Irish Swan Song!

May 9, 2011

The German Ein Danaergeschenk is a “fatal gift” that brings misfortune or causes problems. For some reason, English doesn’t normally speak of a “Greek gift” and German doesn’t warn against “Greeks bearing gifts.”

Morgan Kelly has echoed sentiments in this blog against our ‘so-called’ bailout so you won’t find much criticism here of its views, but plenty of praise.

Nevertheless, the naysayers were out in force and Pravda RTE yesterday had Patrick Honahan, Central Bank Governor and chief bailout negotiator, and today John McHale, Professor of Economics University of Limerick, blistering the airwaves with denunciations of Kelly and his views. Per usual, perhaps mindful of the adage of ‘the boy who cried wolf’, has not risen to the bait of debate, Kelly has wisely kept his silence and ex cathedra dignity, since the article was published.

The naysayers and swans who disagreed the most with Kelly’s analysis are the same swans, who urged we could successfully paddle against the current at the top of the waterfall of the ECB/IMF bailout.

Though they argued for optimism and confidence in the face of a loss of credibility, when bank losses were being revised upwards throughout 2010, in spite of their mistaken judgements to the contrary, we fell into the hands of the ECB/IMF bailiffs towards the end of 2010.

From under the water of ECB/IMF bailout yesterday, Honahan dragged himself out of the water, climbed back up the cliff, to take another dip paddling away this time to avoid default and the weight of Kelly’s weltanschauung or world view.

Arguably the current Honahan has to battle against,  is much stronger now with bailout borrowings of approx €57 billion added to our previous borrowings,  projections of 2.25% growth rates 2011-14 already missed in 2011, as growth hedges to less than 1%. There is plenty of ducking and weaving, to deny the impact of austerity cuts over the next three years to 2013/14.

But no, Honahan is happy to continue paddling away in the hope ongoing discussions with the ECB will provoke mercy while being roasted by the ECB.

But there was a sense of  desperation in the voice of Honahan on RTE radio yesterday.

He denied it was possible to walk away from the guarantee and bailout as Kelly suggests citing legal advice telling the government this was not possible. Under the Freedom of Information Act we should have access to this advice that according to Honahan was made available to him. But typically the interviewer on Pravda RTE did not probe this claim by Honahan and the matter was left unchallenged.

Its time journalists challenged this false claim by Honahan:

Bruce Arnold here writing in November 2010  has challenged, as many others have done, including yours truly, the legality of the bailout under article 17.2 of the Constitution.

“If the banks had been allowed to fail, there would have been decisive pain, but new growth could have started.

Ultimately, it is easier to understand what has happened if we refer back to our Constitution, a document surprisingly sharp on all issues connected with how the State spends our money. In Article 17.2 it states: “Dail Eireann shall not pass any vote or resolution, and no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dail Eireann by a message from the Government signed by the Taoiseach.”

Of course the Lisbon Treaty vote made our Constitution largely irrelevant. But, personally, I hold it dear. There has been no intelligible message. How could there be when Patrick Honohan, Noel Dempsey, Brian Cowen and Brian Lenihan are neither putting the full story before us, nor understanding or explaining it in any coherent way. We don’t even have the text of the agreement. What ‘agreement?’ you say. Why, the agreement to abandon our sovereignty.

– Bruce Arnold”

Recently, Brian Lenihan has signalled he was shafted by the ECB, with the suggestion by MK and others Brian Lenihan was of the view, we did not require bailout, our reserves showed this. While this interpretation relies on seemingly good political navigation by Brian Lenihan, exceptional to the rule, nevertheless this paints the role of Honahan, in the rush to bailout, even more ignominiously than we were led to believe hitherto. The suggestion is Honahan played for the bankers, not the home team!

The matter should have been referred to our Supreme Court by Honahan, by Lenihan/Cowen, by  President McAleese.  We got no information, no White Paper to educate the Irish people prior to a referendum? Citizens were not given the chance in this undemocratic, plutocratic kleptocracy of ours.

The matter to seal the guarantee following the discovery that bank losses were understated, by the tens of billions, was further sealed by Honahan on radio yesterday with the view, that even if these losses were known prior to the guarantee, the guarantee undertaken by the government, was the correct course of action. This view must surely represent the hiatus of Gombeenism in the history of Irish public life.

However, I do not need a qualification in jurisprudence to know how the complaints by NAMA re false documentation, missing documentation, B&B Bed & Breakfast loans, will fare in court.  I refuse to believe the extent of NAMA’s losses were unknown to senior management at the time of the guarantee.  Accountability and culpability would lose any case made by Anglo, or by bondholders, against the Irish State.

The case to be made by the Irish taxpayer in walking away from the guarantee is  strong and backed up by our constitution, even though our Constitution is ignored by our politicians.

But Honahan’s mistakes are not limited to his actions in sealing the Irish Guarantee. He reinforces his view with the  argument that reneging on the guarantee, would have led to instant bankruptcy:

Firstly, its arguable that adopting a position on walking away from the guarantee, at its moment of chess piece checkmate  contagion of the eurozone, would have brought about an emergency reversal of the deal offered to Ireland, with better terms than the 5.8% Ein Danaergeschenk eventually given to our Charge of the Light Brigade negotiators;  Honahan had the Irish National Pension Reserve Fund to dip into, to keep our show on the road and defend our position. This matter was not unnoticed by the ECB who’ve made sure we pony up for losses from this reserve fund plunder before sinking us with bailout.

We should do as Kelly says, bring our balance of payments into line immediately, set losses made by the ECB and our private banks, not against the state, but against the banks.

The renewed state could set up a public bank to serve the needs of the people of Ireland along the lines of the Bank of North Dakota, see more about public banking here:

Either we do this, or we come a dominion of the ECB, our fiscal situation quickly deteriorating towards default, without a sovereign economy; and with a puppet government in service of the ECB/IMF presiding over the decimation of employment in Ireland currently 14.6%. The only message of hope to young people, emigRATION,  austerity is just beginning to cut into the economy….

Time to end the gombeenism! Its hard to know if ECB has set this country up as the village idiot, or scarecrow, to frighten Spain as MK believes.

Yes, this would be difficult with public service cuts of the order of 33.33% and welfare cuts of the same order to boot. But in spite of useless leadership at the political level, we have fine citizens in Ireland such as the Michael Collins or Tom Crean reincarnation in the person of Morgan Kelly; and friends in the world who would help; and we could help one another.

Its essential to reject the bailout loan which is more lending, more loans, more drink for the alcoholic. Lets give the banks back to the ECB and walk away from their messy pillars that endanger us all.

We need a Bank of Dakota that will fully serve the real needs of the people, not the rotten hulks of Anglo and AIB that lead to 36% and rising unemployment and national default.

This country has real assets in agri food, tourism, that require to be released after we clean the mess created by the financial ponzi schemes that threaten us throughout the banking sector and Nama. Feeding these ponzi schemes with further alcohol or chips at the casino tables, is not the answer.

Its time to end the agenda set for us by swans such as Honan, who’ve proven the worthlessness of their predictions in the past.

Let’s repudiate the blindfolds they urge us to wear for the future.

Lets close our ears to their Greek siren swan songs that lead us over the precipice to default.



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