Cyprus bailout deal #2

marienbad

clairefontaine wrote: »

Part of the problem is that this was done so clandestinely that we don't know why they rejected the idea of selling stocks and bonds. In fact we have no idea what went on in there.

They tried selling some of their assets [the ports] to the Russians, but the Russians werent interested. Perhaps if they hadnt left it to the last possible moment they might have found another buyer.

5% of those accounts were Russian. Big wow.

And yet..... there has been no consideration for what has led them to this place or how to avoid it again, and no doubt the lack of transparency in banking is part of that.

Why did this happen so fast? In the matter of a week this crisis hit.

5% of the accounts ??? Is that by the number of accounts or the value of the accounts ?? Big difference ?

And it did'nt happen that fast - the building falling down happened very fast , but it had been condemned for quite some time.

So who do you think is primarily responsible for this mess ? You keep using they they they , so who is they ?

nowanathiest

the Cyprus crisis occurred because their banks were massively exposed to Greek losses, which has been propped up to prevent Spain & Italy from defaulting to France and Germany......it's a giant ponzi, with the little guy at the bottom made to pay.........sound familiar??? it must, as the Irish citizens are propping up the Irish banks who are propping up French & German banks so that their bondholders and shareholders do not suffer any losses.

clairefontaine

Nate--IRL-- wrote: »

You keep saying "Theft". Just so it is clear, without a loan from somebody, the depositors lose 100% of their savings.

The EU is prepared to lend approx €10bn of the €17bn needed. The Cypriots must come up with the other 7 somehow. Borrowing another €7bn will be next to impossible as the Debt to GDP ratio will be too high and the country will default. It simply cant pay back €17bn.

Cyprus can't borrow what is needed to cover the banks liabilities (Primarily Deposits)without busting the country. The situation as it stands is the depositors lose 100%. So what are the alternatives?

Nate

You put your money in a deposit account, you expect it to be there. Yes it is theft, if someone can just stick their fingers in and take it.

Because we dont have transparency, they cannot be held accountable. Did any of them take pay cuts? Did any of them sell national assets? Did any of them come up with alternatives?

And why so quickly?

They have no destroyed any fabric of trust in banking the EU over E10, and you cannot put a price on what they have ruined with this action.

marienbad

clairefontaine wrote: »

You put your money in a deposit account, you expect it to be there. Yes it is theft, if someone can just stick their fingers in and take it.

Because we dont have transparency, they cannot be held accountable. Did any of them take pay cuts? Did any of them sell national assets? Did any of them come up with alternatives?

And why so quickly?

They have no destroyed any fabric of trust in banking the EU over E10, and you cannot put a price on what they have ruined with this action.

I- There was no money left to steal from deposit accounts
2- Who is they ??

nowanathiest

clairefontaine wrote: »

You put your money in a deposit account, you expect it to be there. Yes it is theft, if someone can just stick their fingers in and take it.

Because we dont have transparency, they cannot be held accountable. Did any of them take pay cuts? Did any of them sell national assets? Did any of them come up with alternatives?

And why so quickly?

They have no destroyed any fabric of trust in banking the EU over E10, and you cannot put a price on what they have ruined with this action.

a bank is a public institution, it is not your personal piggy bank. You give it money to use on trust.....that they will use their expertise to make an adequate profit on it and be able to return your capital. There are no real guarantees........the irish government's bank guarantee was based on securing bank debt against the national pensions fund.........and when that runs out what are they going to pay your old age pensions with?

In the meantime Ritchie Boucher (BoI) is still paying himself large sums and his personal pension with a private company will be quite safe....or will it? if they can raid bank accounts what's to stop them from raiding the private pension funds if push comes to shove? I believe that nothing will be off the table when it comes down to it.

clairefontaine

marienbad wrote: »

I- There was no money left to steal from deposit accounts
2- Who is they ??

And there we have it. The banks were insolvent. The money was already gone.

marienbad

clairefontaine wrote: »

And there we have it. The banks were insolvent. The money was already gone.

And who do you blame for that ? And once again can you tell me who is this 'they' you keep bringing up ?

clairefontaine

nowanathiest wrote: »

a bank is a public institution, it is not your personal piggy bank. You give it money to use on trust.....that they will use their expertise to make an adequate profit on it and be able to return your capital. There are no real guarantees........the irish government's bank guarantee was based on securing bank debt against the national pensions fund.........and when that runs out what are they going to pay your old age pensions with?

In the meantime Ritchie Boucher (BoI) is still paying himself large sums and his personal pension with a private company will be quite safe....or will it? if they can raid bank accounts what's to stop them from raiding the private pension funds if push comes to shove? I believe that nothing will be off the table when it comes down to it.

Can you explain what you mean by "public institution". There are both private banks and nationalised banks, so yes sometimes it is a personal piggy bank. That is why there is a guarantee on them under 100k.

I agree with the rest of what you say though.

No rule of law means nothing will be off the table. You are right about that. And we got fair warning with this episode.

clairefontaine

marienbad wrote: »

And who do you blame for that ? And once again can you tell me who is this 'they' you keep bringing up ?

I cant tell you can I? That is part of my point. No transparency. Ireland is the same, they wont name the bondholders.

G Power

clairefontaine wrote: »

Why did this happen so fast? In the matter of a week this crisis hit.

because if this happened here it would go practically unchallenged, except for empty soundbytes from the opposition side of the dail

but when the troika try to steal the life from a proud nation they stand up to it and cause a "crisis"

Nate--IRL--

clairefontaine wrote: »

You put your money in a deposit account, you expect it to be there. Yes it is theft, if someone can just stick their fingers in and take it.

What are you talking about? There is no money to take. Its gone.

Nate

nowanathiest

clairefontaine wrote: »

Can you explain what you mean by "public institution". There are both private banks and nationalised banks, so yes sometimes it is a personal piggy bank. That is why there is a guarantee on them under 100k.

