Ireland Grows Up And Stands On Its Own Feet!

January 28, 2011

Leader Enda Kenny and Finance spokesperson Michael Noonan will meet with the President of the European Commission Jose Manuel Barroso today 28/01/2011.

They want to try and renegotiate the terms of the bailout should they assume power after the General Election.

Read more: http://www.breakingnews.ie/ireland/kenny-travels-for-talks-with-barroso-on-bailout-491057.html#ixzz1CJyBF0vT

This meeting will probably go this way:

Barossa: “Sorry, your banks got you into the mess, its not our problem. If we cut a deal for you, it could bring calamity to the European banking sector. Most European countries are doing ok under this system plus citizens across Europe would not support their banks and their money being used to bail you out. Perhaps in two years we might restructure the IMF/EU bailout by a couple of percentage points, but that’s about it.”

The problem with the above is Noonan may come back to Ireland, there’ll be an election, and a ragbag government of FF/FG will hairshirt this place stealing taxpayers money to give to the banks for the next ten years in a vassal state.

The solution to this problem is the following, it is difficult, everyone will have to pull together, but read this first: http://bit.ly/gsPO8Y

“…Dr Roubini argued that compelling senior bondholders to take pain was part of the solution to the financial bind in Ireland.

“You have to have a whole programme that leads to fiscal austerity that leads to stabilisation of the public debt, which resumes economic growth and competitiveness, so the challenges the country is facing are very difficult.

Dr Rogoff, a professor of economics at Harvard, said Ireland had “good fundamentals” outside the debt problem and said most of the country’s growth story was real. For any incoming government, the task would be to maintain that and not undermine it.

However, he said it will be difficult for Ireland to avoid some form of debt restructuring. Asked if he was referring to sovereign or bank debt, he said “I’m afraid it might be the sovereign debt”, since the sovereign had guaranteed bank debt.

“It’s not reasonable to say that senior bank bondholders should get bailed out and I think it undermines the whole sense of justice, the whole social fabric in Ireland and elsewhere to have these massive bailouts,” he said.

He acknowledged the view of the European authorities that senior bondholder haircuts were “very dangerous” but the questions that arose were what was in Ireland’s interest and what was in Europe’s interest.”

“There may be contagion. The question is how long can Ireland take the pain that’s necessary? A year, two years? Maybe. But three or four? Countries outside of Romania maybe, under Ceausescu, really haven’t done this and so it’s possible but it’s very demanding.”

Also, Daniel Gros of http://www.ceps.eu/ made a similar point when interviewed on Morning Ireland, that we have a choice between long term Ceaucesco like austerity and a short 2 yrs sacrifice.

We couldn’t do the following if we did not have good fundamentals, good export led growth, good agri sector, good corporate footprint. Because our manufacturing base has been decimated, its possible impact on that side of our economy is negligible.

We need to reset the economy.

Because banking debt has become sovereign debt and because of this we are within perhaps 2 yrs of a default, we need to do an orderly default right now.

This means we have to leave the euro, it no longer has a future for us for the foreseeable future, at least 10 years, plus rising interest rates in Europe can catapult Ireland over the edge, even if we chose not to leave, but to stay. Also, leaving the euro would provide a solution to the peripheral problem from the European perspective.

PuntNua or adoption of sterling as a currency to follow the euro could form the basis of bilateral support from the UK as we go through the process.

The process would be similar to the Icelandic one. Debt restructuring would include burning senior bondholders. We would need interim support and aid from allies everywhere including close neighbours.

The economy could be reset in as short a time as two years. But prospects for growth would be tremendously high thereafter.

There are people ready to help with the transition.

They would be a different bunch to the 1916 gang and might have foreigners on board such as Daniel Gros, Roubini, Stiglitz, Krugman, Morgan Kelly, Constantin Gurdgiev, Morgan Kelly, Karl Whelan, Brian Lucey and many others.

We would take Ireland back from the gombeens and restore dignity and sovereignty?

Any takers?

As part of the above reset, it would be wise to look at how well NAMA is operating. The story is not good!

NAMA  requires public transparency and accountability if not a complete wind down returning the toxic loans to banks who should be ordered to immediately liquify these loans. Precedents for this Sweden 1992, the process for this took 2/3 years without the public waste of money that is NAMA.

NAMA Monster …. banks not pursuing developers….

http://www.rte.ie/radio1/todaywithpatkenny/

From RTE website:

Thursday 27th January 2011

NAMA

It has been claimed that people who owe hundreds of millions of Euro to the banks are buying back their debt at rock bottom prices through third parties and offshore companies. Fianna Fail Senator Mark Daly (whose family is in the auctioneering business) claims some property is being sold back for “virtually nothing” to the original owners and that NAMA is not following legislation enacted by the Oireachtas.
Mark Daly joined Pat along with Deputy Business Editor of the Irish Independent Emmet Oliver.

podcasts here:

http://www.rte.ie/radio1/todaywithpatkenny/#Podcasts

End

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