Irexit  under Brexit?

“Imagine that the UK and EU form a free trade area, but that the UK sets a 20% tariff on Japanese cars, while the EU sets a 10% tariff. Without border controls between the UK and EU, everyone would import Japanese cars into the UK via the EU — which would undermine the UK’s trade policy. Similarly, imagine that the UK does a trade deal with the US, and agrees to admit American beef duty-free, while the EU retains a 15% tariff. Again, absent border controls between the UK and EU, everyone would import US beef into the EU via the UK, thus undermining EU trade policy.”( Kevin O Rourke )

http://www.irisheconomy.ie/index.php/2017/02/16/brexit-customs-unions-and-borders/

http://www.independent.co.uk/news/uk/politics/brexit-northern-ireland-border-guy-verhofstadt-single-market-customs-union-european-parliament-a7972596.html

“The resolution rubbishes Britain’s proposals for an infrastructureless NI border based on spot checks and says that the UK plan for a lack of physical infrastructure “presumes that the United Kingdom stays in the internal market and customs union or that Northern Ireland stays in some form in the internal market and customs union”. The PM has ruled out keeping the UK as a whole in the customs union or single market.”

It is now the case  negotiations over Brexit are focusing on 2 key areas 1. the Financial and 2. the Irish Border.

To understand the latter consider the impact on Spain of Catalonia leaving Spain purely from a trade perspective; or California leaving the US; or Kerry leaving the Republic.

By way of further clarification could I take issue with the use of the term Sovereign Republic of Ireland in Brexit negotiations : “Sovereignty is the full right and power of a governing body over itself, without any interference from outside sources or bodies. In political theory, sovereignty is a substantive term designating supreme authority over some polity.[1] It is a basic principle underlying the dominant Westphalian model of state foundation. ” https://en.wikipedia.org/wiki/Sovereignty

Ireland has given up large chunks of its sovereignty to the EU many EU treaties ago and can no longer consider itself a sovereign republic.

Back to the point:

O Rourke quotes: “The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.”

Clearly we deduce Ireland if it remains in the EU cannot negotiate a FTA (Free Trade Area) for itself to set tariffs on imports. If it did so, it would have to pay for and accommodate an expensive border. Ireland must abide within European rules.

So we are left with the remaining option to consider, NI remains within the customs union.

Leaving aside objections by the DUP let’s go back to the sovereignty definition above. The British people have voted as a democratic people for Brexit. This means at the very least leaving the customs union with a new sovereign UK setting its own custom duties on imports and exports and rejection of a common customs tariff set by the EU.

But Kevin O Rourke in this paper offers many compelling reasons for Ireland to remain in the EU largely attributing Ireland’s prosperity to its membership of the EU. Unfortunately his arguments view membership of the EU through rose-tinted glasses.

For example he ignores the fact that FDI investment in Ireland through the 90’s to this day largely exports to the rest of the world and not the EU.

Our membership of the EU is a card largely overplayed to explain the attractiveness for Ireland for FDI. Ireland has many other attractions for FDI other than membership of the EU. Ironically many of Ireland’s tax policies are considered by the EU as anti-competitive and unfair and are targets for revision.

O Rourke ignores the hosing of free money into Ireland through its membership of the EU area and the lack of financial controls that led to investment of large parts of this money into an unproductive housing and property market, with growth impelled through construction of ghost housing, land lordism, commercial property markets that were stoked in rush to profit margins by Irish banking under a Central Bank largely government free of ECB European regulation.

Ireland’s financial collapse circa 2010 was made in the promise of membership of the EU providing financial stability of our economy freed of exchange rate controls and uncertainties due to our national currency.

We would be free of such unforeseen consequences as financial collapse? In that regard membership of the EU has been a dismal failure whether through Irish or European bad governance.

We currently have a debt to GDP ratio of 75% https://tradingeconomics.com/ireland/government-debt-to-gdp

Since the Paradise papers and before the above 75% is unreliable as its made up of figures from our multi nationals that through means such as the famous Double Irish involve offshore sales, trick accounting methods dubious to say the least.

Here is Ireland’s €200bn+ debt clock and the figure rises by the second. It rises by over €300 per second. Our financial affairs and our banks are still in a perilous state.

https://www.nationaldebtclocks.org/debtclock/ireland

Our banks are vulnerable to external shocks such as Brexit. UK is a major market that will instantly make our agri exports uncompetitive and through  inward flow of cheaper goods could severely damage our retail industry as well as our agri industry.

We havn’t done as well out of our membership of the EU as europhiles like O Rourke would have you believe. We gave away our fishing industry, compare ours to that of Norway, ” With a coastline of more than 83 000 km, including fjords and islands, Norway is one of the world’s leading nations regarding the production from marine fisheries and aquaculture. The fisheries sector has always played a key social and economic role, nationally and regionally, and has been the basis for settlement and employment along the entire Norwegian coast. The vast marine areas under Norwegian jurisdiction are among the most productive in the world and provide ideal conditions for aquaculture production. Fishing and fish farming represent 0.7 percent of the gross domestic product (GDP) in 2010, with 12 900 full-time equivalents employed in the sector. In 2009, Norway ranked 11th in global capture fisheries production and the 7th in aquaculture production. It produced 3.5 million tonnes of seafood, about 25 percent coming from the aquaculture industry. ” http://www.fao.org/fishery/facp/NOR/en

We have legacy issues stemming from financial collapse not the least of which is our homelessness, property crisis and trolley bed “8101 patients on trolleys in September 2017 awaiting admission for in-patient treatment. This represents a 7% increase when compared to September 2016.” https://www.inmo.ie/Trolley_Ward_Watch

Society in Ireland is more unfair and fractured the gulf between rich and poor widening rather than decreasing.

Membership of the EU involving tax harmonisation, defence, and EU trade policies changing with UK under Brexit make a compelling reason for Ireland to review its membership of the EU.

It seems to me we have 3 choices.

  1. Remain in the EU and take what comes. This would be economically, politically and socially a disaster for Ireland. O Rourke states “Those who want Ireland to leave the EU know that they are in a small minority, and many will not come out and argue for their position particularly strongly, for fear of being laughed out of court. The evidence that our prosperity is based on EU membership is overwhelming. ” O Rourke’s remain case is underwhelming to say the least as he cites the success of Finland in 1991 required to face up to consequences of break up of Soviet Union and Denmark in 19th century to withstand tariff changes. The problem here is we live in a new era of a global economy and switching from beef to dairy will not help us. We do not have a manufacturing base to rely on. Our property market is as dysfunctional as it was before the crash of 2010. Ironically, if our property market had been more successfully cauterised than it has been with bailout and with NAMA, we would be in a better place to deal with Brexit. As it is our economy is extremely fragile.
  2. We could follow Switzerland and leave the EU https://en.wikipedia.org/wiki/Switzerland–European_Union_relations  This would mean “The relations between Switzerland and the European Union (EU) are framed by a series of bilateral treaties whereby the Swiss Confederation has adopted various provisions of European Union law in order to participate in the Union’s single market. All but one (the microstate Liechtenstein) of Switzerland’s neighbouring countries are EU member states.”
  3. We could leave the EU and negotiate a Commonwealth FTA agreement with the UK that would include a 32 county dimension. This would invlove a political solution involving the island of Ireland and a new parliamentary democracy with Dail Eireann replacing Stormont. Legacy historical issues involving relationships between communities in a new Commonwealth of nations, Scotland, Wales, England and Ireland with greater freedoms in each jurisdiction would be a bold enterprise that could strengthen the island of Ireland and provide it with a dynamic future unfettered from the past that has cost Ireland dear.

O Rourke states: “Those who want Ireland to leave the EU know that they are in a small minority, and many will not come out and argue for their position particularly strongly, for fear of being laughed out of court. The evidence that our prosperity is based on EU membership is overwhelming. ”

O Rourke makes many fine points but overall i find his arguments for staying in the EU underwhelming. The EU is heading for greater centralisation and more exclusion of the periphery that will be to our cost. It has already been to our cost in its refusal to burn bondholders and saddle us with the cost of bailout to the dismay of the IMF.

I respect his opinions but take issue with his poorly chosen remarks above. There is a far greater number of Irish people critical of our membership of the EU as evidenced in our previous votes on Treaty matters, than he would lead us to believe.

Critics of our membership of the EU grow by the day. It would be much more helpful for informed debate if views on both sides were respected and derisory tones were left aside to allow evidence to speak for itself.

Evidence mounts by the second we should elevate the position of Irexit to give it the intellectual respect it requires by both our politicians and academia in Ireland. Its largely not debated whatsoever in RTE.

One political canard in this debate that informs debate at the moment is the unstated possibility that NI would leave the UK and join Ireland in a sovereign, united Republic and remain a member of the EU.

Firstly, we are no longer a sovereign nation. Secondly, while the Irish government may not respect the votes of the Irish people on European Treaties, Brexit will happen. NI as part of the UK with the DUP support of Brexit and the present government of the UK; to consider the possibility of NI leaving the UK under Brexit is ludicrous.

But if the proposal gains traction these facts will become immediately apparent.

New European Army !

Swamped by negative feedback from the citizens of Europe back in the ’50s the proposals to build a new pan European army with a new defence pact are back on the table: http://www.express.co.uk/news/uk/877711/Brexit-news-Nigel-Farage-European-Union-Jean-Claude-Juncker-Nick-Clegg-EU-army-video

“At least 20 EU members are expected to sign a new military collaboration pact – known as the Permanent Structured Cooperation (PESCO) – as early as next week.”

In a previous blog I’ve noted ”

Jean Claude Juncker has also suggested that EU member countries should give up their right to veto new tax laws.

https://www.theguardian.com/business/2017/jan/01/jean-claude-juncker-blocked-eu-curbs-on-tax-avoidance-cables-show

With  UK Brexit Ireland will have no friend in the EU to protect its interests as it becomes cocooned under German and French control as a new buffer state between the EU and UK.