I agree with the rest of what you say though.

No rule of law means nothing will be off the table. You are right about that. And we got fair warning with this episode.

All banks are public companies with shareholders. Don't be sidetracked by private/nationalised tags. A nationalised bank is a failed business that is being artifically supported by the government until it is able to fund itself independently. Over the decades some banks were nationalised from time to time, but it would have been one in isolation. This is the first time that so many banks have failed at the same time and the debt is too big for governments anywhere to cover.

They are keen to have you believe that they have solutions and it will all be ok. They don't have any adequate solutions and it will not be ok. There isn't enough cash in the world to cover it all, so we will have to keep playing musical chairs until someone is left standing. This week it was the Cypriots.

marienbad

clairefontaine wrote: »

I cant tell you can I? That is part of my point. No transparency. Ireland is the same, they wont name the bondholders.

But you seem to be sure the EU is at fault , how is that then ?

I believe the bondholders have been named quite a few times at this stage , I think links have even been provided from this site .

KyussBishop

As for alternatives, none of them are in Cyprus's hands, but they are in the hands of the EU overall; Yanis Varoufakis has an entire framework laid out for EU recovery in his Modest Proposal, but the EU seem to have forever stalled (through their acts with Cyprus) any potential for the banking reform that proposal documents.

A large part of that, is centralization of government debt within the EU with eurobonds, and a central investment program through the European Investment Fund for recycling surplus savings throughout the EU (see the document for details); this could fund not just Cyprus, but the entire EU.

There is also (not a part of the 'Modest Proposal') good old fashioned money creation from the ECB, which can be directly used to fund things, limited by inflation targets; that's a whole other more controversial topic though, where it's impossible to discuss without primarily receiving hyperinflation scaremongering in response (which always ignores limiting spending to inflation targets).


None of this Germany is likely to agree to, so we will continue on for a number of years yet without any actual recovery policies, until an anti-austerity party somewhere gains power, has their country leave the single currency, and brings along the rest of the EU with it (or until some other turn of events, forces a country out).

ads20101

Banks just about to reopen.

Measures in place to stop the run.

Anyone else worried about contagion?

View

marienbad wrote: »

But you seem to be sure the EU is at fault , how is that then ?

I believe the bondholders have been named quite a few times at this stage , I think links have even been provided from this site .

Well, no, the bond holders haven't been named since they by and large can't be.

You could have a Greek bond being held in an account by a broker in Nicosia who holds them for an investment fund in London which is (collectively) investing part of the monies invested in them by a person in Dublin.

Who exactly in that case is "the bond holder"? The person in Dublin who ultimately receives the monies from the bond payments? The broker holding the bond in Nicosia? The intermediaries who will deduct fees from the monies as they "travel" en route to the person in Dublin?

And remember bonds are bought and sold constantly - the bond holder of today is probably not the bond holder of a year or two ago.

marienbad

View wrote: »

Well, no, the bond holders haven't been named since they by and large can't be.

You could have a Greek bond being held in an account by a broker in Nicosia who holds them for an investment fund in London which is (collectively) investing part of the monies invested in them by a person in Dublin.

Who exactly in that case is "the bond holder"? The person in Dublin who ultimately receives the monies from the bond payments? The broker holding the bond in Nicosia? The intermediaries who will deduct fees from the monies as they "travel" en route to the person in Dublin?

And remember bonds are bought and sold constantly - the bond holder of today is probably not the bond holder of a year or two ago.

I am referring to the Irish bondholders

Glengormanjay

Nate--IRL-- wrote: »

What are you talking about? There is no money to take. Its gone.

Nate

Not sure this is all actually about the lucre! It’s more about wealth shift and balance than notes and cents.

Cyprus has - tourism - new potatoes & olives but more importantly is got a large banking sector (that directly competes with central EU) and huge potential around NATURAL GAS.

It will be very interesting to see the extent and competitive viability of the banking sector in 10 years time! I doubt that by the time this crisis settles that the Cypriot people will have any potential to see any actual value or benefit come out of their gas deposits.

Big picture and posterirty will reveal for more than the daily battle of detail!

G Power

ads20101 wrote: »

Banks just about to reopen.

Measures in place to stop the run.

Anyone else worried about contagion?

ah no sure the keyboard warriors and sheep say it all going to be ok so why worry at all then like :pac::pac::pac:

View

marienbad wrote: »

I am referring to the Irish bondholders

So am I since in a similar fashion to the example I gave there is absolutely no reason why a person in Dublin couldn't be a "bond holder" of Irish bonds.

For instance, using the above example, the Investment Fund in London could equally well have a broker in Dublin holding Irish government bonds for them bought partially using the monies invested by the person in Dublin (either directly as an individual or more likely via their company pension fund).

Equally, well that London-based Investment Fund could either directly or via a broker hold bonds issued by any or all of the IMF or ESM or EFSF or EFSM - all "safe" AAA bonds if I recall correctly - the monies of which could be loaned to the Irish government who are using that money to pay for schools and hospitals just down the road from that person in Dublin.

"Burn Seán's life savings" isn't quite as catchy a slogan to chant as "Burn the bond holders", is it?

antoobrien

ads20101 wrote: »

Measures in place to stop the run.

Anyone else worried about contagion?

Some of the measures reportedly in place:

1. €300 daily withdrawal limit
2. No limit on credit card transactions
3. No private wiring of money between banks/abroad
4. Electronic bill payments & transfers between accounts within the bank allowed
5. Standing order bill payments will be processed normally
6. Electronic transfers for commercial activities up to €,5000 - internal or international
7. Approval process for transactions between €5,000 - €200,000
8. Payments of salaries in unlimited amounts - except where it involves transfers to other banks (bit harsh that, I'd be peeved if that stopped me getting paid)
9. Students abroad can withdraw €3,000 every three months

Glengormanjay

nowanathiest wrote: »

All banks are public companies with shareholders. Don't be sidetracked by private/nationalised tags. A nationalised bank is a failed business that is being artifically supported by the government until it is able to fund itself independently.

