Bollitics - Ireland, the Euro and the future of the EU

[snowychap]

You will see the 7bln again.

Is there zero chance of us not getting it back?

[peterms]

But as you'll see none of those problems you have pointed out in the banks history bar the American rogue trader have anything to do with Capital Markets Division.

The rogue trader is an interesting one. It seems there was little management oversight and internal audit was ineffective, with the trader being dealt with on the basis that his employers should trust him. This was several years after Nick Leeson, when you'd think banks would have learned lessons and put proper management systems in place.

I gather Societe Generale have been hit more recently with another one.

[CVByrne]

But as you'll see none of those problems you have pointed out in the banks history bar the American rogue trader have anything to do with Capital Markets Division.

The rogue trader is an interesting one. It seems there was little management oversight and internal audit was ineffective, with the trader being dealt with on the basis that his employers should trust him. This was several years after Nick Leeson, when you'd think banks would have learned lessons and put proper management systems in place.

I gather Societe Generale have been hit more recently with another one.

Well the problem with the trader was he worked in a small subsidiary in New York. They managed their own risk, which changed in the afermath with risk centralised in Dublin. Then there was a huge failure on the part of Bank of America who let him, a trader, settle his own tickets. Hence AIB suing BOA for damages relating to the trading loss. How they let a trader settle his own trade tickets is a baffling. That was a serious serious failure on their part.

[CVByrne]

You will see the 7bln again.

Is there zero chance of us not getting it back?

Nope, but it's highly likely you will see every bit of it back and it will cost you nothing. The 7bln will be the least of your worries if we default as that would mean a wide scale European default by Greece and Portugal too and a very large recession.

[snowychap]

The 7bln will be the least of your worries if we default as that would mean a wide scale European default by Greece and Portugal too and a very large recession.

It may mean that, it may not.

Meanwhile that (widescale european default) may well still happen, indeed Portugal are quite possibly screwed whatever happens in the rest of the world.

[CVByrne]

Possibly, but given how big of a trading partner Ireland is with the UK it was more in your interest to help us out than it is most other European countries.

[peterms]

Anyway, discussion about my countries woes with Socialists from England isn't going to do much good, nor be in anyway insightful. I'd rather discuss it with the people effected, the people from my own country but it seems we are all in agreement on here. The thread seems driven by non Irish.

It was started by a Englishman who is definitely not a socialist and it is intended to address a far wider issue than your country alone. Besides we are affected, to the tune of 7 billion pounds that we'll never see again. That's the same as all welfare cuts over here combined. I'd say that at least entitles us non-Irish folk to an opinion.

It's funny how that £7 billion figure keeps coming up, isn't it?

Bankers' pay packets are continuing to recover to pre-credit crunch levels. A study by the Centre for Economics and Business Research (CEBR) - which took into account all City workers including fund managers and staff working with equities and bonds - forecast the total bonus pot to hit £7 billion this year alone.

[snowychap]

Possibly, but given how big of a trading partner Ireland is with the UK it was more in your interest to help us out than it is most other European countries.

Of course, self interest is/was a big part of their decision making process.

Do you mean more in our interest to help Ireland out than for other countries to help Ireland out or more in our interest to help Ireland out than for us to help out other countries?

[Meath_Villan]

Yowzzaaaa 5.8%

Were **** even at that

[Awol]

Do you mean more in our interest to help Ireland out than for other countries to help Ireland out or more in our interest to help Ireland out than for us to help out other countries?

Without speaking for CV it's clear why helping Ireland can be interpreted as in our direct national interest, although part of me thinks we are:

a) Helping to condemn Ireland to EU servitude.

Throwing good money (we haven't got) after bad in a futile attempt to stop the rot in the eurozone.

As I've already said I think withdrawal from the Euro and default is Ireland's best option, despite the consequences for the banking system generally.

Despite the bilateral trade links between the Republic and the UK, bailing out Ireland is still more important from the Eurozone perspective than ours. For them it's existential. When it comes to Portugal, Spain, Italy et al we shouldn't be putting a bean in because it simply can't work. That is also the strongest common sense arguent for not giving 7 billion to Ireland now, but clearly our politicos are planning to go down with the ship.

PS - 5.8%? I've read that anything over 2% was going to be unsustainable. Isn't it also 0.6% higher than the Greek loan?

[Meath_Villan]

News just in......... Vaseline has a major shipment en route to Ireland paid for by the E.U so every tax payer can now bend over and get it again and again and again

[Corcaigh]

Here we go then, a decade of stagnation.

[snowychap]

Do you mean more in our interest to help Ireland out than for other countries to help Ireland out or more in our interest to help Ireland out than for us to help out other countries?

