Vote No

April 27, 2012

Following last blog with arguments against Compact that even a child can understand, here we move on to more adult territory:

Re Speech by Governor Honan of Irish Central Bank.

The following are arguments against the falsehood being disseminated that Ireland must sign the ‘Compact’ or it will not be able to avail of funding from Europe, the so-called ‘blackmail clause’ in the compact.

“On 29 November 2011, European finance ministers decided that EFSF can guarantee 20 to 30% of the bonds of struggling peripheral economies.[13]”

Re above, could PH not direct himself to using the above mechanism to explore alternative funding through the issue of Irish sovereign bonds that would be purchased by European sponsored entities such as banks and other financial institutions, as an alternative or complementary source of funding for Ireland to present EFSF. I won’t even go to the ¢16 + bn interest through Promissory Note repayments he’s failed to negotiate down.

Note the following: PH is urging a Y vote on the ‘Compact’. He ought to be contributing as a public servant unbiased and objective information instead of one sided propaganda on the Referendum.

For example, perhaps he should indicate why our interest rate was negotiated at penal rate 5% + on bailout repayments to the EFSF while borrowing “costs for EFSF of 2.89%.” We subsequently because of embarrassment over the Troika’s dealing with Greece and Portugal finally availed of marginal debt relief, but we’ve failed to negotiate debt write down:

Finfacts September EFSF Update

He should have walked out of negotiations at 3% !!


“Irish bailout The Eurogroup and the EU’s Council of Economics and Finance Ministers decided on 28 November 2010 to grant financial assistance in response to the Irish authorities’ request. The financial package will cover financing needs up to €85 billion. The EU will provide up to €22.5 billion through European Financial Stabilisation Mechanism and the EFSF up to €17.7 billion over 2011 and 2012.”

It is a falsehood to claim that Ireland will be refused bailout if it does not sign the ‘Compact’ for funding through ESM. The falsehood/propaganda that EFSF will end in 2013 leaving Ireland without funding is being falsely disseminated by Government.

Wiki above:
” Had there been no financial operations undertaken, the EFSF would have closed down after three years, on 30 June 2013. However, since the EFSF was activated in 2011 to lend money to Ireland and Portugal, the Facility will exist until its last obligation has been fully repaid.[10] ”

“The EFSF is authorized to borrow up to €440 billion,[5] of which €250 billion remained available after the Irish and Portuguese bailout.[6] A separate entity, the European Financial Stabilisation Mechanism (EFSM), a programme reliant upon funds raised on the financial markets and guaranteed by the European Commission using the budget of the European Union as collateral, has the authority to raise up to €60 billion.”

It is the intention in ECB that EFSF and EFSM will be amalgamated. EFSM will remain permanent but EFSF will remain for as long as its programmes run eg until it gets its money back from Ireland.


“In order to fulfil its mission, the EFSF is authorised to:
* issue bonds or other debt instruments on the market to raise the funds needed to provide loans to countries in financial difficulties.
* intervene in the debt primary market
* intervene in the debt secondary markets
* act on the basis of a precautionary programme
* finance recapitalisations of financial institutions through loans to governments including in non-programme countries”

But, let’s assume funding will end through EFSF for Ireland contrary to the above documentation.

You do not have to be in a programme to avail of support from EFSF. Not only that, but because we are already in a programme under EFSF, this is guaranteed not to run out until all our debt is repaid. So, for all intents and purposes, we already have a programme under EFSF and have no need to avail of EFSM. EFSM is directed primarily at support of larger states eg Spain/Italy whose scope of needs would go far beyond the scope of EFSF.

But other sources of funding would exist for Ireland outside an EFSF programme. In pursuit of an agenda of fools rush in where angels fear to thread, you would also need to suspend disbelief that Europe would not lend us money to pay back its own banking system.

But lets suspend disbelief and go for three alternative scenarios.

1. Remaining within the euro. It is not inconceivable that another governor of our Central Bank in the future could negotiate a loan directly from the IMF

2. Other sources, our neighbours, UK and others, Canada, Russia.

3. Debt writedown following exit from euro.

Do we really need another Groundhog day for Ireland repeating the mistake of the Irish ‘guarantee’ to its banking system with another fools rush in where angels fear to thread even bigger mistake of ‘Compact’ guarantee of ESM for european financial institutions paid for by taxpayers with austerity, destruction of public services and democracy.

Given Francoise Hollande signal re protocols and changes he wishes to ‘Compact’, perhaps Gilmore et al should put off Referendum Day until those new protocols are agreed. It would be too much to ask that PH et al negotiate to remove the blackmail clause or have a protocol inserted that Ireland insofar as its needs are already addressed by EFSF, is not required to sign up to the blackmail clause.

Time to wake up from Tir na N’Og and say ‘NO’. Refuse to accept the Irish constitution to be overwritten with the blackmail terms of the ‘Compact’.



One Response to “Vote No”

  1. colmbrazel said

    Note the IMF have come out and verified my claim above, “It is a falsehood to claim that Ireland will be refused bailout if it does not sign the ‘Compact’ for funding through ESM. The falsehood/propaganda that EFSF will end in 2013 leaving Ireland without funding is being falsely disseminated by Government.” Funding is available from the IMF.

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