Nowanathiest, I agree 100% with all you have said, but as a diehard capitalist I will make slight adjustment to your comment above. I see private banks standing behind the skirts of Government and drawing on the good and wealth of society until the point where they can change colour again in order to maximise profit on money flow. If we now own the banks and if it really is our money then why don't we stop this facade and make the system work (in part atleast) for people and society.

There isn't enough cash in the world to cover it all, so we will have to keep playing musical chairs until someone is left standing. This week it was the Cypriots.

I couldn't agree more! This is very much more a game of politics and power/wealth shift than it is a crisis solution! There is no doubt in my mind that a significant percentage of this debt is virtual or put simpler is nonexistent relevant to the real wealth of the natural world and society.

marienbad

View wrote: »

So am I since in a similar fashion to the example I gave there is absolutely no reason why a person in Dublin couldn't be a "bond holder" of Irish bonds.

For instance, using the above example, the Investment Fund in London could equally well have a broker in Dublin holding Irish government bonds for them bought partially using the monies invested by the person in Dublin (either directly as an individual or more likely via their company pension fund).

Equally, well that London-based Investment Fund could either directly or via a broker hold bonds issued by any or all of the IMF or ESM or EFSF or EFSM - all "safe" AAA bonds if I recall correctly - the monies of which could be loaned to the Irish government who are using that money to pay for schools and hospitals just down the road from that person in Dublin.

"Burn Seán's life savings" isn't quite as catchy a slogan to chant as "Burn the bond holders", is it?

Yeah I know all that, I am just answering Clairefontaine assertion that the bondholders ar'nt known . They are known isofar as the information that is available is all that can really be made available and still maintain a confidential banking system. And yes '' burn the bondholders'' is just too catchy a phrase to let go.

View

marienbad wrote: »

Yeah I know all that, I am just answering Clairefontaine assertion that the bondholders ar'nt known . They are known isofar as the information that is available is all that can really be made available and still maintain a confidential banking system. And yes '' burn the bondholders'' is just too catchy a phrase to let go.

You can be fairly sure that neither the government here nor "the person in Dublin" knows whether "the person in Dublin" is a bond holder. There are just too many potential intermediaries in the chain to accurately know this and with constant buying and selling the information changes at any given moment.

Indeed, "the person in Dublin" could well be entirely in favour of the "Burn the bond holder" idea little dreaming that they favour burning their own savings...

antoobrien

View wrote: »

Indeed, "the person in Dublin" could well be entirely in favour of the "Burn the bond holder" idea little dreaming that they favour burning their own savings...

I wonder how many credit union members were in this boat when calling for Anglo & IBRC to be burned, only to find out later that they were calling for their money to be confiscated.

G Power

antoobrien wrote: »

I wonder how many credit union members were in this boat when calling for Anglo & IBRC to be burned, only to find out later that they were calling for their money to be confiscated.

I wonder why the government here shut down the extremely popular post bank when it did

antoobrien

G Power wrote: »

I wonder why the government here shut down the extremely popular post bank when it did

IIRC that was the one that was backed by Fortis and later BNP. Perhaps you should ask why BNP decided to pull out?

KyussBishop

Good opinion piece on the state and probable course of things with the EU:
http://www.theautomaticearth.com/Finance/the-lesson-from-cyprus-europe-is-politically-bankrupt.html

Scofflaw

KyussBishop wrote: »

Good opinion piece on the state and probable course of things with the EU:
http://www.theautomaticearth.com/Finance/the-lesson-from-cyprus-europe-is-politically-bankrupt.html

Not really - in fact, it's complete rubbish based on misunderstanding some things and being wrong about others. It's largely a repetition of common myths and popular prejudices.

For example, almost immediately:

It seems to escape everbody, but that doesn't make it any less true: people from Portugal to Spain to Italy to Greece to Cyprus and Ireland are worse off today than they were when they first adopted the euro.

This is completely untrue - in fact, Greece's GDP is still more than twice what it was when they joined the euro, as is ours, and Portugal's, and Spain's. It would have taken the writer about 2-3 minutes to check that what he was saying was actually true, and he either didn't bother, or decided to say it anyway.

On to paragraph 2:

Until Cyprus, the EU had always maintained two prime objectives (and spent €5 trillion over 5 years to prove it): keeping all members in the eurozone, and guaranteeing all bank deposits under €100,000. These objectives exist from now on only in words. Brussels has threatened to both grab deposits of small savers and throw Cyprus out of the monetary union. Two watershed moments in one.

Sorry - the EU has spent €5tn? Where does that figure come from - who spent it, and on what? The bailouts amount to nothing like that sum - ECB LTRO might do, but that's not spending. It certainly hasn't been spent "guaranteeing all bank deposits under €100,000" - on the contrary, virtually no such guarantees have been activated - and appears to be completely made up.

Paragraph 4 (para 3 is too nebulous to bother with):

The EU's financial scorched earth strategies have left its Mediterranean members with highly elevated unemployment rates, fast rising taxation levels, huge cuts to pensions, benefits and services and above all insanely high debt levels, personal, corporate and sovereign. And now, as ironic as it is cynical, their savings. The only thing that keeps the nations from going bankrupt is more debt, largely in the form of ECB loans.

Er, no, it's not "the EU's financial scorched earth strategies" that has left these countries with massive debts or collapsed economies - it's a recession. And the ECB doesn't lend to sovereigns.

And on, and on. Dreadful stuff, involving no facts and much make-believe.

cordially,
Scofflaw

KyussBishop

Scofflaw wrote: »

It seems to escape everbody, but that doesn't make it any less true: people from Portugal to Spain to Italy to Greece to Cyprus and Ireland are worse off today than they were when they first adopted the euro.

