What Ireland should do

This is a doozy.

Do, do, read it in full.

And he\’s quite right too.

6 thoughts on “What Ireland should do”

  1. ” the Irish government ….repaid the bank bondholders, even those who had not been guaranteed under the original scheme. This suicidal policy culminated in the repayment of most of the outstanding bonds last September.”

    Again and again I read the news and think “Dear God, I know nothing much about this but I could do a better job than these wallies.” And what’s worse, I’m probably right.

  2. An excellent article by Morgan Kelly. It can’t be over emphasised just how much the Irish are being screwed by Germany and France. Moreover, if he is to be believed one can add the US to those pair. The bail out was so outside the normal IMF modus operandi that it was obvious other forces were exerting their will. The IMF would normally have advised haircuts on bondholders before providing funding. Getting 100 cents on the euro for securities that were lucky to be worth 40 cents was Xmas come early for bondholders.

    There is simply no possibility of the Irish government with those debts getting their finances sorted where they could again get financing from private capital markets. The EU/ECB must know that so they can only be trying to buy time.

    Why the Irish just lay down and accepted the terms by the EU/ECB is a mystery. They did and still do have leverage in negotiations. I suppose what matters is how credible their threats would be. What if the Europeans called their bluff? The government trying to balance the books if the ECB cut them off from funding could only happen at huge social cost.

    The bottom line is the Irish state is insolvent and they will remain insolvent until such time as they can go back to the market for refinancing. That is just not going to happen until they do something with the overhang of debts. A European protectorate is an accurate description.

  3. Astonishingly clear sighted yet at the same time to most whose prime purpose is not the saving the Euro, it was logical long ago

  4. He didn’t mention leaving the Euro, which would enable the Irish government to effectively slash public wage bills.

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