their partners.

The idea that an irish politician is taking a difficult course just to please his partners and not because he has to is laughable. If there was any way Noonan could avoid placing pain on the electorate and lessen damage to his partys re election chances he would do it in less than a heartbeat.

Also the idea that the ECB can write off a €64bn loss without effect to the european taxpayer is simply not true. Firstly if it didn't print the money it would need to be recapitalised by european taxpayers. Secondly if it did it would dilute the value of money already in circulation. However more importantly it would undermine confidence in the currency. If they can do something like this for a small country like Ireland, whats stopping them printing Italy or Spain out of trouble?

Donnellys thesis is fundamentally flawed and is a piece of populist trash.

Donnellys point was regarding the perception by citizens of the creditor countries that Ireland was bailed out by their taxpayers. He has a very valid point.

Regarding your point on the dilution of the currency and damaging the confidence in the Euro. One of the functions of a Central bank is the regulation of the banking sector and acting as lender of last resort. Donnelly is not calling for the ECB to cover the irish sovereign debt caused by the general government deficit. He is calling for the banking related debt to be taken off the sovereign balance sheet.

I would suggest that the effect of such a policy on the reputation of the Euro would be positive if it is accompanied by regulations to ensure reckless lending by european banks cannot reoccur.

Biggins

Biggins wrote: »

I disagree about the quality of my opposition.
However your entitled to your opinion of my opposition. Fair enough.

That said, at least be it bad or somewhat good, at least I (and others) are at least trying and not accepting to go total complacent like others, when they feel something needs further looking at.

Nah I just realise that apparently noble slight rabble-rousing opposition with little follow-through is exactly the kind of opposition that governments thrive on and that what would actually be needed to effect real change is something that just about no-one would be willing to do or support. I just don't feel the need to tell myself that I'm doing something to make a difference when I'm not. :pac:

Pottler

K-9 wrote: »

Excellent post, the amount of people and politicians who don't know this is staggering. The troika washed their hands of any bailing out bank debt, probably because the ECB was keeping IrishEuropean banks alive.

Thanks, but the reason they wouldn't allow the bailout funds be allocated directly to the banks is because Banks go bust/default/have a brain/whinge a lot afterwards/can't actually afford it... somtimes.
They handed it to the State because it is waaaaay harder for a State to default and much easier to twist a soverigns arm into meeting bullsh1t levels of repayment on a totally bullsh1t "bailout". No Politician can ever be seen to encourage a default as
a.they lack the balls.
b.they would be held accountable by the population for generations to come for "wrecking the economy", which would actually be the opposite of the truth, tbf.
c.just not going to happen as it is not in their own personal financial interest, bit like turkeys voting for christmas.
So the dumb repayments continue.

Iceland V Ireland? there's more c's in Iceland, and you have to be a c... to get through a tough situation. We don't have any tough, hard minded politicians, we just have a load of whipped backslappers.

Biggins

Deleted User wrote: »

Nah I just realise that apparently noble slight rabble-rousing opposition with little follow-through is exactly the kind of opposition that governments thrive on and that what would actually be needed to effect real change is something that just about no-one would be willing to do or support. I just don't feel the need to tell myself that I'm doing something to make a difference when I'm not. :pac:

Well its up to yourself if you want to try making a difference or not.
I hope you and others do.
Some including I might have different opinion about change but at least any change currently is done right with transparency and honesty, is better than none at all.
So far, we are lacking some of the above very regularly.

Ghandee

Dockington wrote: »

Donnellys point was regarding the perception by citizens of the creditor countries that Ireland was bailed out by their taxpayers. He has a very valid point.

Regarding your point on the dilution of the currency and damaging the confidence in the Euro. One of the functions of a Central bank is the regulation of the banking sector and acting as lender of last resort. Donnelly is not calling for the ECB to cover the irish sovereign debt caused by the general government deficit. He is calling for the banking related debt to be taken off the sovereign balance sheet.

I would suggest that the effect of such a policy on the reputation of the Euro would be positive if it is accompanied by regulations to ensure reckless lending by european banks cannot reoccur.

Couldn't have put it better myself.

It has been, and is a scam from start to finish.

Donnelly, eye firmly on the ball rightly points out that this sum of €64 billion, conveniently enough is showing on our banks balance sheets.

And as luck would have it, the Irish banks still have in excess of €64bn of the ECB's cash on their balance sheets.