This is completely untrue - in fact, Greece's GDP is still more than twice what it was when they joined the euro, as is ours, and Portugal's, and Spain's. It would have taken the writer about 2-3 minutes to check that what he was saying was actually true, and he either didn't bother, or decided to say it anyway.

Except GDP is an entirely one-dimensional analysis of these countries; we have significantly high unemployment, damaged and worsening public services, and we're half a decade into a crisis we have no control over due to the Euro.

Scofflaw wrote: »

Until Cyprus, the EU had always maintained two prime objectives (and spent €5 trillion over 5 years to prove it): keeping all members in the eurozone, and guaranteeing all bank deposits under €100,000. These objectives exist from now on only in words. Brussels has threatened to both grab deposits of small savers and throw Cyprus out of the monetary union. Two watershed moments in one.

Sorry - the EU has spent €5tn? Where does that figure come from - who spent it, and on what? The bailouts amount to nothing like that sum - ECB LTRO might do, but that's not spending. It certainly hasn't been spent "guaranteeing all bank deposits under €100,000" - on the contrary, virtually no such guarantees have been activated - and appears to be completely made up.

It should specify what it's referring to, as that certainly isn't clear, but it isn't limiting applicability to depositor insurance, it is referencing anything which is "keeping all members in the eurozone", which can cover just about every action taken to cope with the crisis; I don't adopt the 5 trillion figure mind, since it is not sourced.

Scofflaw wrote: »

The EU's financial scorched earth strategies have left its Mediterranean members with highly elevated unemployment rates, fast rising taxation levels, huge cuts to pensions, benefits and services and above all insanely high debt levels, personal, corporate and sovereign. And now, as ironic as it is cynical, their savings. The only thing that keeps the nations from going bankrupt is more debt, largely in the form of ECB loans.

Er, no, it's not "the EU's financial scorched earth strategies" that has left these countries with massive debts or collapsed economies - it's a recession. And the ECB doesn't lend to sovereigns.

Eh, yes the EU has forced austerity onto these countries, just like they have us (exacerbating debts and economic collapse); that is not a blind inevitability which comes from economic trouble, and it also holds countries in recession longer.

It is absolutely true that the EU (collectively) has forced this upon countries, and that this (coupled with the lack of any long-lasting proper recovery policies at an EU level) that has contributed to collapsing EU economies.

Unless the author meant ECB loans to banks (unlikely), he probably meant the EFSF and other EU funds used to provide loans to countries.


There are parts of the article that are right to criticize, but the core of the article pretty much stands there, with only a handful of ancillary things being an issue.

Scofflaw

Kyuss wrote:

There are parts of the article that are right to criticize, but the core of the article pretty much stands there, with only a handful of ancillary things being an issue.

Unfortunately, those "ancillary things" are the incorrect facts on which he builds his 'analysis'. Most are straightforwardly and simply incorrect, others are lazy over-simplifications, but the tower is very much founded on quicksand.

cordially,
Scofflaw

Glengormanjay

KyussBishop wrote: »

Except GDP is an entirely one-dimensional analysis of these countries; we have significantly high unemployment, damaged and worsening public services, and we're half a decade into a crisis we have no control over due to the Euro.

I couldn't agree more KyussBishop

Scofflaw walk out onto any street corner and ask your countrymen and women how well off they are?
95% have cut back in almost all parts of their lives (evidence is in our internal economy)
20% are in a losing battle relevant to basics like food, rent and fuel
98% see a diminishing future
And a very significant swathe of our society across all classes have huge negative equity mortgages/debt that is like a time bomb around their necks - wait until things do improve then the crisis will really start.
I also spent the first 18 months trying to justify the system and defending the old guard. To some extent you must agree that - this system is broke and that the rules of "harvest" need to change!

In the eighties we could subsist, a person can manage with small income and high income tax understanding that it proportional. But then start creating charges and taxes on living in a house, drinking water, access to sewerage system etc etc then hang a huge mill stone of debt around everyone’s neck and - SNAP!!!!
Our level of debt which was “pumped up” and systematically issued, taken in the context of a diminished future (austerity and debt call in) results in an enslaved nation.

Now take all of that in the context of an economy that is managed in order to manipulate and preserve excessively low levels of inflation then we truly are in a lose-lose situation.

KyussBishop

Scofflaw wrote:

Unfortunately, those "ancillary things" are the incorrect facts on which he builds his 'analysis'. Most are straightforwardly and simply incorrect, others are lazy over-simplifications, but the tower is very much founded on quicksand.

Not really, as while you're right to criticize the points presented without apparant fact-checking, they are ancillary to the core points of the article, which:
- Lambasts the EU and the Euro, for causing extreme damage to countries, and for the worsening mishandling of the crisis, including blind punitive action against countries
- The EU's many failures in oversight (both collective and within the EU institutions themselves) since the run-up to and inception of the Euro
- The general lack of accountability (with blame always falling on individual countries, rather than shared due to collective failures)
- How the EU power structure gives Germany's leading politicians pretty disproportionate power over the rest of the EU, which is being exercised pretty arrogantly and incompetently, giving the impression they are not concerned of the consequences for other countries, and giving the impression of bullying smaller countries, while in the same breath wanting to keep the EU locked together in 'solidarity'
- The lack of trust all of this fosters, and how it gives a very poor impression of democratic accountability within the EU
- That this has gotten to such a bad point, that (in the face of rising taxes/costs and loss of jobs/income) people can not even be entirely sure of the security of their savings anymore

So that's a pretty wide summary of the range of criticisms in the article (of which the above only touches on some), which don't depend upon the poorly fact-checked parts that stand out (which do let the article down), and it finishes with pointing out that this is not a sustainable way for the EU to continue, and that a breakup of the single currency is probably inevitable due to this.

nowanathiest

Glengormanjay wrote: »

KyussBishop wrote: »

Except GDP is an entirely one-dimensional analysis of these countries; we have significantly high unemployment, damaged and worsening public services, and we're half a decade into a crisis we have no control over due to the Euro.