The European spider as it has done under bailout will suck this country dry.

Already this country is a pawn in the negotiations exploited by the EU to damage Brexit and the UK.

Our bid to host the 20123 Rugby World Cup was a fail beaten by South Africa of all places https://www.rte.ie/sport/rugby/2017/0925/907332-irelands-rugby-world-cup-2023-bid/

But it is nothing to the failure of this government to chart us through Brexit waters which becomes more apparent by the day.

In general the bill for the mess has been put on the shoulders of taxpayers with the rich able to avoid those taxes and the bill is going to mount considerably.

Legacy issues hold us back:

https://www.independent.ie/irish-news/health/trolley-crisis-more-than-80000-patients-left-on-trolleys-already-this-year-36304516.html

https://plus.google.com/share?url=https://www.rte.ie/radio1/marian-finucane/programmes/2017/1014/912337-marian-finucane-saturday-14-october-2017/?clipid=102630215%23102630215

Problems such as our homelessness and property crisis have been solved before when we were outside the EU. Fiscal rules within the EU prevent us investing in the infrastructure to solve the housing crisis so we increasingly see matters getting worse due to band aid efforts to protect the rich including our own banks.

Professor Drudy has solutions that are withheld from the public and he gets little publicity. But solutions such as his require us to reexamine our relationship with membership of the EU. We urgently need to recognise our need to join Brexit with Irexit to prevent lasting damage to the people of this island north and south.

Professor Drudy Committee on Housing and Homelessness

 

 

 

 

https://en.wikipedia.org/wiki/Switzerland%E2%80%93European_Union_relationshttps://www.economics.ox.ac.uk/materials/working_papers/2828/150-final.pdfhttps://ec.europa.eu/info/departments/taskforce-article-50-negotiations-united-kingdom_enhttps://ec.europa.eu/commission/brexit-negotiations_en#latest

 

till again….

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Abandon Ship!

September 17, 2017

The only hot air in Project EU at the moment providing wind in its sails is the ludicrous notion that the inner core of EU member states should gang together to disenfranchise the PIGS to protect the banks of inner core member states such as those of France and Germany.

They are worried that in the event of a future calamity they may not be able to bully peripheral members of a PIGS alliance into submission as happened in the case of Ireland and Greece.

It’s a Goldman Sachs bankers view of the EU not one based on democracy or the democratic entitlements of the people of the EU. A way to sell the idea is to garnish it up under the camouflage of strengthening European democracy however contradictory this notion is.

Consider the following:

https://www.rte.ie/news/2017/0914/904789-irish-meps-influence/

Irish MEP’s are among the least influential of MEP’s in the European parliament mainly because of the number of left-wing and independents in the Irish contingent.

“The annual survey shows that in a scale of one to five, Irish MEPs are in the second least influential cluster of national delegations in the European Parliament.”

Consider also Jean Claude Juncker’s (President of the European Commission), State of the Union  a  wake up call to those who support Ireland remaining in the EU.

Perhaps this will waken up some blindfolded Irish europhiles. But I doubt it as they are too well taken care of financially and otherwise on their junket trips to the halls of Val Halla in Brussels. Supporters of IRexit take note.

Consider http://europa.eu/rapid/press-release_SPEECH-17-3165_en.htm

https://ec.europa.eu/commission/white-paper-future-europe-reflections-and-scenarios-eu27_en

Also:

https://ec.europa.eu/commission/sites/beta-political/files/white_paper_on_the_future_of_europe_en.pdf

“And we can take credit for having brought public deficits down from 6.6% to 1.6%. This is thanks to an intelligent application of the Stability and Growth Pact. We ask for fiscal discipline but are careful not to kill growth. This is in fact working very well across the Union – despite the criticism.”

With zero interest rates growth has been dismal the only difference being tools to generate growth are disappearing fast while a landslide collapse of stock markets fueled by the drying up of Quantitative Easing yield a future of a European deflationary spiral rather than growth.

But even this growth is illusory a good example being that of Ireland where inflated property properties help the financial sector to pretend the real economy is growing rather than the true picture of paper driven financialisation driving the economy down.

https://www.theguardian.com/world/2016/aug/26/japans-deflationary-spiral-worsens-as-abenomics-falters

Working well? According to Juncker this the Financial and Growth Pact lock on our fiscal space means we cannot tackle our housing crisis by investing the billions it requires to build homes to end homelessness and end the racketeering speculation that is driving the middle class out of property ownership into the hand of rental speculators.

Juncker’s vision for Europe contains some disturbing contradictions.

One is reminded of some quotes from George Orwell:

“All animals are equal, but some animals are more equal than others.”
― George OrwellAnimal Farm

“No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?”
― George OrwellAnimal Farm

Juncker writes:

“…..Now is the time to build a more united, stronger and more democratic Europe for 2025.

“We are now protecting Europe’s external borders more effectively. Over 1,700 officers from the new European Border and Coast Guard are now helping Member States’ 100,000 national border guards patrol in places like Greece, Italy, Bulgaria and Spain. We have common borders but Member States that by geography are the first in line cannot be left alone to protect them. Common borders and common protection must go hand in hand.”

In regard to Brexit the border between NI and the south would appear to be ripe for the injection of a large number of officers from the new European Border and Coast Guard.

Perhaps under pressure from the expense of this undertaking Juncker during Brexit negotiations is hoping the Irish contingent to approach him to fund and supply this border police force.

Such an eventuality of course contradicts the illusory “more democratic Europe for 2025”

I can’t find any proposals for more democracy if you take away the call for more debate on these matters. Its talk without action.

“The future of Europe cannot be decided by decree. It has to be the result of democratic debate and, ultimately, broad consensus.”

Consider the following on the proposed operation and expansion of the European Border and Coast Guard.

Perhaps our depleting security presence of An Garda and defence forces should take note as apparently help is on hand with the imminent arrival European Border and Coast Guard. We will have no need of a state militia to build up our border patrols under Brexit.

“…for the first time since walls
were torn down a generation ago, the recent crises
have led to temporary controls being reintroduced
at certain borders within Europe.

…….Management of
external borders is the primary responsibility of
individual countries, but cooperation is reinforced
thanks to the operational support of the European
Border and Coast Guard. Continuous improvement
to border management is needed to keep up with new
challenges. If this is not done, some countries may
wish to maintain targeted internal controls…”

Clearly Juncker is advocating a stronger and less democratic system of policing and border control one that will replace “targeted internal controls”.

Critics of the EU have long pointed at the insider/outsider distinction between those on the periphery and those countries wielding the most power. Summed up in the PIGS acronym referring to the economies of the Southern European countries of Portugal, Italy, Greece, and Spain and Ireland.

Juncker proposes to solidify this by removing veto rights from periphery members with:

“A group of Member States decides to cooperate much
closer on defence matters, making use of the existing
legal possibilities. This includes a strong common
research and industrial base, joint procurement, more
integrated capabilities and enhanced military readiness
for joint missions abroad.”

Conversely those hoping for a more democratic Europe with greater financial involvement in solutions to national health and housing crises perhaps having an equivalent to CAP(Common Agricultural Policy) with a CHP(Common Health Policy) will be disappointed.

“……..Conversely, the EU27 stops acting or does less in
domains where it is perceived as having more limited
added value, or as being unable to deliver on promises.
This includes areas such as regional development,
public health, or parts of employment and social
policy not directly related to the functioning of the
single market.”

This document was written by bankers for bankers perhaps by Goldman Sachs. Its main interest is security to defend its own interests.

It wants the EU to starve public finances under the ruse of a so-called Fiscal and Growth pact to take power away from democratically elected politicians, remove their powers to control national finances and their obligation to respond to the needs of people for health, education and roofs over their heads. This is written for bankers by bankers.

Its not of the people, for the people, by the people. Think of a small eurogroup in the EU commission handing down what its been told to do by bankers led by Mario Draghi, the ECB and Goldmann Sachs. Think of Mario Barroso former EU commissioner with his contacts taking up the mobile phone on behalf of Goldmann and calling up Juncker!

Reading this document the most Ireland is going to get out of the EU to solve its housing and A&E crisis is the use of the EU’s bathroom here, by way of comic relief:

Jean Claude Juncker has also suggested that EU member countries should give up their right to veto new tax laws.

https://www.theguardian.com/business/2017/jan/01/jean-claude-juncker-blocked-eu-curbs-on-tax-avoidance-cables-show

“The president of the European commission, Jean-Claude Juncker, spent years in his previous role as Luxembourg’s prime minister secretly blocking EU efforts to tackle tax avoidance by multinational corporations, leaked documents reveal.”

Juncker is behind EU proposals for CCCTB Common Consolidated Corporation Tax Base that will involve a large loss in revenue to the government. There is a proposal to tax technology companies and support for a Euro Finance Minister note below (won’t be funding a Common European Health Policy building a health infrastructure for member states).

It’s interesting that Europe’s share of global GDP is in sharp decline. Note EU27 includes UK 4% below so instead of 22% EU26 following Brexit will drop to 18%.

Brexit will provide opportunity for the UK to compete against the EU26 for a bigger global share of trade with the remaining 72% of global GDP.

Its trade will continue with the EU with the EU exposed more to the loss of a surplus trade balance with UK. To explore some of the full facts around this issue see here:

https://fullfact.org/europe/uk-eu-trade/

 

 

 

 

 

 

 

 

 

There is talk of a group of countries working together and agree on a common “Business Law Code” unifying corporate, commercial and related domains of law, helping businesses of all sizes to easily operate across borders. Think of them and us and a lurch to the centre.

There is nothing good in any of this for peripheral countries. Everywhere you look the veto and democratic involvement of peripheral countries is being under current proposals curtailed and reduced. This represents continuing erosion of democracy in Europe.

Embarrassed by growing centralisation with its drift towards totalitarian domination of the periphery europhiles are on the ropes defending the EU with ‘this will not get support’. Yet these proposals are in black and white given as where the EU is aiming to get to.