Without speaking for CV it's clear why helping Ireland can be interpreted as in our direct national interest

I get why it is being justified in those terms; what I was getting at was whether he thought that the same justification couldn't be used for us assisting with other european countries or for other european countries assisting with Ireland.

If one accepts the justification with regard to Ireland (for the UK) then I think it's difficult not to accept it in terms of the rest of europe (for the UK).

Of course, as you say, that justification doesn't mean it was the right thing to do (or would be the right thing to do in future) as that will depend on whether it works (at all or partly) and the risks of default.

Isn't it also 0.6% higher than the Greek loan?

I believe so.

Auntie"]

the Irish Republic itself will contribute 17.5bn euros to the overall fund.

:?

[snowychap]

Here we go then, a decade of stagnation.

Things are looking up, then?

[CVByrne]

Possibly, but given how big of a trading partner Ireland is with the UK it was more in your interest to help us out than it is most other European countries.

Of course, self interest is/was a big part of their decision making process.

Do you mean more in our interest to help Ireland out than for other countries to help Ireland out or more in our interest to help Ireland out than for us to help out other countries?

It was more in your interest to help Ireland out than it is for other countries to help us out.

[CVByrne]

Do you mean more in our interest to help Ireland out than for other countries to help Ireland out or more in our interest to help Ireland out than for us to help out other countries?

Without speaking for CV it's clear why helping Ireland can be interpreted as in our direct national interest, although part of me thinks we are:

a) Helping to condemn Ireland to EU servitude.

Throwing good money (we haven't got) after bad in a futile attempt to stop the rot in the eurozone.

As I've already said I think withdrawal from the Euro and default is Ireland's best option, despite the consequences for the banking system generally.

Despite the bilateral trade links between the Republic and the UK, bailing out Ireland is still more important from the Eurozone perspective than ours. For them it's existential. When it comes to Portugal, Spain, Italy et al we shouldn't be putting a bean in because it simply can't work. That is also the strongest common sense arguent for not giving 7 billion to Ireland now, but clearly our politicos are planning to go down with the ship.

PS - 5.8%? I've read that anything over 2% was going to be unsustainable. Isn't it also 0.6% higher than the Greek loan?

Withdrawing from the Euro and defaulting would be the end for Ireland. We have so many multinationals here on the basis that we are in the Eurozone and have 12.5% corporate tax. Change either of those ever and we damage our no1 selling point permanently.

[CVByrne]

Also the 17.5bln we contribute ourselves comes from the National Pension Reserve Fund. A Fund which should have been liqudated ages ago. Now it is going to lend money to the state?? A state owned fund for future state pensions is to lend the state money??

[CVByrne]

Here we go then, a decade of stagnation.

Still wont be even close to as bad as the 80's and early 90's were. We've lived through far far worse.

[peterms]

So, let me see if I've understood this.

Ireland will get €85bn loans. The loans are to be repaid, and attract interest at 5.8%. That means that what the country does with the money must not only retain the value of the loan, but also generate a level of profit sufficient to repay the interest. A rate of return larger than what most private companies would regard as a good return. At a time when the economy is shrinking. Because the cuts made in public spending will both directly and indirectly reduce GDP. And national income equals national spending, as an accounting identity.

And of the money that's being borrowed, €10bn will go straight into the banks, including €3bn of UK money going straight to the banks. But this will never again see the light of day, because the banks have repeatedly lied about their assets, and in fact what they "own" is a trifling proportion of the debts they have. So this money, real money, will partially offset the massive debts they have. They need real assets to make up the gaping hole that their lies and subterfuge have created in their own balance sheets. And the rationale for doing this is that it will "restore confidence", though it doesn't even match the €13bn outflows from AIB alone this year, as depositors take their cash and head for the door; and this in spite of the established fact that previous injections of far larger sums have signally failed to restore "confidence".

But this is now a new debt which the Irish people owe. The money has already gone, written off against balance sheets which have more holes than a Swiss cheese. But public spending will be cut, people thrown out of work, to pay in real terms for this paper adjustment that doesn't remotely cut out the cancer or stem the flow. Meanwhile, the economy is having the legs cut from under it, but will have to grow at unfeasible rates to repay the debt which the public have taken on (they didn't choose to) in order to partly bail out the bankers. Though in fact the economy is being shrunk, not expanded, because of the cuts.

It would have been more useful to load the cash into a rocket and send it into outer space. It would have about the same effect on the economy, but would at least have provided 15 seconds of entertainment.

[snowychap]

It would have been more useful to load the cash into a rocket and send it into outer space. It would have about the same effect on the economy, but would at least have provided 15 seconds of entertainment.

Or, to nick (and change slightly) a suggestion from Frankie Boyle, they could have written, "**** off, England" on the moon.