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

[Awol]

I just find it hard to believe they will end up scrapping the Euro, to do so would be admitting the EU has failed.

Precisely so, which is why it will end in tears instead of doing the sensible thing now. If the leaders of the eurozone periphery want to avoid saddling their yet unborn generations with huge and immoral debts, then they should pull out, default and revalue using their old currencies at a level that will allow them to recover. That would mean huge losses to UK, German and French banks hence the bailout fund and EU pressure to take it - see Ireland.

Trouble is economic reality will always trump political ambition (maintaining monetary and transitioning to political union) so eventually they will have three choices:

1) Print trillions of euros to cover the (soon to be) defaulters debt - see Portugal, Spain, Italy, Greece - and devalue the currency to Zimbabwe-esque levels.

2) Germany becomes the benefactor for the whole of southern Europe (no chance)

3) Dismantle the eurozone (after spending hundreds of billions to support an unworkable idea).

Drat can call me anything he likes but if the above is wrong I'd like to hear the rationale as to why.

[Risso]

The fore runner to the EURO, the ERM would allow national govts some flexibility to manage their exchange rate within a band - though as mr lamont found out that doesn't work perfectly either.

It was the German central bank that knackered that. It was legally obliged to consider the German economy first and foremost, so refused to act to help thing in the rest of Europe. Hence you had countries like Sweden with absolutely mentally high overnight rates of interest as they tried to shore up the Krona.

[peterms]

Right, I'm not up to speed with the financial stuff like some in this thread so excuse me what to some may seem a daft question.

The government is currently undertaking huge cuts in public spending which will despite their claims have an impact on public services, these cuts are being made because we are told their is no money left and their is no alternative.

Now, as Ireland gets into trouble we suddenly can manage to find £7b from somewhere, where was it? In Gideon's sock draw?

I totally understand the logic of why we are lending the money and the entwined fortunes of both countries economies, I can see why we are lending them the money. What I'm struggling to see is how this fits with the message of this government that there really was no alternative to the current level of cuts yet we can manage to lend this amount of money.

If it is a case of needs must and not lending them the money would be worse for us, I can accept that, but then doesn't that mean that the government had more of a choice about the depth of the cuts then they have previously told us?

Also, does this mean that the government is going to have to make further cuts to balance out lending this money to Ireland? In addition, given the importance of the British banks to the UK economy, how is this loan to Ireland any different to the loans to the British banks some on the right were so critical of the previous government for?

I have some difficulty with the notion that we are lending money to "Ireland".

What's happening is a bailout of an interlinked transnational network of banks. These banks have been minting money through a variety of dodgy mechanisms, with some variations in different places. In Ireland it was more about extending credit to property companies without proper checks being in place, in the US it was more to do with assembling dodgy portfolios of poor risk mortgages, getting rating agencies to rate them AAA, insuring them against the inevitable collapse, and pocketing the cash. In all cases, the assumption, correctly as it turned out, was that governments would step in to socialise the losses. Banks keep the gains, we pick up the losses.

The gainers in all this are the bankers, bondholders, and speculators. The losers are the people whose jobs will be lost and services closed, in order to effect a transfer of resources from poor to rich.

In the Irish case, some money will be lent by the UK and others. We will make some sacrifices in order to make the loan - other choices foregone, more jobs lost, more services closed, that kind of thing. The Irish people will owe the money, so more crap in store for them too. The people who will benefit from this will be the companies, speculators, bondholders who own the banks, because otherwise they would have had to bear the cost of the recklessness and utter irresponsibility of the banks.

As Dave says, it's about helping out a friend in need. But the friend is not who it seems.

[tonyh29]

sticking plasters to cover the many flaws in the eurozone bloc.

Italy nearly brought it down just after they joined its been on borrowed time since it's inception

Only thing one can say is thank god Labour lost the last elections because Mandelson claimed that the single currency had been a 'remarkable success' and that it remained in Britain's interests to join.

[Corcaigh]

Gormley pulls the plug, or at least indicates he will do after the budget is passed.