Banking union is not where EU missiles are aimed. This would put the inner core responsible for bills worked up by the ‘profligate’ periphery. Thinking banking union is on the cards for the EU is simply pie in the sky and nowhere is this mentioned in Juncker’s state of the union speech.

A eurowide insurance system to pay out when economic disaster befalls a member state is far from what inner core members of the EU want. There will not be a FED to bail out the EU’s Nevada.

In the following clip Jean Claude Juncker speaking of the EU, the future, peace. The irony is the flawed design of the euro is contrary to economic growth and political stability.

Note the answer to the question re Barroso and Goldman Sachs asked by the second young interviewer here (following 2016 State of Union speech). There is a need for a 10yr moratorium on members of parliament working for the banking industry.

Perhaps a banking union with transparency and accountability templates can be presented to the EU parliament at some point for discussion, but under present leadership dominated by France and Germany, this is unlikely.

More likely is the spider analogy with the periphery cocooned and prepared by the inner core ready for future consumption.

https://www.ft.com/content/9ca163e3-512f-37e7-866d-9e0774dd

Ireland’s future lies outside the model for EU conceived by Juncker. On Defence, on CCCTB, on diminishing democracy, due to proposals to prevent veto especially on tax matters. On centralisation drift vis a vis European Finance minister there is likely to be more consolidation into authoritarian and cohesive centralisation.

Consider Ireland’s danger to its sovereignty and diminishing status as a sovereign republic. The notion of 32 county unified republic in this EU is an affront to the principles of democracy.

Consider the disastrous trade loss by Ireland’s agri industry on top of the lack of competitiveness for Ireland’s exporters due to a lower sterling.

Our relationship with EU becomes increasingly similar to the relationship between a bank and a property owner with an overhanging default risk.

They want  the money and no way will they allow us any role in running the bank.

Our future lies outside the EU in a new relationship with NI and the UK hopefully with a 32 county NI and republic of Ireland that will future proof economic and social progress not harm progress already made in NI and Southern Ireland.

You need a new vision for that.

Politically on bailout our relationship with EU has been one of hapless indifference and incompetence as we wallow and swallow euro dreams that have long since turned sour.

Time to find a way out before things become a lot worse….but perhaps things have to get a lot worse before this message gets across.

 

…till again

 

 

 

 

 

 

 

 

Varadkar’s Vassals

June 28, 2017

WE NEED TO LEAVE THE EU

In his book, p97  “And The Weak Suffer What They Must” Yanis Varoufakis gives praise to the following rather prescient observation of Margaret Thatcher, a politician he has next to nothing in common with:

“But if I were (playfully considering the notion if she were governor of the European Central Bank), there would be no European Central Bank accountable to no one, least of all to national parliament’s. Because under that central bank there will be no democracy, (and the central bank will be) taking powers from every single parliament and be able to have a single currency and a monetary policy and an interest rate policy that takes away from us all political powers.

Those words have borne true for politicians in Ireland and across Europe. Consider that new phrase ‘Fiscal Space’ that arrived on our shores only a few years ago following a visit from the troika. This means Europe dictates budgetary limits it has set for us, our politicians cannot borrow on behalf of the state to invest in the public housing infrastructure the state requires to combat homelessness.

With Ireland €200 bn in debt, political roles reduced to being the obedient and compliant messengers of European dictats  Ireland’s politicians have struggled to pretend otherwise. They pretend to have the power to end our housing crisis, to build our hospitals to build the infrastructure a growing population requires.

Instead of large-scale municipal housing projects, hapless “Help to Buy Schemes” for first time buyers has had the opposite effect of increasing prices for first time buyers.

Government  encouragement of the private sector to take the lead in increasing public housing stock on the scale required to end homelessness and extortionate rent, has failed. But politicians wishing to pretend they have the power still pretend they can respond to the mandate of the electorate that gave them their vote.

Instead Ireland is run managed by our banks and anonymous unelected officials from the European Central Bank and the European Commission more secretively by Ireland’s Economic Management Committee. Not even the European parliament as a toothless legislator can change that.

Investment in capital infrastructure in education, research and in health is bottoming out to make further burdening of the electorate of the present and the future, look dismal in the extreme.

In such a situation you would imagine that debate on whether it is wise that we should remain in the EU or exit alongside the UK would be worthwhile. but you would be wrong if you did.

We appear to have a severe case of Stockholm syndrome ..” is a condition that causes hostages to develop a psychological alliance with their captors as  survival strategy during captivity”. However this analogy is not completely fair as both our European captors and our politicians appeal to our sense of well-being promising a return to the good days prior to what Lisa Hand described as:

It was like a physical punch in the gut. Outside on Merrion Square, frozen snow glittered on the streets. But it was nothing compared to the icy chill which hung in the air of the press centre in Government Buildings on the desolate night of Sunday, November 28, 2010, as the packed room watched a group of strangers from the IMF, EU and ECB settle into seats just vacated by the Taoiseach and two cabinet ministers.

This Troika was our new government now – unelected, unwanted and absolutely indispensable. Three Kings bearing a bitter gift of €85bn for a broken nation teetering on the edge of the precipice. Thirty pieces of silver in exchange for our hard-won, precious sovereignty.”

http://www.independent.ie/lifestyle/the-week-ireland-gave-up-its-sovereignty-29796376.html

On many levels we inherit an erstwhile disastrous  membership of the EU: political disempowerment above coupled with an unelected an unaccountable European Commission, unconscionable bailout that burdened Ireland with losses that should have been shared by European banks, billions that have been lost through our loss of fishing grounds, the prospect of Brexit causing losses of €5bn annually of agri business and further massive losses as yet unquantified, disastrous and deteriorating public services that presently buckle on the point of serious short fall.

The real problem with the euro is that it doesn’t have a system of circulating surpluses and deficits among member states as exists in the US under the FED. Instead the broken economies or Europe are meant to recover through a system of bailout and austerity in which every penny lost has to be returned from borrower to lender. This puts severe stress on already broken economies such as Greece.

Devaluation for member states as a system of self-regulation is not possible so states already burdened by bailouts are further burdened by austerity.

This is a loop that cannot be broken except by the breakup of the euro. Perhaps this fact alone is at the heart of Brexit many politicians in the UK perhaps having foreknowledge of the imminent breakup of the euro itself.

Negotiations over Brexit not only flag the exit of the UK from the single market the euro represents, but also flag the very survival of a euro severely challenged as it will be by Brexit.

Notwithstanding a budget deficit that is currently under control though weighed down by over €200bn of public and private debt, a serious housing crisis disastrously managed by NAMA (who’ve alarmingly sold off housing stock to the lowest bidder rather than contributing to the supply of housing in a broken residential housing market); Ireland INC finds itself inflated by rising housing prices;  a return to a bubble economy supported by fragile banks facing what could be a greater threat to its economy than the meltdown of 2010, Brexit.

In place of flooding propaganda from both media and political sources denouncing Brexit with an arrogance that grows by the day, there should be an informed debate on whether we too should exit the EU.

The EU does not work anymore. Its unelected and unaccountable  bureaucracy has forced member governments into submission to a euro system that is proving disastrous for member countries leading them down to a path to ruin.

Without economic shock absorbers see below it has failed to deal with the financial losses of meltdown inherited through the 2008 Wall St crash and has sought to recover by a system of bailouts kicking the can into the future rather than healing the wounds that brought periphery nations such as Ireland into economic collapse.

Following 2008 Nevada in the USA went into financial collapse. Though a system of deficits and surpluses administered by the FED surpluses of states were channeled to this deficit state along with measures to rein in its banks and put the state back on sure-footing.

No such system exists in the EU. Instead vast losses were piled on the shoulders of deficit states and their taxpayers burdened with these losses through bailouts growing the gulf between rich surplus nations and deficit nations.

The policy of returning member states to economic growth has failed in Europe. Further centralisation of Europe can only mean less democracy for member states and increasing authoritarianism for member states.

EU  has drifted far from its original aspirations.

As political accountability has lessened the gulf has grown between the disenfranchised poor, the people, and their politically disempowered representatives.

Can things get worse? Sure they can:

https://www.armstrongeconomics.com/markets-by-sector/foreign-exchange/euro/european-commission/

“Once Draghi stops buying government debt, we may see a meltdown in the euro altogether.

The ECB wrote: “It is to be expected that significant developments on both the global and the European level will increase the risks posed by clearing systems.”

ECB is moving financial clearing houses from London to Paris.

Into this vacuum has stepped the far right introducing the nightmare scenario of the rise of extremism growing by the day awakening memories of Germany in the twenties and the consequences of this for democracy. This is engendered by a Europe run by a faceless bureaucracy, a European Commission that is held unaccountable to political movement by the people, a toothless European parliament that cannot legislate for the people.

Meanwhile 2 more banks in Italy have failed “Two more Italian banks failed over the weekend– Banco Popolare di Vicenza and Veneto Banca.Banks in Italy”. It will take €17bn of taxpayers money to bail them out.

This will come close to emptying the pockets of taxpayers but the story only begins here and offside hidden in the wings are a vast number of other banks in Italy struggling under the financial losses hidden away since the 2008 financial collapse tsunami that swept across Europe in 2010 until now.

Next move will be to raid depositors money with bail in as happened in Cyprus.

Varadkar’s  statement that his door is always open to the UK to talk not of Ireland also exiting with Brexit but of UK remaining in the EU shows a  contempt for the will of the British electorate who’ve voted Brexit.

Ireland does not think twice of holding referendum after referendum until the people are lied to enough to ensure their compliance with the will of compliant and obedient politicians.

I’m sure his door is always open is persuaded by his failure to attract any interest from NI politicians in Irish government calls for a United Ireland while remaining in Europe. Surely one of Fine Gael’s greatest political conceits.

Arlene Foster has just done a billion sterling deal with the Tories in the UK in return for minority support of Tory government. Her DUP party campaigned in favour of Brexit.