Were that amount to be written down by €64bn, the Irish State could then extract the same amount from the banks, leaving the balance sheets of the banks, well, balanced. And, usefully, smaller.

Some folk are blinded by the glaringly obvious though.

Biggins

Biggins wrote: »

Well its up to yourself if you want to try making a difference or not.
I hope you and others do.
Some including I might have different opinion about change but at least any change currently is done right with transparency and honesty, is better than none at all.
So far, we are lacking some of the above very regularly.

What's needed for change would be immediately condemned by you and most people, likely by myself as well.

Biggins

Deleted User wrote: »

What's needed for change would be immediately condemned by you and most people, likely by myself as well.

I'm honestly open-minded to anything put forward.
Sadly so far (and its only my own opinion here although others might agree), any changes made so far - or in line to come in, a lot of them have questions hanging over them and possibly are not as what they might appear.

Stephen Donnelly, on the ECB at least indicates this partly - even if some do not agree with him fully (which is fair enough).

Biggins

Biggins wrote: »

I'm honestly open-minded to anything put forward.
Sadly so far (and its only my own opinion here although others might agree), any changes made so far - or in line to come in, a lot of them have questions hanging over them and possibly are not as what they might appear.

The wheels are in motion and much of the bank debt will end up getting folded into the ESM yoke like it should have in the first place. We took on the bank debt off our own backs (good old representative democracy) which wasn't the fordiners' plan and for their own sakes they can't be seen to be letting us off too easily. Without the bank debt we'd still have the ludicrous spending habits we have and all voting does is change about 2-5% of that spending and who gets it. The unions and their cronies will keep getting paid while the kids will pay for it. To get to where other civilised countries are we need higher taxes on everyone but due to our wonderful habit of inflation it seems unfair to put it on lower earners.

As badly as some people, and it's still only some, have been affected the vast majority of us are still doing fine and the alternative is unpalatable to many despite the pissing and moaning they'll do about the current situation. Is anyone in favour of 20-30% cuts in all government departments instantly? Closing tax loopholes in property and the like would be nice but a bit ineffective with so little happening there. NAMA or whatever it's called these days was set up to prevent the crash being even harsher/quicker and the policy that follows from it will keep the status quo.

The conspiracy that Europe somehow inflated our bubble is just silly. There are methods other than monetary policy to take heat out of an economy and we did none of them. We were running at 5% inflation and still increasing spending and cutting (percentage-wise anyway) taxes. What did the opposition complain about? Not enough spending. What did the unions complain about? Not enough spending.

To get out of the current mess would require starting from the ground up and I doubt anyone has the belly for it because many would be surprised what it would cost them in the short-term.

K-9

I don't know, the ECB was funding Irish banks for over a €100 Billion at that stage. Firstly because of the guarantee, which was an Irish sovereign decision, then Nama. I don't think there was any conspiracy, the Irish Government wasn't monitered enough and the EU bodies trusted them.

Eventually Cowen et al made so many mistakes, sure AH would be a record of just how many mistakes, the Irish Government could not be trusted to be left to their own devices anymore.

Pottler wrote: »

Thanks, but the reason they wouldn't allow the bailout funds be allocated directly to the banks is because Banks go bust/default/have a brain/whinge a lot afterwards/can't actually afford it... somtimes.
They handed it to the State because it is waaaaay harder for a State to default and much easier to twist a soverigns arm into meeting bullsh1t levels of repayment on a totally bullsh1t "bailout". No Politician can ever be seen to encourage a default as
a.they lack the balls.
b.they would be held accountable by the population for generations to come for "wrecking the economy", which would actually be the opposite of the truth, tbf.
c.just not going to happen as it is not in their own personal financial interest, bit like turkeys voting for christmas.
So the dumb repayments continue.

Iceland V Ireland? there's more c's in Iceland, and you have to be a c... to get through a tough situation. We don't have any tough, hard minded politicians, we just have a load of whipped backslappers.

Biggins

Deleted User wrote: »

...To get out of the current mess would require starting from the ground up and I doubt anyone has the belly for it because many would be surprised what it would cost them in the short-term.

I hear what your saying and its a valid opinion with good rational thinking behind it.
I would add though that we need also to be starting from the top down in some way, if possible besides from the ground up.
The 'ground' (You, me, and others) cannot take much more.
An empty sack cannot stand - and the government in their rush to export billions elsewhere is emptying the so called 'sack'.