Statement by Green Party Leader John Gormley

The past week has been a traumatic one for the Irish electorate. People feel misled and betrayed.

The Green Party believes three things must be done in the coming two months to safeguard the future prosperity and independence of the Irish people.

These are:

* Producing a credible four-year plan to show we can make our Budgets balance by 2014.

* Delivering a Budget for 2011.

* Securing funding support from the EU and IMF which will respect vital Irish interests and restore stability to the Euro area.

* We have always said that our involvement in government would only continue as long as it was for the benefit of the Irish people. Leaving the country without a government while these matters are unresolved would be very damaging and would breach our duty of care.

But we have now reached a point where the Irish people need political certainty to take them beyond the coming two months. So, we believe it is time to fix a date for a general election in the second half of January 2011.

We made our decision last Saturday after a long series of meetings.

Since entering government in June 2007, we in the Green Party have worked to fix and reform the economy. It has been difficult. We have taken tough decisions and put the national interest first.

We cannot go back and reverse the property bubble and the reckless banking which we consistently spoke opposed. Nor can we control the market turmoil which has afflicted the Euro area.

We have taken extensive measures to recognise the losses and stabilise our banking system. However, it is now clear we need further measures to give market confidence about our banks and public finances.

We are now discussing ways of restoring stability to the banking system with the support of our European colleagues and the IMF. We have to ensure that the terms of any such support are in the interests of the Irish people and the wider Euro area. The timeframe for achieving a four-year plan, Budget 2011 and a good outcome from IMF/EU talks is very short. These matters must at this stage take priority ahead of everything else.

Despite our difficulties and disappointments, I believe we can get out of this situation. We must all work together to ensure the best outcome for everyone.

As an Irish politics junkie i love a general election, however this time its personal. I have a big stick waiting for any FF politician who dares come to my door.

[tonyh29]

and buying small amounts of gold

Shame Gordon isn't still here as you could have got some at rock bottom prices :winkold:

[Meath_Villan]

A big **** em all from me the unions need to be broken over here anyhow and I hope the IMF does it

I have friends and relations in the public sector garda and nurse also some working for the CC etc and they do abuse any benefits given eg extended maternity with full pay + any state aid, paid sick days up to three without a doctors note this "bank time" was crazy...ANyway thats my rant and I agree the euro project is nearly over anyway and a big thumbs up to the uk for offering the cash Its been all ove the media and has had nothing but positive response......

Oh I know that fianna fail is out the door but look at the other words removed ready to come in ......Im gonna vote labour from now on

[peterms]

...Signing up to the Euro bailout fund in May (Brown's last act) has pretty much put the final nail in our coffin...

I was trying to find out about this, as it escaped my attention at the time, and it's just been clarified in the Guardian.

The €750bn mechanism, agreed in May, currently has three sources:

• The €60bn community fund supported by all 27 members of the EU. Britain is responsible for 13.6% of this fund in line with the rate of its contributions to the EU. This requires a weighted majority of the EU's 27 member states to be activated, which means Britain cannot block the fund on its own.

• The €440bn European financial stability facility, which makes up the bulk of the system, is funded by the 16 eurozone countries. Britain is not part of this fund.

• A €250bn facility from the International Monetary Fund. Britain contributes to this fund as an IMF member regardless of its membership of the EU.

[Corcaigh]

A big **** em all from me the unions need to be broken over here anyhow and I hope the IMF does it

I have friends and relations in the public sector garda and nurse also some working for the CC etc and they do abuse any benefits given eg extended maternity with full pay + any state aid, paid sick days up to three without a doctors note this "bank time" was crazy...ANyway thats my rant and I agree the euro project is nearly over anyway and a big thumbs up to the uk for offering the cash Its been all ove the media and has had nothing but positive response......

Oh I know that fianna fail is out the door but look at the other words removed ready to come in ......Im gonna vote labour from now on

In full agreement with ya MV, i also have various friends & relatives in the public sector and they take the absolute piss when it comes to their wages and conditions. Unsurprisingly they were all FF and bought into the whole property is a safe bet schtick. The brass neck and sense of entitlement on this lot is a sight to behold.

