November 15, 2013

Endgame Default Actors

If I’m at 20,000 feet doing my parachute jump for the first time and I’m told I must do the jump now without a parachute; or else,  jump now with a parachute and wait until next year to do it without a parachute, what would you choose?

Image of Lord Percy from Blackadder II

Image of Lord Percy from Blackadder II (Photo credit: Wikipedia)

Brendan Howlin TD Minister for Public Expenditure and Reform was questioned by RTE yesterday on what were the chances of a successful exit from bailout without a backstop. His response was the usual panegyric, praise of the Irish economy, a mantra incantation of magic gods sung by all FG/LB ministerial choristers, their one and only song dirge.

RTE thanked him. He did not answer the question.

Enda Kenny Taoiseach as usual was hidden from view. But you can see him gloriously surface at any public event with a prepared soundbite or two imbuing all with the confidence the troika have mandated their favorite glove puppet to spread.

Like Ceaucescu he should book a helicopter sooner rather than later. Fresh from losing his Seanad referendum assault on Irish democracy and spurred on by EC love hugs each time we see Kenny, he makes it sound we’ve all just discovered gold.

He brings back fond memories of Black Adder’s Lord Percy Percy who instead of discovering gold discovered ‘green’….Lord Percy Percy was heir to the Duchy of Northumberland in a manner similar to the way An Taoiseach is spoken of as an outside shot for European Commission president.

Kenny has failed to realise his election mandate to vindicate the rights of Irish people to deal with odious and unconscionable bank losses.

Instead he has capitulated to the demands of financial interests and loaded these burdens onto Irish people driving home the false promises of austerity as Europe’s ‘best boy in the class’

This morning Tanaiste Eamon Gilmore  15/11/13 was speaking out of his usual forked tongue but he was even more tongue-in-cheek than usual.

He said Ireland after a long process of consultation for the past 18 months had decided to go it alone without a backstop in exiting from bailout.

What he didn’t tell us was the ‘European partners’ refused to bail us out further. The Eurogroup had given us the boot!

The truth is we are an economic Frankenstein failed experimental attempt by Eurogroup ‘partners’ to get their money back. They lent us a load of dough their banks are slicing a nice interest rate from.

No burden sharing or debt write-down was offered to Ireland. Irish lap dog politicians were sold a pup of austerity by Europe and its been doled out by Irish political parties since with the Labour Party leading the pack defending the financial interests of banks rather than democratic rights of Irish people.

Unconscionable and odious debt was doled out to Irish citizens while gambling bondholders in the Irish banking system have been paid off. Irish people have too long been fobbed off by FG/LB and FF political pinocchio’s blinded by greed and arrogance and europhile conceit as they flounder in the halls of Europe

Eamon went on  to echo Professor Honahan of the Central Bank (RTE’s Primetime 14/11/13), Honahan said if we had been given a backstop, we would still next year have the same decision, to go it alone at that time?

They do have a point. With another €3bn in austerity in the works for next year, with the levels of personal/commercial and mortgage debt black holes in our banks, European and global growth rates grinding to a stop, with stress tests bringing  losses in banks to  surface, conditions before the dirt hits the fan next year, are more benign than they will be next year!

For comparison, have a look at Richard Attenborough’s killer whale hunt, a grey whale’s calf targeted, initially separated from its mother, then attacked by killer whales…Ireland exhausted by austerity, its growth rates barely above the waterline…

The setting up of NAMA and the €67bn bailout by the troika were all predicated on growth rates of 3% making our 124% debt to GDP and payback of troika bailout manageable. Those initial targets have been continuously wound down and floored.

The Irish CSO office has questions to answer, but no one questions or holds accountable  under performance when it comes to statistics. Perhaps an auditing of probability projections where previous errors over a five year period should accompany statistical nonsense propaganda.