I couldn't agree more KyussBishop

Scofflaw walk out onto any street corner and ask your countrymen and women how well off they are?
95% have cut back in almost all parts of their lives (evidence is in our internal economy)
20% are in a losing battle relevant to basics like food, rent and fuel
98% see a diminishing future
And a very significant swathe of our society across all classes have huge negative equity mortgages/debt that is like a time bomb around their necks - wait until things do improve then the crisis will really start.
I also spent the first 18 months trying to justify the system and defending the old guard. To some extent you must agree that - this system is broke and that the rules of "harvest" need to change!

In the eighties we could subsist, a person can manage with small income and high income tax understanding that it proportional. But then start creating charges and taxes on living in a house, drinking water, access to sewerage system etc etc then hang a huge mill stone of debt around everyone’s neck and - SNAP!!!!
Our level of debt which was “pumped up” and systematically issued, taken in the context of a diminished future (austerity and debt call in) results in an enslaved nation.

Now take all of that in the context of an economy that is managed in order to manipulate and preserve excessively low levels of inflation then we truly are in a lose-lose situation.

Whilst agreeing with most of your post, I would like to question a few things with regard to some taxes now being imposed in Ireland. Why do the Irish expect to receive services for nothing?...........i.e. water, sewerage, refuse collection. Citizens in other countries pay for all of these services, e.g UK Council Tax, US Property Taxes. Rates on homes were payable in Ireland until the 1970's until one Government abolished them. How do you expect to receive services for free?

clairefontaine

nowanathiest wrote: »

Glengormanjay wrote: »

Whilst agreeing with most of your post, I would like to question a few things with regard to some taxes now being imposed in Ireland. Why do the Irish expect to receive services for nothing?...........i.e. water, sewerage, refuse collection. Citizens in other countries pay for all of these services, e.g UK Council Tax, US Property Taxes. Rates on homes were payable in Ireland until the 1970's until one Government abolished them. How do you expect to receive services for free?

People in rural Ireland are on private water schemes and deal with their own sewage through the septic tanks. So they pay that themselves and then have to now pay tax ontop of it too.

Much like at the pump, you are paying motor tax and then also have to pay motor tax at the council.

A lot of double taxation going on.

In the US property taxes go to schools, parks, playgrounds, public swimming pools, etc, and you can see where your money is going.

I pay a fortune at the pump and in motor tax and Im still swerving to avoid craters in the roads on the way home.

You already have very high sales tax as well as a lot taken from the paycheck. So its double and triple whammies everywhere from the taxman.

nowanathiest

clairefontaine wrote: »

nowanathiest wrote: »

People in rural Ireland are on private water schemes and deal with their own sewage through the septic tanks. So they pay that themselves and then have to now pay tax ontop of it too.

Much like at the pump, you are paying motor tax and then also have to pay motor tax at the council.

A lot of double taxation going on.

In the US property taxes go to schools, parks, playgrounds, public swimming pools, etc, and you can see where your money is going.

I pay a fortune at the pump and in motor tax and Im still swerving to avoid craters in the roads on the way home.

You already have very high sales tax as well as a lot taken from the paycheck. So its double and triple whammies everywhere from the taxman.

with regard to persons living in rural areas, that is fair enough if they have local arrangements, but according to the last census 62% of Irish people now live in urban areas......does that mean that 62% of the population are not currently paying for these basic services and if so how is that sustainable anywhere, let alone a small country like Ireland?

clairefontaine

nowanathiest wrote: »

clairefontaine wrote: »

with regard to persons living in rural areas, that is fair enough if they have local arrangements, but according to the last census 62% of Irish people now live in urban areas......does that mean that 62% of the population are not currently paying for these basic services and if so how is that sustainable anywhere, let alone a small country like Ireland?

I really don't know.

But that leaves 40% of the country being double taxed.

Scofflaw

KyussBishop wrote: »

Not really, as while you're right to criticize the points presented without apparant fact-checking, they are ancillary to the core points of the article, which:
- Lambasts the EU and the Euro, for causing extreme damage to countries, and for the worsening mishandling of the crisis, including blind punitive action against countries
- The EU's many failures in oversight (both collective and within the EU institutions themselves) since the run-up to and inception of the Euro
- The general lack of accountability (with blame always falling on individual countries, rather than shared due to collective failures)
- How the EU power structure gives Germany's leading politicians pretty disproportionate power over the rest of the EU, which is being exercised pretty arrogantly and incompetently, giving the impression they are not concerned of the consequences for other countries, and giving the impression of bullying smaller countries, while in the same breath wanting to keep the EU locked together in 'solidarity'
- The lack of trust all of this fosters, and how it gives a very poor impression of democratic accountability within the EU
- That this has gotten to such a bad point, that (in the face of rising taxes/costs and loss of jobs/income) people can not even be entirely sure of the security of their savings anymore

So that's a pretty wide summary of the range of criticisms in the article (of which the above only touches on some), which don't depend upon the poorly fact-checked parts that stand out (which do let the article down), and it finishes with pointing out that this is not a sustainable way for the EU to continue, and that a breakup of the single currency is probably inevitable due to this.

Shrug. You're right that those parts don't rely on factual errors. Instead, those parts largely rest on misunderstanding the oversight powers the EU actually has, which were extremely limited, and mistaking the "power" Germany currently has because it is both a required part of every bailout and hostage to its own parliament for the power that Germany has in the EU.

And you happen to agree with a lot of that because you tend towards the same misunderstandings, which we've been over a few times now. Finding a blogger who shares the same misunderstandings doesn't improve either your case or theirs.

cordially,
Scofflaw

KyussBishop

Scofflaw wrote: »

Shrug. You're right that those parts don't rely on factual errors. Instead, those parts largely rest on misunderstanding the oversight powers the EU actually has, which were extremely limited, and mistaking the "power" Germany currently has because it is both a required part of every bailout and hostage to its own parliament for the power that Germany has in the EU.