It will be interesting to see how much of this money will go towards the provisioning of border controls between NI and southern Ireland when Brexit comes about. For sure this money is meant to cushion and shock absorb NI from the effects of Brexit especially in its relationship to Southern Ireland.

Interestingly no similar commitment has been forthcoming from the European Commission as a buffer support of southern Ireland. Nor have Irish politicians been engaged in any public lobbying of the European Commission other than the acknowledgement of the empty acknowledgement Ireland is a special case!

In regard to the provision of housing, health and education we have to question whether democracy in Ireland exists anymore.

See this def:

” :  government by the people; especially :  rule of the majority 

:  a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections

Varadkar’s government’s failure to make good their promise to build social housing only 10% of which were built last year from a ridiculously low base shows political impotence.

Varadkar is wedded to further erosion of democracy and would not think twice of re-running any Irish referendum if it didn’t suit his preferred outcome. This is implied in his door open statement.

Varadkar’s future for Ireland is a Vassal Irish state with powerless politicians paid exorbitantly to groom Irish voters to accept all medicine from Europe as it plunges Ireland into deepening austerity.

The future of such politicians comes with the tantalising opportunity to progress to political positions in any number of the vast network of Brussels based European institutions who run our lives without accountability or democratic input.

The forces ranged against rational debate of an Ireland IExit proposition in support of Brexit are extensive and wide-ranging. Interest groups against Brexit range from politicians to public servants, to farmers, to the financial sector, all of whom are beneficiaries of the current status quo inside the EU.

Government budgetary considerations trundle along on receipts from a ruinous property sector, Corporation tax receipts that can collapse at a moments  notice under adverse pressures from Donald Trump to Donald Tusk, President of the European Council.

Not leaving out the security costs of a hard Brexit border and the extra tariffs charged against our exports to the UK under Brexit. Perhaps large-scale emigration endured over previous years will return to take pressure off our public services.

We should be talking to the European Commission on the question of monetary flows from the European Central Bank into Ireland from surplus EU members to help us shock absorb Brexit. We’re not.

The fact that instead the European Commission, as it did for our bailout forced us to take it on the chin for Europe without its support on burden sharing, will leave this country to fend for itself under Brexit, should be sufficient reason for our politicians to want out of the EU.

We do indeed exist in a financial bubble many on this island benefit from. Many wish this party to continue. Storm clouds are gathering however and all bubbles are easily burst. Looks like Ireland could be one of those bubbles that Brexit bursts first.

This will happen in spite of Varadkar’s vassals putting their heads in the sand and hoping for a good outcome for Ireland under Brexit.

This will happen in spite of efforts by Mario Draghi, President of the ECB or Donald Tusk President of the European Council cementing the relationship of the European Commission and Ireland by perhaps making Enda Kenny our ex Taoiseach Tusk’s successor while embarrassingly our state crumbles under the effects of Brexit.

On such an imaginative digression, I thank you for reading the above.

 

till again

 

http://www.telegraph.co.uk/news/2017/06/26/arlene-foster-meet-theresa-may-finalise-dup-deal-prop-tory-minority/

https://www.merriam-webster.com/dictionary/democracy

Eating Their Young

November 27, 2016

During the week we heard rejoicing on the airwaves http://www.thejournal.ie/central-bank-mortgage-rules-2-3095784-Nov2016/

“It was announced this afternoon that a first-time buyer will now only need a deposit worth 10% of a property, regardless of its price. However, the 20% deposit rule will continue to apply to second-time and subsequent buyers.housing-crisis-cartoon2-598x480

The 3.5 times ceiling on the loan to income (LTI) ratio remains. Requirements for buy to let borrowers and the exemptions for negative equity mortgage borrowers from the measures also remain unchanged.”

Rejoicing continued with claims that the above rule would stimulate the construction sector to build more new builds thus rapidly dealing with the homelessness crisis.

Nothing could be further from the truth. The truth is housing has become unaffordable for the average industrial wage and is quickly getting beyond the reach of young people in high paying jobs.

Provision for a large municipal building programme that will end the crisis has been avoided at all costs.

Instead media is filled with images of smiling Enda proclaiming a dynamic, progressive and wealthy economy with a solution to the housing crisis brought about by Simon Coveney. No solution and Kenny will disappear from the stage some say the sooner the better.

Teachers went on strike to protect young workers in their profession forced to take a large cut in their wages in spite of rising rents and property costs. Hospitals are at their wit’s end with numbers on hospital trolleys about to reach all time records if winter flu hits see statistics here http://health.gov.ie/statistics/ Our rivers are polluted with drinking water requiring massive investment http://www.epa.ie/water/wm/rivers/results/

There is massive propaganda in the media with attempts to manage public sector pay increases expected by the unions in the wake of Ireland  seeing  its return to prosperity. Most do not see this. Widespread efforts to smother increases in public sector pay follow along the lines of warnings that our continued prosperity is on a knife-edge and such demands could lead our economy to collapse again.

The implied accusation is that public sector pay increases led to our economic collapse in the first place not wanton speculation in the property market promoted by the 1% of speculators and banks abetted by government who stoked the property market to line their pockets at the expense of workers.

The ridiculous black is white mantra that increasing house prices would encourage builders to build more houses will soon be seen to be the deception it is. Developers and bankers will not build and lend into projects priced beyond what the market can afford to pay.

It’s possible our politicians are so deceived they themselves are the greatest victims of their own delusions. There is no fungible relationship between Simon Coveney’s basket of intents and policies to bring about the construction of the numbers of houses and the real world.

The real world is very simple though to have any insight into its true nature will bring a response that such views are facile, fatuous, facetious and fail to grasp the complexity and scale of the problems of the real world. Bernie Madoff used such arguments to scoff at his critics before he was sent to prison.

Construction of public housing needs to be done on a vast scale on a Municipal basis. The price of housing needs to be severely brought lower not higher vis-a-vis Simon Coveney’s policies.

This is not happening because a small dictatorial elite of FG/FF headed by the smiling wannabe dictator Enda Kenny continue to fan the flames of prosperity for the 1% against the 99%.

They do not want house prices to fall.

Present relaxation of rules will fan property crises in the attempt to continue the bubble they fear will pop because not enough young first time buyers can afford to raise the finance for Madoff property pyramid schemes.

They want rich investors in Irish property many of whom are TD’s with large rental property portfolio investments or vulture funds pricing out Irish buyers continue to make large profits from artificially induced shortages.

For them the agenda is to manipulate the media and public opinion to the view what is best for the banks and the 1% is best for all.

It isn’t.

 

till again…..

 

 

Pariah Apple Pie

September 1, 2016

cartoon-business-man-being-hit-with-extra-taxes-and-carrying-a-money-bag-by-ron-leishman-1322Just listened to Tim Cook, Apple CEO, on Morning Ireland state: while he is in favour of changing and simplifying the tax laws, any retroactive finding against Apple’s tax affairs is politically motivated and unfair.

We’ll look at European Competition Rules shortly to agree or not both Ireland and Apple were in breach of the ruling to provide illegal state aid to Apple by way of a sweet tax deal.

Firstly, by way of an intro lets put away the frequent political canard that FDI investment in Ireland is volatile and at the first whiff of danger Apple and its fellow MNC’s will flee our shores.

We have a relatively stable political climate in Ireland. The island itself is easily defended and safer from foreign terrorists than other countries in Europe. Our climate is cool, conducive to the setup and maintenance of large data centres.

Most MNC’s have worldwide exports and we have airlines. Our population is relatively well-educated though on its present course it is falling behind. Relations between Ireland and parent MNC countries is good.

But Tim Cooke knows the cat is out of the bag. Ireland through its IFSC services has been operating as a tax haven for years offering off the shelf deals with a nod and wink to Enterprise Ireland and FDI has flooded to Ireland to avail of these tax breaks.

Such tax breaks are morally corrupt and illegal and represent unfair advantage given to companies operating in Ireland such as Apple.

I will not delve into but instead point out there is a need to examine the constitutionality of the tax laws that operate in this state Provisional Collection of Taxes Act 1927 (‘the 1927 Act’) and the Irish Constitution. For example. the following paper:

http://www.taxandlegal.ie/ITRSept2009.pdf examines the legality of retrospective collection of taxes eg property taxes.

Be that as it may the sweet deal provided to Apple and how it fundamentally assists in the avoidance of fair taxes locally and for example in MNC parent countries eg USA needs examination as to whether such practices a=) contravene the rights to fair collection of taxes of the Irish people  as set out in the Irish Constitution b=) contravene the constitutional rights of other taxpayers in other jurisdictions.

This matter has wider implications than those raised by European Competition Authority rules. We are considering here no taxes for the 1% and taxes for the 99%.

The great edifice of international tax rules has been carefully scaffolded  through armies of lobbyists and legal eagles to carefully construct non-payment of taxes by MNC’s.

This scaffolding has been built and funded mainly by those seeking unfair advantage and profitable benefit for the financial interests  they represent. This does not include the interests of taxpayers.

Readers of this blog will know my position supporting IRexit in support of Brexit( see last blog ) and I fundamentally disagree with the Orwellian powers given to TFEU the Treaty on the Functioning of the Union eg:

“Article 3 1.The Union shall have exclusive competence in the following areas:

(a) customs union;

(b) the establishing of the competition rules necessary for the functioning of the internal market;

(c) monetary policy for the Member States whose currency is the euro;

(d) the conservation of marine biological resources under the common fisheries policy;

(e) common commercial policy”

http://ec.europa.eu/competition/antitrust/legislation/handbook_vol_1_en.pdf

Realising how little our politicians know about managing our finances under such rules perhaps aided by our so-called economic management committee excluding such matters from both political and public perusal  it comes as no surprise politicians deliberating on our response to findings against Ireland and Apple should want to defer decision until this coming Friday to give themselves time to inform themselves.