The 'sack' in our case being our pockets, our wallets and savings.
If the government continue to empty them the way they are now - there will be nothing, absolutely nothing left to spend - and what will be the knock on effects of that!
We cannot afford to continue down the road we are on.
Some latest economic forecasts last week indicates this.

oppenheimer1

Dockington wrote: »

Donnellys point was regarding the perception by citizens of the creditor countries that Ireland was bailed out by their taxpayers. He has a very valid point.

And this perception is entirely correct. Ireland made a promise to guarantee all of the Irish banks debt. It turned out that it wasn't able to meet that obligation. It had to turn to the troika for help. Ireland was bailed out by the tax payers of Europe and the members of the IMF.

Regarding your point on the dilution of the currency and damaging the confidence in the Euro. One of the functions of a Central bank is the regulation of the banking sector and acting as lender of last resort. Donnelly is not calling for the ECB to cover the irish sovereign debt caused by the general government deficit. He is calling for the banking related debt to be taken off the sovereign balance sheet.

I would suggest that the effect of such a policy on the reputation of the Euro would be positive if it is accompanied by regulations to ensure reckless lending by european banks cannot reoccur.

It was never in the ECB's remit to act as a lender of last resort. Its duty is in fact to protect the value of the currency at a stable level.

I agree that the removal of the bank debt from the Irish sovereign balance sheet could be positive for the euro however the method you and Donnelly are proposing to finance it would not be. If the ECB uses its capital to pay for it well then it will need to be recapitalised like our own banks after the losses. It could of course create currency to pay for it but as I said, this would undermine confidence in the currency and lead to speculation that it would bail out larger economies in a similar fashion. This would destroy the value of the currency and lead to rampant inflation.

Biggins

Biggins wrote: »

I hear what your saying and its a valid opinion with good rational thinking behind it.
I would add though that we need also to be starting from the top down in some way, if possible besides from the ground up.
The 'ground' (You, me, and others) cannot take much more.
An empty sack cannot stand - and the government in their rush to export billions elsewhere is emptying the so called 'sack'.

Bottom-up is the only way anything can be achieved. It's never happened, it's always the middle that effects "change" that ends up going back to where it started within a decade or so. Well, unless plenty of violence or general despotism is present.

The 'sack' in our case being our pockets, our wallets and savings.
If the government continue to empty them the way they are now - there will be nothing, absolutely nothing left to spend - and what will be the knock on effects of that!
We cannot afford to continue down the road we are on.
Some latest economic forecasts last week indicates this.

Big changes worldwide are due and on principle overdue. There isn't enough for everyone to live half as well as the worst-off in Ireland. Don't believe the political crap behind the Arab Spring, it was due to economics and more of the same is on the way. 100s of thousands protested in Israel over spiralling cost of living increases. American and Europe are the only "old" areas that have the clout to dampen such impacts but it isn't done by magic.

Dockington

oppenheimer1 wrote: »

And this perception is entirely correct. Ireland made a promise to guarantee all of the Irish banks debt. It turned out that it wasn't able to meet that obligation. It had to turn to the troika for help. Ireland was bailed out by the tax payers of Europe and the members of the IMF.



It was never in the ECB's remit to act as a lender of last resort. Its duty is in fact to protect the value of the currency at a stable level.

I agree that the removal of the bank debt from the Irish sovereign balance sheet could be positive for the euro however the method you and Donnelly are proposing to finance it would not be. If the ECB uses its capital to pay for it well then it will need to be recapitalised like our own banks after the losses. It could of course create currency to pay for it but as I said, this would undermine confidence in the currency and lead to speculation that it would bail out larger economies in a similar fashion. This would destroy the value of the currency and lead to rampant inflation.

Firstly I see your point that the initial banking guarantee was entirely Irelands own decision. However, Ireland was instructed by europe to keep paying the bondholders. The "bailout" is a loan which will be paid back with interest and it was in Europes interest to ensure that contagion did not cause a wider banking crisis across europe. As Donnelly pointed out the banks were insolvent and could have easily written down their debt....anyway this has been discussed to death over the past couple of years.

Im for the negotiation route to reduce the burden of the banking bailout on the irish people. I believe we will get a deal of some sort. I had never previously considered that the ECB should be the ones to cover the cost of reducing Irelands bank debt burden, I always assumed it would be the ESM. However having read Donnellys point earlier this evening I thought he made a fair point and its worth considering.