And you happen to agree with a lot of that because you tend towards the same misunderstandings, which we've been over a few times now. Finding a blogger who shares the same misunderstandings doesn't improve either your case or theirs.

The lack of proper oversight powers though, is a collectively shared problem with the entire EU; the single currency should not have been put together without adequate centralized oversight, that is part of what made it so dangerous, and the EU also directly was responsible, for overseeing potential problems with the introduction of countries to the Euro.

All of that is a failure in oversight, on the part of the EU (both collectively, and in the case of overseeing member state introduction, with central EU institutions).


I don't see what there is to contest about Germany's power? They have pretty direct veto power over policy decisions within the EU, and in setting the range of options for countries needing help (meaning countries like Cyprus can be trampled on, so German politicians can save face in the run-up to an election, even if it costs the EU more overall in the long run).
Also, Germany do not have to directly as a sovereign, fund recovery policies with bailouts; there are ample opportunities for recovery policies which benefit not just the entire EU, but Germany as well, which do not require direct funding from them.


We disagree a lot on a wide range of viewpoints regarding the EU, but that doesn't make my views based upon misunderstandings; a lot of the disagreements I have, are about adding back focus to social issues, the wider inherent moral/political/economic obligations of the EU (which exist despite not being written in law), and other aspects of the crisis, which seem to get lost when focus is narrowed to individual countries instead of the whole EU, onto economic factors without regard to social factors, and onto the letter of the law when that runs roughshod over the legal/political spirit that laws are based on.

Scofflaw

KyussBishop wrote: »

The lack of proper oversight powers though, is a collectively shared problem with the entire EU; the single currency should not have been put together without adequate centralized oversight, that is part of what made it so dangerous, and the EU also directly was responsible, for overseeing potential problems with the introduction of countries to the Euro.

All of that is a failure in oversight, on the part of the EU (both collectively, and in the case of overseeing member state introduction, with central EU institutions).

Largely true, but the EU, despite being appointed referee, had neither deep investigatory powers into euro applicant books, nor the final say on who got in. And, to be fair, the only problem country on entry was Greece.

KyussBishop wrote: »

I don't see what there is to contest about Germany's power? They have pretty direct veto power over policy decisions within the EU, and in setting the range of options for countries needing help (meaning countries like Cyprus can be trampled on, so German politicians can save face in the run-up to an election, even if it costs the EU more overall in the long run).

Mm. First off, you might be surprised to learn that Germany is one of the most regularly outvoted countries on the Council - just about #3 after the UK and Austria:



Second, the German government is not what makes German assent to bailouts difficult - the problem is, instead, that their parliament exercises a proper level of control over their government in this respect, and is unwhipped. As such, bailouts have to get past the German parliament, which in turn represents the German taxpayer.

Strictly speaking, it's also worth pointing out that when the media say "Germany" in respect of these bailouts, they are usually referring to a bloc of countries, generally Germany, Holland, Finland, and Slovakia at a minimum.

KyussBishop wrote: »

Also, Germany do not have to directly as a sovereign, fund recovery policies with bailouts; there are ample opportunities for recovery policies which benefit not just the entire EU, but Germany as well, which do not require direct funding from them.

I'm afraid I'm not going to veer off into a discussion of alternative economics.

KyussBishop wrote: »

We disagree a lot on a wide range of viewpoints regarding the EU, but that doesn't make my views based upon misunderstandings; a lot of the disagreements I have, are about adding back focus to social issues, the wider inherent moral/political/economic obligations of the EU (which exist despite not being written in law), and other aspects of the crisis, which seem to get lost when focus is narrowed to individual countries instead of the whole EU, onto economic factors without regard to social factors, and onto the letter of the law when that runs roughshod over the legal/political spirit that laws are based on.

I appreciate that point, but it does lead to criticisms of actions that are based on what one feels various crisis actors should be doing, while ignoring what they're actually legally able to do - but without really noting that that's what one is doing.

It's one thing to say "the EU should have had the power to properly investigate banks, or euro applicants", it's another entirely to say that the EU should have properly investigated the banks or euro applicants when it lacked the power to do so. The former is a constructive criticism of the structure, the latter is just inaccurate finger-pointing.

cordially,
Scofflaw

hatrickpatrick

^ I think the issue isn't so much the German government Scoffy, it's that the Bundesbank seems to have undue power over ECB policy. Or are you going to claim that an objection to an ECB policy from the Bundesbank carries the same weight as an objection from the UK Treasury or the Irish central bank?

KyussBishop

Scofflaw wrote: »

Largely true, but the EU, despite being appointed referee, had neither deep investigatory powers into euro applicant books, nor the final say on who got in. And, to be fair, the only problem country on entry was Greece.

While they may not have been given the powers, there is still a responsibility (even if collective rather than within EU institutions) to properly check the suitability of countries upon entry to the single currency (with the failure to provide centralized EU power to do this, being the collectively responsible fault, as well as the lack of oversight); there is criticism on this point in the case of Cyprus also.

Scofflaw wrote: »

Mm. First off, you might be surprised to learn that Germany is one of the most regularly outvoted countries on the Council - just about #3 after the UK and Austria:

Second, the German government is not what makes German assent to bailouts difficult - the problem is, instead, that their parliament exercises a proper level of control over their government in this respect, and is unwhipped. As such, bailouts have to get past the German parliament, which in turn represents the German taxpayer.

Their power isn't that overt in the EU institutions, but being the biggest and currently most well functioning economy at this time, positioning them as the biggest creditor nation, as well as the need for unanimous consent on deciding centralized recovery policies across the EU (giving them an effective veto, such that they can block recovery policies and maintain their position as creditor); this gives them enormous political power over the rest of the EU, in being able to dictate terms wherever they are positioned as creditor.