Now the public sector parasites will fight tooth and nail to keep the Croke Park agreement, hoping the burden instead will be borne by the old, low paid (non unionised) and people on welfare. As much as the IMF will hurt us all, whe they sack the 1000s of overpaid and underworked public servants i'll smirk (until i emigrate).

There'll be a special place in hell next to the politicians, bankers & developers for those Trade Unions who's greed knows no bounds. Social partnership is a joke.

[peterms]

Here's a good article on what's going on.

You could be forgiven for not noticing it, but the new British government has just been forced to do what the old British government was forced to do: bail out Britain’s banks. The bail-out of Ireland marks a new stage in the privatisation of government by the financial system. Two governments, the British and the Irish, have been effectively taken over by a venal banking network which, using ordinary savers and productive businesses as hostages, forces the state to cough up whatever sums are required to save it from the consequences of its own greed and idiocy.

Even before coming to power the dominant Conservative side of Britain’s governing coalition was making Gordon Brown the scapegoat for the UK being broke, maxed out, skint, and claiming that only by savage cuts in state spending could Britain hope to salvage some vestige of public services among the ruins. Why, then, is this same British government about to lend Ireland, a member of the Eurozone, some £7 billion to see it through its current financial difficulties?

The answer is straightforward, although you wouldn’t think so from the way the story is being reported. The Conservatives have been remarkably successful in promoting a false version of the events of the past couple of years – that excessive government spending is the cause of the present mess.

The fact that the first great Eurozone financial crisis, in Greece, really was caused by crazily loose public purse strings has helped spread the lie. But the truth is that Britain and Ireland, like Iceland and, indeed, Spain, are in trouble not because these governments spent and borrowed too much but because households, businesses and banks spent, borrowed and lent much too much.

What is being presented as a loan by the British government to the Irish government is, in fact, a loan by the British government to the remnants of Ireland’s commercial banks, which are melting down. And the reason the British government is lending to the Irish banking system is because British commercial banks lent so much money to Ireland in the boom years. British banks hold less than £10 billion worth of Irish government bonds. But they hold something like £130 billion worth of other Irish debt – property loans, business loans and so on. George Osborne is not, as he claimed, helping Ireland because it is ‘a friend in need’. He is to all intents and purposes bailing out British banks.

It has been depressingly easy for the Cameron administration to hypnotise the British public into forgetting that our current economic plight is a result of reckless lending by the country’s banks rather than reckless Labour borrowing. £7 billion, the government must feel, is a small price to pay to avoid another British banking crisis, and to avoid the country waking up and remembering that we are much more like Iceland than we ever were like Greece.

[Gringo]

A big **** em all from me the unions need to be broken over here anyhow and I hope the IMF does it

I have friends and relations in the public sector garda and nurse also some working for the CC etc and they do abuse any benefits given eg extended maternity with full pay + any state aid, paid sick days up to three without a doctors note this "bank time" was crazy...ANyway thats my rant and I agree the euro project is nearly over anyway and a big thumbs up to the uk for offering the cash Its been all ove the media and has had nothing but positive response......

Oh I know that fianna fail is out the door but look at the other words removed ready to come in ......Im gonna vote labour from now on

In full agreement with ya MV, i also have various friends & relatives in the public sector and they take the absolute piss when it comes to their wages and conditions. Unsurprisingly they were all FF and bought into the whole property is a safe bet schtick. The brass neck and sense of entitlement on this lot is a sight to behold.

Now the public sector parasites will fight tooth and nail to keep the Croke Park agreement, hoping the burden instead will be borne by the old, low paid (non unionised) and people on welfare. As much as the IMF will hurt us all, whe they sack the 1000s of overpaid and underworked public servants i'll smirk (until i emigrate).

There'll be a special place in hell next to the politicians, bankers & developers for those Trade Unions who's greed knows no bounds. Social partnership is a joke.

That's right, because it was the unions that created this problem, crush the bstds.

[Meath_Villan]

They are part of the problem are they not?

[peterms]

Another little European difficulty for Mr Cameron.