It’s surprising Michael Noonan should wish to squander public money in appealing this long deferred ruling by the European Commission against Ireland. Its surprising compared to the paralysed silence of Irish politicians in objecting to the odious terms of our financial bailout. The IMF had more objection to the terms of our bailout than local politicians. Its surprising given the support of the Irish government for Europe.

But then considering the incompetence involved in such an ill judged decision its of no surprise. The decision will consolidate Ireland’s reputation an an international tax haven pariah.

So I could take the view this is just another example of Michael Noonan’s compliant and obedient servility to the rules of gross incompetent obedience to demands made by shadowy financial sector powers in handling our financial affairs.

On the other hand, I might take the view that the Irish government is slowly waking up to the fact that it is in the belly of a boa constrictor when it comes to Europe. Noonan’s ardour for Europe is dampening somewhat.

See article 3.1.

  1. Europe is flexing its muscle establishing it alone has the right to establish european wide competition rules.
  2. Europe can dictate Ireland’s monetary policy.
  3. Conservation of marine resources…we know what we’ve lost there
  4. Common commercial policy (do the bidding of the large group of financial lobbyists that control the EU)

Basically the sooner Minister Noonan goes the better. His bailout negotiations were a dismal failure culminating in usurious and uxorious repayment terms to Ireland. Only mitigated when it was noticed terms given to Ireland were a lot worse than those negotiated with Portugal and Greece.

Now with the latest Apple debacle he wants to challenge using taxpayers money the finding of approx €13bn underpayment in tax to Ireland in a sweetheart deal that fleeces taxpayers across the world.

http://europa.eu/rapid/press-release_IP-16-2923_en.htm

Mr Noonan instead of bowing to the inevitable is bowing to the dictates of an international tax pariah system fleecing taxpayers across the world, of which he has made the Irish government a lynchpin and tax haven cog.

He has made this country look ridiculous and ludicrous in his efforts to return a potential windfall of €19bn to Apple.

Think of this. Given the level of control of our economy in 3.1 above do we need our large Dáil with all its deputies and the cost of their pensions and salaries with powers given to them that are but toothless window dressing?

We’ve had enough of fiscal rules eg extortionate bailout;  Irish Water served up with homelessness;  extortionate rent serfdom to our young people.

Now the new mission of safe return of €19bn of Irish tax payers money to Apple?

Please support IRexit.

 

Postscript

The Dáil is due to debate the Commission ruling on Apple today 07.09.16. A defence bulwark in support of appealing the decision is the claim that the Revenue deal on Apple was not selective, other companies could avail of this.

Lets leave aside the investigation if this was/is true for other companies operating in Ireland, surely the whole point of the Commission ruling from a competition perspective is that inter alia Ireland being a member of the EU with EU law taking precedent over Ireland’s laws, we are in breach of European Competition rules that affect taxation policy.

It’s ludicrous to propose as a defence the right of Ireland as a sovereign nation to invite companies such as Apple into Ireland with sweetheart deals that put other European nations at a competitive disadvantage.

Over here, over here, don’t waste your tax dollars in other European countries we can recycle your profits so you pay no taxes due anywhere!! If the government doesn’t like these rules it needs to leave the EU and support IRexit as I do.

Otherwise, stop wasting Irish tax revenues on a Fool’s errand that will make us the laughing stock of the world, put us in direct conflict with a ruling supported by 28 EU commissioners and the EU itself. Its asking that we get rubber stamped as a tax haven, a Corporation Tax Global Recycling dump,  to help MNC’s  avoid fair taxes owed to the taxpayers of the world who need healthcare and education politicians are failing to provide.

 

till again

Ireland was the only member state to hold referendums on The Treaty eventually passed as Treaty of Lisbon in October 2009. Already post Brexit there are calls for greater political union in Europe I’m guessing aimed at removal of Article 50 removing the means for member states to withdraw:

http://www.cnbc.com/2016/06/28/the-brexit-and-article-50-cnbc-explains.html

https://en.wikipedia.org/wiki/Twenty-eighth_Amendment_of_the_Constitution_of_Ireland

Given the appalling way Ireland was saddled with no debt write down or debt sharing of Ireland’s bill for financial collapse carrying 42% of European financial losses that otherwise would have been carried by German and French banks the case for putting a referendum on membership of the EU has become compelling.

Added to the losses Ireland will incur through Brexit and added to the negative stance within Europe to Ireland’s corporation tax and arguments below, the Irish deserve a referendum to vote on their future within the future imposed on them by membership of the EU.

Ireland should also have a democratic say in any negotiations between the EU and the UK on Ireland’s future relationship re trade and borders. This is another compelling reason for providing a referendum on IREXIT.

Sinister intervention in Ireland by the European Commission on Water Charges forcing them upon the Irish electorate in spite of their declared wishes is an example of an erosion of democratic control of Irish affairs by unelected bureaucrats in the EU.

It’s not precisely the directive to have a certain water policy that galls but the audacious intervention in Irish sovereign taxation affairs that directs us to have separate water charges with a private, commercial monopoly running it.

How we raise the money through taxation should be a matter for Ireland alone. Water charges per se should not be part of the remit of the EU.

There is also the fear of undue influence by private commercial interests in the affairs of the EU wishing to dismantle public services to allow private commercial interests to loot public services for commercial gain.

This is not what membership of the EU was meant to be.

That the Irish derogation for water charges no longer applies is a result of Minister for the Environment  Alan Kelly’s refusal to ask for a derogation:

“In accordance with Article 9.4 of the Water Framework Directive our exemption is embedded in the 2008 River Basin Management Plan. Any renewal or cancellation of the exemption is done in the next 7 year RBMP. And it is the Minister for the Environment who assembles and submits this plan.

This 2015 River Basin Management Plan is due on be handed into Brussels by New Years Day. Both the Irish government and the European Commission are expecting that Minister Kelly will not renew the exemption and will instead include domestic water charging as part of Ireland’s strategy.”

Kelly built no houses for the homeless and gave away our water to private, commercial interests. Enough said of compliance, obedience and incompetence as certain politicians hand over national assets without thought for our national interests or the good of the people.

Meanwhile Enda Kenny is back from his trip to the UK where he successfully alienated the full Brexit movement’s future government by his interference in UK sovereign affairs.

How come Kenny was not asked to walk the plank after his election results is another question. A weak, Irish zombie government of those rejected at the ballot box is not helping in these turbulent times.

He was quoted by one remain politician in the Johnathan Dimbleby “Great Debate” that Kenny said border controls would have to be introduced if Brexit won as if the Irish government would insist on them. Fearful images of Armageddon, barbed wire and Berlin Walls were part of his politics of fear.

Only the most limited if any border controls should be introduced.

 

EU Say Ireland’s Domestic Water Charge Exemption Is Safe, Unless Alan Kelly Gives It Away On January 1st

Update: http://www.irishtimes.com/news/politics/eu-to-ireland-you-cannot-go-back-on-water-charges-1.2701502

Can you figure out how Scotland reconciles its wishes for independence with membership of the EU. They already have more independence and will have more independence in their relationship with the UK than they would ever get disappearing down the rabbit hole of the EU.

This blog celebrates the restoration of the democratic wishes of the British people that have arguably saved democracy itself from extinction. Congratulations to all Brexit campaigners who fought so well against so overwhelming odds.

Congrats to the UK on managing to drop the value of sterling. This will have a very positive effect on exports and reduce imports and should yield a healthy balance of payments result for the UK.

https://en.wikipedia.org/wiki/Black_swan_theory

“The theory was developed by Nassim Nicholas Taleb to explain:

  1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
  2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
  3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.”

While this blog campaigned virtually alone in Ireland for Brexit, pollsters and pundits and politicians got it wrong.

Not foreseeing the consequence of Brexit many in the Brexit camp have experienced a state of Black Swan paralysis and currently flounder in limbo unable to navigate a future path to address the issues Brexit has posed. At least that’s what Minister Noonan would have you believe disdainfully scorning Brexit campaigners for lack of future planning.

Not so. The description however does appear to describe well the remains of Noonan’s position on these matters.

Welcoming the positive affirmation of democracy that is in Brexit this blog will address these issues and point a way forward at least on 2 fronts.

Firstly, the UK will go through a process of disengagement with the EU while at the same time arrogating to itself responsibilities in areas previously controlled by the EU. This will require institutional changes and the inception and setting up within UK of parallel lines of responsibility within its own institutions of government and this may take some time to set in place.

It will have to renegotiate its fishery policy with the EU insisting that its borders be respected.

Independent self-government managing its own affairs responding to its own needs and mindful of the needs of the world at large is well within the remit and capabilities of the British people and its representative parliamentary democracy.

The UK needs time to apply its creative energies to this task.

Secondly, given the sad outcome of 2 great performances by both the northern and southern Irish soccer teams at European level our thoughts should wonder at what could be achieved by one single Irish team.

With Brexit our thoughts should be with joining northern Ireland as a single commonwealth entity with equal if not more independent stance than currently enjoyed by both Wales and Scotland. For this we need IRexit.

The sad state of political leadership in southern Ireland is missing the brilliant contribution that could be made by outstanding politicians such as Sammy Wilson or Teresa Villiers in the north.

Southern Ireland cannot afford to be a member of a failing EU with its largest trading partner and neighbour outside the EU; this combined with the fact our island of common interest is split in two. This could be an opportunity of ending “never the twain can meet”.

The second front upon which changes need to be made should be focused on the EU rather than the UK or Ireland.

Consider the following on the EU commission:

“The Commission remains politically answerable to Parliament, which has the power to dismiss it by adopting a motion of censure. The Commission attends all the sessions of Parliament, where it must clarify and justify its policies. It also replies regularly to written and oral questions posed by Members of Parliament.”(1)

It is noted here that a session of the European parliament is due to be convened to discuss all issues relating to Brexit.