The configuration of power within Germany is indeed further complicated by their parliament, which the leading party has to appease (along with public sentiment), but this doesn't run counter to the point of Germany's excessive power in this case.

Scofflaw wrote: »

I appreciate that point, but it does lead to criticisms of actions that are based on what one feels various crisis actors should be doing, while ignoring what they're actually legally able to do - but without really noting that that's what one is doing.

It's one thing to say "the EU should have had the power to properly investigate banks, or euro applicants", it's another entirely to say that the EU should have properly investigated the banks or euro applicants when it lacked the power to do so. The former is a constructive criticism of the structure, the latter is just inaccurate finger-pointing.

EU member states are perfectly capable of renegotiating/rewriting the laws though, and writing up proper recovery policies in law, and actions during the crisis have shown plenty of willingness to work around laws, without regard for their original political purpose and legal spirit; this is a vital part of the bigger picture too, and viewing countries or the EU's actions, only within the limits of the law (which is changeable), misses out on the important wider moral/political obligations/responsibilities.

In the case of proper regulation of banks and Euro applicants, it is not the EU institutions that are at fault (due to not having the right legal powers) but the EU member states collectively, with responsibility shared (which is not inaccurate finger pointing); this is exactly the kind of vitally important political/moral context that gets lost, when you focus solely on legalities.


I think that (a narrow focus on legalities alone, especially using it to judge political actions, without noting that politics decides the law) is the most frequent area of disagreement here; analysis which ignores the wider political/moral context (these are the 'should's, and thus are extremely important), and the nuances of that, is very incomplete.

KyussBishop

hatrickpatrick wrote: »

^ I think the issue isn't so much the German government Scoffy, it's that the Bundesbank seems to have undue power over ECB policy. Or are you going to claim that an objection to an ECB policy from the Bundesbank carries the same weight as an objection from the UK Treasury or the Irish central bank?

Ya that's largely it, as I'm talking a lot about Germany's economic power, and how that affects their political power; I just speak of Germany's power in general terms above, as I don't know enough about Germany internally, to see how much the Bundesbank has control vs German government/parliament.

Scofflaw

hatrickpatrick wrote: »

^ I think the issue isn't so much the German government Scoffy, it's that the Bundesbank seems to have undue power over ECB policy. Or are you going to claim that an objection to an ECB policy from the Bundesbank carries the same weight as an objection from the UK Treasury or the Irish central bank?

I wouldn't expect the UK Treasury to carry much weight, certainly, but I think Bundesbank influence on the ECB is far from paramount. We hear way too much of the Bundesbank complaining about ECB policy for that to be the case.

cordially,
Scofflaw

Scofflaw

KyussBishop wrote: »

While they may not have been given the powers, there is still a responsibility (even if collective rather than within EU institutions) to properly check the suitability of countries upon entry to the single currency (with the failure to provide centralized EU power to do this, being the collectively responsible fault, as well as the lack of oversight); there is criticism on this point in the case of Cyprus also.

Collectively, I'd agree, but it does seem a little too much to blame the institutional EU for things it hadn't the power to do.

And in respect of Cyprus, there wasn't anything wrong with it at entry. It was after entry that Cyprus picked up the large exposure to Greek sovereign debt that made such a hole in its banks.

KyussBishop wrote: »

Their power isn't that overt in the EU institutions, but being the biggest and currently most well functioning economy at this time, positioning them as the biggest creditor nation, as well as the need for unanimous consent on deciding centralized recovery policies across the EU (giving them an effective veto, such that they can block recovery policies and maintain their position as creditor); this gives them enormous political power over the rest of the EU, in being able to dictate terms wherever they are positioned as creditor.

Well, yes - it turns out you need German permission to dip into the German taxpayer's pockets.

KyussBishop wrote: »

The configuration of power within Germany is indeed further complicated by their parliament, which the leading party has to appease (along with public sentiment), but this doesn't run counter to the point of Germany's excessive power in this case.

it does, but somewhat subtly. It means that the German government is prevented from actively using its power, because what it decides or promises can be countermanded by the parliament. Since the current German power is reactive rather than active anyway, it effectively makes the German power a weight rather than a driver.

KyussBishop wrote: »

EU member states are perfectly capable of renegotiating/rewriting the laws though, and writing up proper recovery policies in law, and actions during the crisis have shown plenty of willingness to work around laws, without regard for their original political purpose and legal spirit; this is a vital part of the bigger picture too, and viewing countries or the EU's actions, only within the limits of the law (which is changeable), misses out on the important wider moral/political obligations/responsibilities.

Legal abilities are important when assigning responsibility, and since that's what the article seems first and foremost to do, the legal aspect is important.

KyussBishop wrote: »

In the case of proper regulation of banks and Euro applicants, it is not the EU institutions that are at fault (due to not having the right legal powers) but the EU member states collectively, with responsibility shared (which is not inaccurate finger pointing); this is exactly the kind of vitally important political/moral context that gets lost, when you focus solely on legalities.

Unfortunately it also gets lost when people refer to "the EU" without being clear about what the term means in their specific usage.

KyussBishop wrote: »

I think that (a narrow focus on legalities alone, especially using it to judge political actions, without noting that politics decides the law) is the most frequent area of disagreement here; analysis which ignores the wider political/moral context (these are the 'should's, and thus are extremely important), and the nuances of that, is very incomplete.

True, but, again, people regularly mix up "should have done" in the sense of "ought to have been able to" with "failed to exercise a power they had". In both cases the person is saying that the natural home for that responsibility is in a particular place, but past that the two senses are quite different.

cordially,
Scofflaw

KyussBishop

Scofflaw wrote: »

Collectively, I'd agree, but it does seem a little too much to blame the institutional EU for things it hadn't the power to do.

When I say the EU, most of the time it can be interchanged between speaking collectively of all member states, and the EU as an institution itself; if responsibility is shared collectively by all member states (particularly for the failure to give EU institutions the necessary powers), it's not all that much different (particularly for the discussions I use that with), especially as member states are responsible for setting the institutional EU's role.