Current president of the Eurogroup Dutch Finance minister Jeroen Dijsselbloem believes in austerity, that austerity leads to growth, the more we cut, the faster we return to growth. To date he has produced no evidence this counter intuitive view is true. Unless specious statistical nonsense such that if growth in an economy declines by 95% then subsequently grows back to 50% of current levels based on a rising from 5% of previous levels, then austerity has been a success.

He supports the view there should be no retrospective bailout for Irish banks!

Believe it or not I listened to Noonan cautioning Ireland would not be returning to the levels of growth experienced by Ireland a few years ago. We have a government of debt sheriffs and bailiff serfs of the financial industry.

Mr Noonan said Ireland had built up more than €20bn in cash reserves and even if we had a credit line, we wouldn’t have to use the facility next year.

He’s getting ready to blow more of your money to pay back the debt sheriffs of the Eurogroup banks instead of using it to break free from Europe, negotiate an Icelandic Bank of International Settlements’ write down of our debts. Ireland’s reserves are targeted by a long queue of creditors.

The European project of the euro has been a calamitous failure. Its policy of no write down and extortionate levying of taxpayers to pay for odious bank losses is even a greater failure.

Finance Minister Noonan hails bailout exit as ‘restoration of economic freedom’! With 125% debt to GDP and  with debt that hasn’t begun to be paid back under conditions as harsh as that upon Germany under the Treaty of Versailles….Noonan suffers from a false definition of freedom!

Germany’s debt was later wriiten down from 120 billion German gold marks to 20 billion gold marks

Their write-down was on foot of damage caused by Germany’s role in WW1.

We were not given a writedown though the Irish public were victim of Irish ‘pillar’ rogue banks with carte blanche given to them by the irresponsible lending practices of the ECB


 Eurogroup and ESM

The most authoritative and informed view on where negotiations on banking union  how banks will be recapitalised by the ESM is that, if ever BU is agreed (there are enormous obstacles and many agree this will be an impossible feat) it will put in place stringent rules and regulations for European banks built upon the stress tests to be carried out in 2014.

The ESM (European Stability Mechanism) funds will only be used to bail out banks in the future under this newly consolidated Banking Union regime for banks. However the European project is viewed by many to be holed beneath the waterline.

The Eurogroup members are European Finance ministers. Eurogroup exercises political control “over the currency and related aspects of the EU’s monetary union such as the Stability and Growth Pact.

Eurogroup has completely failed in its mission to keep eurozone members within the terms of the SAGP. It has failed to regulate its own members. It has also failed to regulate the European Central Bank by giving it powers to regulate the performance of its member central banks. It has led a pan european free-for-all and the chickens are coming home to roost. BU is too little too late.

The Eurogroup has failed to support Ireland’s bailout and has proved to be a Sheriff of Nottingham debt extractor for Ireland.

Our experience should be a wake up call to the need for European exit.

We need new trading partners especially with our neighbour in the UK. We should look at an all Ireland 32 county unified nation joined in a new commonwealth agreement with the UK.

Consideration should be given for the development of a new Commonwealth of Nations for the sterling area joining with the UK in an alliance similar to the EMU, a new ESU European Sterling Union developing new bilateral trade agreements with China and both African and BRIC countries.

As we approach 2016 new departures are required to leave behind the zombie future created for us by failed political parties.

In a world of stormy seas, our boat is not fit for purpose, we need a safe harbour. We need to avoid a Eurogroup towrope thrown by ‘european partners’ using our virtual lab economy to see how it will experimentally perform in the real world; to see how likely Spain, Portugal, Greece and Italy may fare when their towropes are cut.

Eurogroup unwilling to fund a backstop bailout have their ideas on the repatriation of their bailout funds. They have their eyes on that €20 bn reserve fund, including any further state assets they can extract from Europe’s favorite zombie Frankenstein economy.

I didn’t mention Kenny’s failure to hold a public banking inquiry to date to examine communications between Irish banks, Irish Regulator, Irish Central Bank, ECB, Irish politicians, Department of Finance and some other large matters. Enuf said.



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