This is much overdue following the emergence from the shadows of Angela Merkel announcing a summit of leaders including only France and Italy following Brexit. Leadership by proxy of Europe by Angela Merkel has emerged more and more into visible light since the financial collapse of southern, peripheral European states such as Greece, Portugal and also Ireland.

To observers such as yours truly this only adds to the belief that the EU is government by proxy of Europe by Germany. The implication for dodgy banks in Germany, France and especially Italy with debt to GDP hovering at 120% must have been high on the list of concerns.

Members of the European parliament apart from ex member Nigel Farage are generally a disenfrancised lot with no powers other than to rubber stamp what unelected and mysteriously lobbied and influenced members of the EU Commission allow them to rubber stamp.

But here is an opportunity for the members of the European parliament to censure the mishandling of Brexit by the commission and dismiss the EU commission.

Not a likely scenario but one I advocate. A more likely scenario is the highly paid MEP’s will churlishly say little if nothing and do less.

The European Commission has been woefully remiss in its treatment of David Cameron in its refusal to allow independent derogation for  UK comply with  massively deficient policies on emigration.

The EU commission has woefully mishandled the refugee crisis. It has been compromised by Germany’s go-it-alone policy.

It has allowed geopolitical concerns particularly in the alliance of inner core members such as Germany, France and Italy to exert undemocratic control over the now compromised independence of the European parliament.

It has sat by and allowed the banks of Germany and France to dictate undemocratic terms to the people of Greece.

It has allowed itself to be the pawn of external forces that have lobbied and compromised its independence challenging its role as a policy maker in Europe.

It has failed to shape policies to rebalance Europe and instead has sharpened the divide between northern and southern Europe.

It has had no effect on independent European monetary policy that instead through the European Central Bank followed a go-it-alone policy arguably in favour of monetary policies promoted by Germany looting peripheral members of the EMU.

“New EU rules on economic and financial governance help to Union resources clean up and strengthen the banking sector.”(1)

These rules show how compromised the European Commission is with lobby groups and so-called experts from the banking sector, Goldman Sach’s, Morgan Stanley, influencing and setting policy: those meant to be the subject of regulation choosing their own regulations.

The EU commission has become a toxic brake on European progress and become the pawn of shadowy lobby groups.

The EU commission is not an elected and democratic body but is instead leading member states along the path of totalitarian policies reminiscent of the previous USSR.

Dismissal of the EU commission pending its reform should be high on the agenda of next meeting of the European parliament. This is not likely to happen with even less likelihood of reform that will challenge special interest groups.

A little word on how the European Commission and the ECB have failed to help us in solving our housing crisis. Instead the following scenario is being played out across Europe in countries such as Ireland.

“The financial raiding of the American middle class is moving full steam ahead.  The ridiculous structure of the banking bailouts and artificially low-interest rates caused hot money from banks and big investors to crowd out regular families in the housing market.  Now here we are 7 years after the official conclusion of the Great Recession and regular American families are financially struggling while banks and big investors thrive.  Today 11 million Americans spend half of their income on rent.  Another 21.3 million spent over 30 percent of their income on rent.  With millions of properties being bought by investors since the Great Recession hit, all that has happened is a mega transfer of wealth.  You don’t build equity by renting but many people are simply priced out from buying a home.”(3)

In Ireland the European Commission has done nothing to support Ireland’s growing housing crisis.

It silently supports massive Quantitative Easing QE by the European Central Bank which has led to depreciation of the euro against other currencies.

With negative interest rates this has contributed to a global currency crisis increasingly pillaging the assets of savers and public services though austerity.

It has turned a blind eye to the odious terms imposed on Greece for its bailout while silently supporting the Highest EU debts as a proportion of GDP (2014 Q4)(4) debt levels of Greece, Italy, Portugal, Ireland, Cyprus and Belgium. Italy at 120% debt to GDP of particular interest.European-Debt-to-GDP-Ratios-Oct-2013

 

EU commission needs to be dismissed.

Its management of monetary matters left to the ECB is a failure and its consequences grow more toxic by the day.

 

 

A monetary backdrop to the work of the EU commission is a global fiat currency inflated to kingdom come by the Central Banks through Quantitative Easing.

A return to a gold standard or a similar bitcoin related inter currency standard to stabilise markets and give rise to fair savings and investment in R&D is required.

This is outside the remit of the European Commission and beyond the means of the ECB but its policies favour the maintenance and continuance of this failing currency system.

In a casino driven financial economy that is a bar to further human progress with the European Commission fronting a European banking system that has become the bad bank of Wall Street and the Federal Reserve;  austerity imposed on the people of Europe ;  funding the rich 1% with further giveaways through Draghi’s Quantitative Easing, its time the EU itself considered its future with debt levels described by above graph.

But it would appear through lobby groups and shadowy interests pulling the strings of the EU commission both in the case of banking regulations and the above Irish Water debacle, that the EU itself is fixed upon the path of maintaining the current system of looting and pillaging the middle classes.

The concept of private ownership ownership itself as it was in the USSR may become a distant memory for those who remain in the EU…

Congrats to Brexit saving democracy itself from extinction under the above.

 

    1. How EU Works:  https://eeas.europa.eu/delegations/singapore/documents/more_info/eu_publications/how_the_european_union_works_en.pdf
    2. http://www.bloomberg.com/news/videos/2016-06-27/alan-greenspan-u-k-brexit-a-terrible-mistake
    3. http://www.mybudget360.com/share-of-income-spent-on-rent-at-record-high-11-million-spend-half-income-on-rent/
    4. http://www.telegraph.co.uk/news/worldnews/europe/greece/11705720/European-debt-crisis-Its-not-just-Greece-thats-drowning-in-debt.html

 

 

till again…

This blog has argued that the Irish Central Bank with its policies underwritten by the ECB has been the single most cause of our housing and homelessness crisis. Shortages have been engineered by the Central Bank to prop up property prices and to ensure repayments of mortgages without the added burden of negative equity.
vulture_funds__fiestoforo

To prop up this bubble in housing and property, loan to value relationships that includes extortionate rent rates, rich property developer stakeholders with large investment portfolios are assured of a good return, their repayments on their own outstanding loans, made ‘safer’. 

The consequence of this policy is that the young cannot afford housing as they are forced to pay Sheriff of Nottingham rents. 

In an interesting contribution to this debate, Master of the High Court Edmund Honahan, has entered the fray. Tackling Alan Kelly’s misinformed and ill-judged view that the constitutional protection provided for property ownership is the leading cause of our crisis of homelessness.

Kelly’s views on this matter lay bare the lack of intellectual probity and competence available to Irish citizens at the political level in dealing with our crisis.

Our constitution on this matter does not require change. It is clear and well worded and provides adequate safety measures to ensure the public good should not be compromised in favour of private interests.

 

“2 1° The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.

 

2° The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”

 

Honahan suggests the state act to acquire large property portfolios now in private hands:
“If the owners of these refuse to sell, acquisition can be by compulsory purchase with full compensation assessed by an arbitrator”.

Honahan does not visit  the scandal of NAMA selling Irish housing stock at knock down prices to vulture funds at a vast cost to the Irish taxpayer; the further cost being the hidden tax/high rents these vulture funds can impose on the market place.

Part 11

Also argued on this blog is the view Ireland should strongly entertain leaving the EU along with Brexit on a journey to create a fairer national and global economy, ending homelessness and the usury of financialisation that is becoming increasingly toxic as it brings us closer to global market collapse.

Without reform of the global financial system, war and the current refugee crisis in Europe and further turmoil in Africa are all inevitable. The euro is contributing to this crisis as it follows the path of support for austerity rather than reining in the profligate markets that favour the 1%.

In Europe a Scandinavian and UK commitment to a trade agreement, with its own members acting with the EU as partner, alongside reform of the financial system, at its best is a better trade-off than the imminent possibility and consequence of global financial collapse. Brexit should lead to such new trade agreements and partnerships.

Meanwhile in Ireland repercussions of our own bailout and its repayment burden with Ireland the second most indebted country in the world are felt everywhere. It is leading to farcical economics.

Credit unions have offered up to €8bn to invest in social housing. Captured by financial interests and increasingly stripped of its power to act, the Oireachtas currently unable to form a government, has become at odds with the needs of Irish people sold out to financial interests.

Investment in social housing is seen to be at odds with the for profit vulture funds and the banking requirements of our creditors.

The credit unions have been ignored. Nothing is being built.

No action on above, no action on investment of our pension funds, other than to pillage to spend on the propping up of a failed Irish bailout. There is a frozen lack of ideas and even less action from politicians only concerned with their pension rights and salaries protected against the cuts in salaries faced by young teachers and young gardai.

There is no cross party support for a large investment programme as provided by other Irish governments in the earlier part of this century.

Perhaps too many members of the Oireachtas wealthy on the result of their property investments, do not wish to compromise same.

Part 111

Today young people earn less than their parents with prospect of inferior standard of living going forward while living expenses have skyrocketed. Young teachers, gardai and a huge range of public servants have little to no chance of owning a home in their lifetime.

Property has been acquired by the financial sector as a new speculative arm with ever more complicated arrangements ballooning debt and selling it as lure to trap the unwary.

Risky mortgages based on rising property prices were the keystone of a new speculative gamblers economy offering risky assets with prospect of fantastic returns to investors large and small including home owners.

It was an Enron scam. Those in early spread the word, those in last paid the piper of financial collapse, negative equity.

A fairer system of global taxation ending the casino manipulation and corruption inside the global financial system, is a long due reform of 1% interests outweighing those of the 99%.

In Ireland recent years have led to the current political stalemate consequent on support of the 1%.

The policy that ensure the 1% exploit the 99% is a policy fed by central bank manipulation globally; both in Europe and in Ireland it is a policy that is bound to fail.

Not only are the 1% fuelled by bailout but according to Sunday Business, March 27 “Elite syndicate in Revenue deal for ‘aggressive’ tax avoidance’. Revenue will not publish their names as part of a deal to make them pay up. Ireland’s 1% get special tax avoidance favours too.