Scofflaw wrote: »

And in respect of Cyprus, there wasn't anything wrong with it at entry. It was after entry that Cyprus picked up the large exposure to Greek sovereign debt that made such a hole in its banks.

At entry to the single currency there were big issues with the size of their banking sector relative to GDP, as Wibbs pointed out:
http://i50.tinypic.com/n6yivd.gif

Scofflaw wrote: »

Well, yes - it turns out you need German permission to dip into the German taxpayer's pockets.

You don't need the German government to provide the money, it could easily be implemented with centralized bonds which are sold on the market (and more controversial options involving money creation), but Germany contributes in blocking solutions like this, which keeps them in the role as the biggest EU creditor, exerting significant power over other countries.

So that reinforces my point about the power they have at the moment, driven by economic conditions (giving them significant political power in the process).

Scofflaw wrote: »

it does, but somewhat subtly. It means that the German government is prevented from actively using its power, because what it decides or promises can be countermanded by the parliament. Since the current German power is reactive rather than active anyway, it effectively makes the German power a weight rather than a driver.

It really just sets the tone for the use of German power; they are exerting quite enormous political power in the EU, and it's all weighted towards enforcing austerity, crippling debtor nations, and thus far (what looks like) protecting their role as creditor (all of which seem favourable to the German parliament).

Scofflaw wrote: »

Legal abilities are important when assigning responsibility, and since that's what the article seems first and foremost to do, the legal aspect is important.

Yes but with politics, where politics decides the law, focusing only on legalities (as important as they are) is very narrow; omitting wider political and moral obligations/responsibilities, is a very bad way of placing responsibility.

It's perfectly valid (essential even), since the law is decided by the member states, to assign responsibility first and foremost, based on morals and political responsibilities.

If the EU member states collectively put in place bad or inadequate laws, their responsibility should not be judged within the limitations of those laws, but on their collective moral and political culpability, for putting in place such inadequate laws, and for not rectifying them.

Scofflaw wrote: »

Unfortunately it also gets lost when people refer to "the EU" without being clear about what the term means in their specific usage.

Well, fair enough on me not being clear there; with the member states being responsible for setting the roles of the EU institutions, and while those institutions are not responsible for collective member state failures, it still makes sense to consider them interchangeable.

It's not that important a distinction (particularly for this discussion), because judging responsibilities based on the EU institutions alone, would inherently be quite narrow itself (allowing only a focus on legalities, not the wider political/moral context member states work in).

Scofflaw wrote: »

True, but, again, people regularly mix up "should have done" in the sense of "ought to have been able to" with "failed to exercise a power they had". In both cases the person is saying that the natural home for that responsibility is in a particular place, but past that the two senses are quite different.

I think they should be held responsible for their past failures, and that this should be accounted for today and also rectified today; this goes all the way back, to the fact that the EU should have had recovery policies in place from the beginning (and every day that member states fail to rectify this, is a continued failure they aught to be held responsible for).

The EU (as in member states collectively) had and do have the power/capability of rectifying all these problems, and always had all through the run-up to the crisis and up to now.

nowanathiest

"Under an arrangement expected to be announced on Saturday, depositors in Bank of Cyprus will receive shares in the lender worth 37.5pc of any savings over €100,000, while the rest may never be paid back, according to Reuters, citing a source with direct knowledge of the terms.

Of the 62.5pc of uninsured deposits not converted to bank shares, about 40pc will continue to accrue interest but will not be repaid unless the bank does well, while the final 22.5pc will cease to attract interest, the source told Reuters.

Government figures, including finance minister Michalis Sarris and central bank governor Panicos Demetriades, had previously indicated that depositors in the island's largest lender would lose around 40pc of their uninsured savings as part of an 11th hour agreement reached in Brussels in the early hours of Monday.

Meanwhile, account holders in Laiki Bank, the country's second largest, stand to lose up to 80pc of their money as the lender is wound down and insured deposits transferred to Bank of Cyprus.

The harsher-than-expected terms on the Bank of Cyprus' largest depositors will provoke further anger among Cypriots, who face sharp economic decline with the contraction of their dominant banking sector."

Source UK Telegraph/NY Times/Reuters...........it's all over the international press today...........As predicted, the Cypriot Authorities have only been managing or spinning the extent of the depositors haircut and the real extent of it is being revealed little by little as the days go on............

nowanathiest

Forgot to say........no coincidence that all of this is being drip fed to the public over a long bank holiday weekend when most of Europe is on holiday and now tuning into news maybe until Monday or Tuesday. The following appears in The Irish Times today............note the terminology EUROPEAN LIQUIDATION POLICY..............and if that doesn't send a chill down your spines, I don't know what will:

"European leaders have insisted the raid on big bank deposits in Cyprus is a one-off in their handling of a debt crisis that refuses to be contained.

But policymakers are divided, and the waters were muddied a day after the deal was inked when the Dutch chair of the euro zone’s finance ministers, Jeroen Dijsselbloem, said it could serve as a model for future crises.

Market backlash

Faced with a market backlash, Mr Dijsselbloem rowed back. But yesterday, European Central Bank Governing Council member Klaas Knot, a fellow Dutchman, said there was “little wrong” with his assessment.

“The content of his remarks comes down to an approach which has been on the table for a longer time in Europe,” Mr Knot was quoted as saying by Dutch daily Het Financieele Dagblad . “This approach will be part of the European liquidation policy,” he said, in comments a spokesman said were accurately reported."

clairefontaine

I find it hard to believe teh EU does not bear some responsibility here. They have a regulation for everything, even how much a postman can carry in his postbag yet they allowed this to happen.

aloyisious

clairefontaine wrote: »

I find it hard to believe teh EU does not bear some responsibility here. They have a regulation for everything, even how much a postman can carry in his postbag yet they allowed this to happen.

Money talk's, big money carries mucho clout.