David Cameron's alliance in the European parliament is falling apart after the group's Polish leader left his own party because it was too rightwing and then faced calls from fellow members to step down.

Michał Kamiński, the Polish leader of the European Conservative and Reformists group, announced that he had left Poland's Law and Justice party, Cameron's main ally in Europe, because it had been taken over by extremists.

Fellow MEPs in the alliance have told the Guardian that Kamiński should step down as leader of the ECR because he no longer has a mandate to lead.

The developments are a major embarrassment for the prime minister and William Hague, the foreign secretary. They took the party into an alliance with the Law and Justice party in July 2009, despite criticism that they were ignoring the parties of Europe's centre right, such as Nicholas Sarkozy's Union for a Popular Movement in France and Angela Merkel's Christian Democratic Union in Germany....

[Meath_Villan]

Add patrick neary to the list of words removed I cant belive he was allowed to retire with a big bonus

[Gringo]

They are part of the problem are they not?

They were not part of what caused the problem but crushing them seem to be part of some people's idea of a solution.

[drat01]

Now that the UK owns Ireland again maybe we can set some ground rules to stop you misbehaving again

- You will not send across to the mainland the following, Graham Norton, Louis Walsh, Colin Farrell, Rachel Allen

- Westlife and Boyzone will be returned to serving in McDonalds

- St Patricks day can stay but it will not be inflicted on any other country and the colour green will be banned on that day

- You may come across to Cheltenham, BUT there is no way you will be allowed to drink

- Guiness will be accepted as a decentish pint but nothing more than that

- Magners will be banished to what it was first developed as, i.e. ginger hair dye

- RyanAir and BA will be run by people who are not egotistical rocket polishers with no respect whatsoever for the paying public

- Gerry Adams will be made to inhale helium before speaking

There may be more, it really depends on how you behave. Now run along and play with your cousin from the North .

Apologies for any offence - copied from various Tweets and only meant for slightly amusing effect

[Lombardo]

A big **** em all from me the unions need to be broken over here anyhow and I hope the IMF does it

I have friends and relations in the public sector garda and nurse also some working for the CC etc and they do abuse any benefits given eg extended maternity with full pay + any state aid, paid sick days up to three without a doctors note this "bank time" was crazy...ANyway thats my rant and I agree the euro project is nearly over anyway and a big thumbs up to the uk for offering the cash Its been all ove the media and has had nothing but positive response......

Oh I know that fianna fail is out the door but look at the other words removed ready to come in ......Im gonna vote labour from now on

You say you want the Unions to be completely wound up and scrapped, and then you go and say that you will be voting Labour from now on.... Is that not a bit of a contradiction in terms? Labour sit on the shoulder of the unions here and as a result will do as much as they can to please them... God only knows who I'm going to vote for.. Each of them are as corrupt as the other. The one person who is getting away scot free is Bertie who was the chief responsible for this entire mess... Him and his Building cronies.....

[Meath_Villan]

Yes indeed that was the point !!!!

[DanishVillan]

If anyone is curious about the history of money and banking, you should google "The Money Masters"

15 years old and 3,5 hours long but a good piece of info, still holding truth.

[Risso]

Now that the UK owns Ireland again maybe we can set some ground rules to stop you misbehaving again

- You will not send across to the mainland the following, Graham Norton, Louis Walsh, Colin Farrell, Rachel Allen

- Westlife and Boyzone will be returned to serving in McDonalds

- St Patricks day can stay but it will not be inflicted on any other country and the colour green will be banned on that day

- You may come across to Cheltenham, BUT there is no way you will be allowed to drink

- Guiness will be accepted as a decentish pint but nothing more than that

- Magners will be banished to what it was first developed as, i.e. ginger hair dye

- RyanAir and BA will be run by people who are not egotistical rocket polishers with no respect whatsoever for the paying public

- Gerry Adams will be made to inhale helium before speaking

There may be more, it really depends on how you behave. Now run along and play with your cousin from the North .

Ha ha, agree with most of that! Apart from the Rachel Allen bit though. I'd do her until it was a bloody stump.