This is the tip of the iceberg.

“Mossack Fonseca is not a household name, but the Panamanian law firm has long been well-known to the global financial and political elite, and thanks to a massive 2.6 terabyte leak of its confidential papers to the International Consortium of Investigative Journalists it’s about to become much better known. A huge team of hundreds of journalists is poring over the documents they are calling the Panama Papers.

The firm’s operations are diverse and international in scope, but they originate in a single speciality — helping foreigners set up Panamanian shell companies to hold financial assets while obscuring the identities of their real owners. Since its founding in 1977, it’s expanded its interests outside of Panama to include over 40 offices worldwide, helping a global client base to work with shell companies not just in Panama but also the Bahamas, the British Virgin Islands, and other notorious tax havens around the world.”(2)

Hopefully names will be published and unlike our Revenue Commissioners, journalists will reveal all.

Lastly, on a wider note, Greece has not gone away. On a wikileaks analysis Paul Mason has speculated the IMF is contemplating a credit event for Greece this coming July around the time of Brexit when the IMF may walk away from a restructuring of the circa €300bn of debt held by the ECB on Greece. See 4.

 

till again

 

 

 

  1. https://en.wikipedia.org/wiki/Deregulation
  2. http://www.vox.com/2016/4/3/11356326/panama-papers
  3. https://www.constitution.ie/Documents/Bhunreacht_na_hEireann_web.pdf (Article 43)
  4. https://medium.com/mosquito-ridge/imf-plots-new-credit-event-for-greece-534b4b300318#.f7gyaaw58

 

 

 

 

 

Ireland’s Big Lie

March 20, 2016

Many in Ireland are calling for government intervention in the housing and homelessness crisis. More social and private housing needs to be built to end waiting lists. Some argue the crisis will get a lot worse with upwards of 70000 in danger of losing their homes as vulture funds up their rents further while they continue their profiteering rampage.

Tunnel of Love/Lover's Leap.

Tunnel of Love/Lover’s Leap.

The Construction Federation of Ireland have said(1):

“The market price of many homes throughout the country is still well below the all-in construction cost. In a report commissioned by the IHBA from Walsh Associates, Construction Cost Consultants in 2014, the construction cost of a 3 bedroomed semi-detached house of 110 sqm is calculated at €225,961, in addition to site costs plus VAT at 13.5%.  According to the Daft House Price Report 2015 published today, the average asking price for houses in Carlow is €140,536, in Offaly it’s €138,247, while in Westmeath the average asking price is €145,804. Clearly, as long as sales prices for these houses are below replacement cost, the market will not support significant increases in the construction of new homes. As long as this situation prevails, little to no new housing will be built in these areas.

“The IHBA agrees that more housing is needed to meet the national demand.  However it is up to all stakeholders including government, banking, regulatory and development sectors to ensure that a viable construction environment is supported to ensure that this critical objective can be achieved.”

(2)”The Irish League of Credit Unions has offered the Government a €5 billion fund, which could be kept off the State’s official borrowing figures, to build thousands of homes over the next six years.

The league, which represents 437 credit unions and has savings in excess of €11 billion and total assets of more than €13 billion, has told the Government it currently has “surplus” funds of up to €8 billion.”

Stakeholders are asking that government take the reins and join the dots to lead and to create a much-needed housing programme to end the current crisis.

Yet the offer from the credit unions has been with government since last October with little or no response. Neither have Fine Gael Labour in their election manifestos warmed to the advance of the credit unions with election commitments to invest.

Each RTE programme, each media item on homelessness dwells on the thorny subject of last of investment, lack of planning, too great a government tax take while blame is handed from one agency to the other with no one seeing the wood from the trees.

Thus a large cover up has grown covering up the real cause of  our homelessness and housing crisis.

The real cause of our housing and homelessness crisis lies at the door of government compliance and obedience to the dictates of the Irish Central Bank. In fact, so great is the coverup that it has morphed into the biggest LIE perpetuated against the Irish people since the emergence of our state in 1916.

This LIE feeds upon and perpetuates complexity where none exists, it apportions blame elsewhere, it lies in the background concealed behind economic home truths that shame both Irish politicians and the people they represent. When Ireland was poor, vast housing estates on the periphery of Dublin city were built. Even in poverty, people had a place to live and affordable accommodation. Shamefully thousands of families are about to experience emergency accommodation unsuitable for families especially children.

Clearly credit unions have the money to invest over and above their reserve requirements see page 80 (3) However, the billions in assets of credit unions exist on deposit in major Irish banks and as deposits they are part of the reserve requirements or Irish banks under the umbrella of the Irish Central Bank.

Deposits of Irish Credit unions are being used to shore up a system of lack of investment in Irish property. There is no appetite in government to use these deposits to threaten an Irish banking loan book dependent on high prices and anathema to the ideals of affordable housing/social housing.

Furthermore, investment in the building of affordable housing in Ireland will compromise the investment liquidity of vulture funds in Ireland perhaps encouraging a quicker turnover of these assets and a fire sale.

The fragile nature of the mortgage sector in Ireland with billions in outstanding loans in negative equity means banks cannot afford a drop in prices causing further negative equity and a large threat to their outstanding loan book.

Many are against a large scale building programme as this may eat into their potential profits. Deposits of the credit unions are there to shore up the banks and will not be allowed freedom to invest in aspects of the Irish economy requiring sovereign investment.

Guarding against this will be the task of a puppet government tasked with defending the 1% against the 99%.

In this scenario of ‘fragile recovery’ its easier for the Irish Central Bank to lie and point to other reasons for the Irish homelessness crisis, to sing as Rome burns.

On the above count alone, there is reason to renegotiate our loan book with the ECB and look to an Irish exit from the EU along with Brexit.

At least this would give our children and next generation a home to live in. Or not be saddled with 40% of the euro cost of the financial crisis to European banks.

Clearly the Irish Central Bank ICB has neither the will nor the way to stand up for this country in its dealings with the ECB. While Irish politicians and most of the media seem happy enough to paddle homelessness and our housing crisis over the waterfall.

till again.

(1) http://cif.ie/news-feed/news/628-response-to-minister-kelly-commentary-on-social-housing-development.html

(2) http://www.irishtimes.com/news/ireland/irish-news/credit-unions-offer-government-5bn-housing-fund-1.2577604

(3) https://www.centralbank.ie/about-us/Documents/ICURNCreditUnionPeerReviewReport_July2015.pdf

FG/LB shambles re Irish Water continues. In 2013/14 investment in Irish Water dropped from €600m+ to €300m+. To balance this drop in funding FG/LB touted the notion that Irish Water would be able to massively invest in off balance funding of Irish Water with the costs of this to be borne by the new Irish Water entity. They went ahead and proceeded to fund Irish water with loans obtained on a commercial basis from Irish banks.

'Whoa! Half empty! Definitely half empty!'

‘Whoa! Half empty! Definitely half empty!’

““The ability to access private sector financing in order to invest in improving Ireland’s water infrastructure was a key reason for the establishment of Irish Water. The funds we are borrowing will be used to address decades of underinvestment. The signing of this facility demonstrates confidence in the Irish Water strategy and its ability to borrow competitively from commercial banks. Lenders understand the long-term and sustainable utility model that we have adopted,” said Michael O’Sullivan, group finance director of Ervia, Irish Water’s parent company.”

http://www.irishtimes.com/business/energy-and-resources/irish-water-signs-100m-loan-facility-with-ulster-bank-1.2101187

Phil Coulter “Cool Clear Water”

https://www.youtube.com/watch?v=rDuWhUpOqJs

In November 2014, I blogged:

“Irish Water mess deepens. Apparently the cost of installing meters was understated by €100ml or 25% over the original guesstimate. https://www.irishtimes.com/news/ireland/irish-news/irish-water-parent-company-defends-100m-extra-for-meters-1.2012959 This came by the usual route. Once taxpayers are on the hook, another 25-30% can be leached from them with no one to say BOO. Don’t ask to what extent consultants costing extra €86 ml were involved in that decision.

Then it was decided we would not use the meters!

There was a time in this democracy when an increase in vat imposed on children’s shoes would bring down a government. Hardly an eyebrow is raised at the billions shovelled to bondholders, millions to consultants, with the prospect of further billions to be leached from taxpayers by Irish Water.

Have a look at this and look fondly back at the time we had democracy and not Endocracy a la Enda Kenny.

http://www.irishstatutebook.ie/1997/en/act/pub/0029/

“LOCAL GOVERNMENT (FINANCIAL PROVISIONS) ACT, 1997

AN ACT TO ENABLE LOCAL AUTHORITIES TO ENJOY THE REVENUES FROM DUTIES CHARGED UNDER THE FINANCE (EXCISE DUTIES) (VEHICLES) ACT, 1952 , AND FROM DUTIES AND FEES CHARGED UNDER CERTAIN OTHER ENACTMENTS, TO REMOVE THE POWER OF LOCAL AUTHORITIES TO MAKE CHARGES FOR THE SUPPLY OF WATER FOR DOMESTIC PURPOSES OR FOR THE DISPOSAL OF DOMESTIC SEWAGE, TO ENABLE STEPS TO BE TAKEN FOR THE PURPOSE OF SECURING THE PROVISION BY LOCAL AUTHORITIES OF SERVICES IN A MORE ECONOMICAL AND EFFICIENT MANNER, TO OTHERWISE MAKE PROVISION IN RELATION TO LOCAL GOVERNMENT (IN PARTICULAR FOR THE PURPOSE OF ENSURING THAT THE REVENUES FROM DUTIES AND FEES AFORESAID ARE APPORTIONED AMONG LOCAL AUTHORITIES ON AN EQUITABLE AND FAIR BASIS) AND TO PROVIDE FOR RELATED MATTERS. [20th May, 1997]”

Is Irish Water illegal and can it be challenged in court under the above provision.