You are wrong about the ECB not being the lender of last resort for the banking system. It certainly is not the lender of last resort for the sovereign but lender of last resort to the banking system is one of the basic functions of a central bank and it has been acting as such since the liquidity in dried up in the interbank market post Lehman in 2008. You are right however that its main remit is to keep inflation around 2%, it has no remit for increasing employment. This is the German system, the Germans are very scared of inlation perhaps due to their history.

However, I think extraordinary times call for extraordinary measures and some thinking outside the box. Donnelly is not proposing the central bank bailing out the sovereign (Draghi has suggested re unlimited buying of sovereign bonds which i would not agree with), he is suggesting it taking responsibility for the banking system. The inflationary pressure of printing new money will somewhat be offset by the contracting european economy. Some might suggest that it would have a stimulatory effect by raising inflation expectations and causing consumers to increase current spending. Anyway this post is going way past the tldr stage and Im more musing over Donnellys suggestion anyway, not saying its definitely the way to go

K-9

Part of the Troika bailout was a contingency fund for banking bail outs. This has never been drawn down as far as I know. We seem to be painting that as some conspiracy, rather than maybe the Troika actually properly went into the banks, and put a proper true and fair estimate on the liability, which turned out too high. We got so used to our lot not getting a handle on the figure, the Troika lot getting some sort of accurate figure is deemed as a conspiracy.

Pottler wrote: »

Thanks, but the reason they wouldn't allow the bailout funds be allocated directly to the banks is because Banks go bust/default/have a brain/whinge a lot afterwards/can't actually afford it... somtimes.
They handed it to the State because it is waaaaay harder for a State to default and much easier to twist a soverigns arm into meeting bullsh1t levels of repayment on a totally bullsh1t "bailout". No Politician can ever be seen to encourage a default as
a.they lack the balls.
b.they would be held accountable by the population for generations to come for "wrecking the economy", which would actually be the opposite of the truth, tbf.
c.just not going to happen as it is not in their own personal financial interest, bit like turkeys voting for christmas.
So the dumb repayments continue.

Iceland V Ireland? there's more c's in Iceland, and you have to be a c... to get through a tough situation. We don't have any tough, hard minded politicians, we just have a load of whipped backslappers.

poeticseraphim

connundrum wrote: »

Speech is on his Facebook page, hopefully this link works.

http://t.co/i3Ln4fPD

not working

Ghandee

poeticseraphim wrote: »

not working

Works fine for me?

AngryHippie

Is there anything that constitutionally requires that deal to have been ratified by a majority vote, as opposed to a majority turnout?
Also how come there is no mechanism for an overseas vote for Irish citizens overseas ? I find that to be rather frustrating. Makes me want to completely abandon any hope of going home...

seamus

AngryHippie wrote: »

Is there anything that constitutionally requires that deal to have been ratified by a majority vote, as opposed to a majority turnout?

No, there is no requirement to have held a vote on the deal, hence they didn't.

Referenda on major issues like this isn't always a good idea because as we've seen from the past few referenda, they're too often hijacked by fringe groups and used as a way of protesting rather than voting on the actual issue.

The point of a referendum is to ask the population, "How do you feel about X". The response shouldn't be, "I hate Y more than I care about X, so I'm going to vote against X in protest".

Also how come there is no mechanism for an overseas vote for Irish citizens overseas ? I find that to be rather frustrating. Makes me want to completely abandon any hope of going home...

Because there's a fair argument which says that if you don't live in a country you shouldn't have any say in how it's run.

Ghandee

seamus wrote: »

No, there is no requirement to have held a vote on the deal, hence they didn't.

Referenda on major issues like this isn't always a good idea because as we've seen from the past few referenda, they're too often hijacked by fringe groups and used as a way of protesting rather than voting on the actual issue.

The point of a referendum is to ask the population, "How do you feel about X". The response shouldn't be, "I hate Y more than I care about X, so I'm going to vote against X in protest".

Because there's a fair argument which says that if you don't live in a country you shouldn't have any say in how it's run.

I agree with you ref the vote while not living in Ireland Seamus, why should some person living in Australia for twenty years, unlikely to ever return to Ireland really have a vote on something that's ever likely to have an impact on their lives?

However, I do think we as a country should have been given an option on the bank bailout via a referendum of some sort.

Its a bit hypocritical holding a referendum on the fiscal treaty, yet pouring all the bank debt onto our sovereignty while giving us no opt in opt out on the matter.

suicide_circus

Can anyone give a compelling argument against Donnelly's assertions ?