On December 10 we need 10 out of ten people in Ireland to come out and object to the scandalous mess of Irish Water. Its reckoned the cost of setting up Irish Water will take 10 years of charges without one penny spent of the required billions to fund infrastructural development, that’s just to pay for the quango and the cost of keeping the mess tipping over.

http://www.environ.ie/en/Publications/Environment/Water/FileDownLoad,38716,en.pdf

The funding model of Irish Water makes an interesting read. Irish Water will be funded not only by the water tax charges levied on taxpayers by regressive taxation forcing Joe Soap, unemployed, to pay the same charge on his home without a swimming pool, as that payable by Bono, a tax exile. But it will be funded by government taxpayers money.

” Government decided that it would provide annual operating funding to
Irish Water in 2015 and 2016 (“Operating Funding”)”

“The Minister for Finance has sought the approval
of the Government to provide such moneys to Irish Water and the Government decided that
it would provide an amount of equity in 2014 to Irish Water (“Capital Funding”)”

In order to borrow the billions required to develop the water infrastructure currently envisaged by Irish Water it must satisfy certain European requirements:

“In addition, the Government decision in relation to Capital Funding has been framed on the basis that the Capital Funding provided to Irish Water will be classified in Government accounts as an acquisition of equity (which would not impact on GGDeficit) as opposed to a capital transfer (which would impact on GGDeficit). This classification is only likely to be accepted by Eurostat if Irish Water is a market producer and the Government can show it is acting as a rational investor in providing the Capital Funding. If reasonable investment returns are not expected to be made then the investment will be considered as a capital transfer not an acquisition of equity.”

In today’s financial world where black is often termed to be white it’s not at all certain that Irish Water will fail the test to prove it a viable concern for European investment funding.

It’s transparently obvious to this writer that given the back-end funding of Irish Water by way of both Capital Funding and Operating Funding and the cap on increases in water levy charges into 2015/16/17, that Irish Water by no means can deliver a ‘reasonable investment return’ without Enron accounting practices.

Neither this state nor Europe should invest in this awful mess. Europeans pay water charges and do not pay through the nose for water with their taxes. We pay for both through taxes and quangos….

Enda Kenny has holed Fine Gael under the water line with this Irish Water debacle.”

At this point it is crucial to assess the damage to Irish taxpayer liabilities provided by this debacle.

“It is likely, therefore, that the interest rate to be applied on Irish Water’s €550m borrowings this year will be in excess of the 1pc applied to Government borrowings and also more than the 2.5pc rate applied to Irish Water loans from the National Pension Reserve Fund under the old financial model.”

http://www.independent.ie/irish-news/water/irish-water-crisis/total-debt-at-underpressure-irish-water-now-tops-850m-31387172.html

It’s clear the establishment of Irish Water was designed by FG/LB to follow the road of privatisation with self-sustaining commercial borrowing as a foundation for future selling off of this state asset. The true extra cost of ‘commercial borrowing’ is not being released on grounds of ‘commercial sensitivity’. The Orwellian and dictatorial anti democratic nature of the Irish Water debacle has now come home to roost.

Eurostat decision to refuse to grant Irish Water take Irish Water into off-balance accounting must surely be the coup de grace for Irish Water.

It’s a pity Eurostat had not similar powers to refuse the Irish government’s guarantee taking over €440bn of contingent liabilities in the banking sector onto the shoulders of Irish taxpayers.

Even NAMA succeeded in passing the Eurostat tests and having its €67bn paid for matched by assets in bank property securities getting approval from Eurostat.

The extent of incompetence represented by Irish Water at the political level is rivalled only with the programme of Universal health care for under sixes blocking doctor’s surgeries with rich kids availing of free medical care while those with real medical need, the old, sick and disabled, lie on hospital trollies, or waiting lists awaiting important surgery or urgent medical reports/tests.

But Irish Water wins out as an Enda Kenny vanity project the scrapping of which would be a very smart move for FG/LB, little risk of that here so far.

The Irish people who’ve already rejected Irish Water will give their verdict on FG/LB and supporters of Irish Water at the next election.

 

 

Till again

 

 

http://www.independent.ie/business/world/government-accounting-hides-scale-of-offbalance-sheet-debts-26647973.html

http://www.irishtimes.com/opinion/opinion-eurostat-decision-on-irish-water-fuels-political-storm-1.2299965

I am Charlie Grexit

January 11, 2015

deflationThe euro has tumbled in world markets its decline accelerating in recent months from a high of $1.3993 last May to $1.1868 over the past few days stimulated by fears of a Greek exit and the failure of Mario Draghi’s negative interest rates and austerity to reverse its downward spiral.

Fuelling the decline is speculation of an imminent announcement that a stimulus of up to 1 trillion euros is on the cards.

Figures show deflation is taking hold across the euro zone.

Why this is bad, explained by Paul Krugman here http://krugman.blogs.nytimes.com/2010/08/02/why-is-deflation-bad/?_r=0

The effects of low growth are magnified with higher unemployment rates exacerbated in the euro zone by public health, education and social security programmes eg

http://ec.europa.eu/social/main.jsp?catId=26&langId=en

The cost of entitlements have a deeper effect in the euro zone than in the US where half of US citizens got little more than one day’s vacation over 2014. Morality demands the population be served by government not exploited by a slave owning elite.

Further deflationary pressures are caused by falling property prices. In Ireland this has led to pressure from the Central Bank and government to stimulate this sector through dubious means.

Asset purchases from NAMA through foreign vulture funds combined with shortages due to lack of construction, lack of lending into the property sector, a hike of 20% on required deposits for mortgages maintain asset prices through induced shortages, have created a market that has priced real people out of the market and made it the domain only of the super rich.

A market depending on the spending of the super rich and excluding ordinary people is a dysfunctional market that cannot last long. There are fears a whole generation will be condemned to renting from a rental market controlled by vulture funds and the rich as property is put beyond the reach of ordinary people.

It’s likely that austerity is the euro zone will put further pressure on indebted members to cut the cost of public health and social security programmes forcing countries to change their Health Service Executive into Trolley Service executives.

Government bonds under increasing pressure eg Greece to find buyers on international markets through negative perceptions re decline in the euro zone, will force pressure on Draghi to be buyer of last resort and thus lead to massive QE for Europe.

What are the implications of QE for eurozone?

One effect of QE is to drive bond prices higher and bond yields lower. This could have a negative effect on the eurozone. If the stimulus were a success, leading to stronger economic growth and inflation, then bond yields could rise as happened in the US as investors assumed economic growth and inflation would follow.

It’s a risky business but it may be the only card left to play in the eurozone’s last chance saloon. Its more likely to fail as countries such as Greece weighed down by massive debt forcing growth into the long stall, demand burden sharing and force default. In turn, this will create pressure on other countries such as Spain, Italy, Cyprus and Ireland.

Figures for 2014 show prices across the euro zone falling into deflationary levels. The effect of this is to worsen the plight of countries and individuals heavily in debt. Spending is put off in expectation of further price falls. Contracts large and small are forced to go for tighter profit margins. Prospect of Japanese stagnation and slow decline beckons.

Growth can no longer save economies already doomed with insurmountable debt burdens.

Add to the above mix the prospect of imminent defeat of right-wing parties in coming elections. From the certain defeat of Enda Kenny in 2016 to the imminent defeat at the end of this month of Greek premier Antonio Samaras both poster boy proponents of the poisoned chalice of austerity.

In Greece the left-wing Syriza party is likely to win. Alexis Tsipras has led Syriza with the banner of 50% write down of Greek debt.

Write-down sends shivers  leading to  euro tumbling in world financial markets.

Recent measures to build walls around the euro with the ESM are not built to withstand Greek default that can spread contagion to Spain, Cyprus and Italy.

It’s likely Draghi will try massive QE to stimulate the euro, stem the outflow from Greek debt write-down demands.

Part of the developing scenario may mean stay/go negotiations with Greece with no debt write-down on the table for Greece.

In such a situation Tsipras may steer Greece out of the euro looking for support from China and Russia with the euro zone choosing to sacrifice Greece to save itself.

Whether Greece stays or goes massive buying of government bonds through QE may then save contagion from spreading to other peripherals such as Spain, Portugal, Cyprus.

However, QE for the euro zone is not without its risks.

In Ireland we’ve experienced the side effects of US QE with foreign vulture fund activity in NAMA buying everything that moves. It’s likely that the purpose of QE to stimulate economic activity will stimulate the wrong kind of activity with negative downside.

Contagion of shadow banking with $600 billion only in collateral chasing trillions of derivatives blighted by cross puts similar to  mortgages in Ireland when paper deeds from single properties were used over and over again to leverage more and more blighted assets, is a tinder bed in shadow banking ready to ignite. Perhaps Grexit could lead to worldwide stock collapse of the bull market fed by QE.

Banks prefer the paper financial markets to real markets.

An example of wrong kind of activity is requirement by the Irish Central Bank to limit mortgages to those with 20% deposits requiring couples to pony up €80000 to acquire mortgage on €400,000 house. Rise in contract working and lack of permanent positions even in well paid employment make these mounts unrealisable for the majority.

The irony is  if prices are driven down by this requirement, if a large quick fix construction programme is begun, if NAMA releases its property portfolio into the rental market, this would have a negative impact on the balance sheet of Irish banks. The capital base of Irish banks would fall, negative equity and a deflationary spiral would ensue.

You might wonder what policy and regulatory framework gives rise to the above craziness from the Irish Central Bank?

If you are a member of the banking inquiry this might even whet your appetite to fall back to the years 2006-2008 to examine in detail the advice being given to the Irish financial markets at that time to the government, in particular the regulator, by the Irish Central Bank .

You might even want to talk to Mario Draghi or Jean-Claude Trichet to microsope  ECB involvement in the collapse of the Irish economy?

Mario Draghi has refused to come before the Irish Banking inquiry to answer such questions.

I thought there may be some answers given by Professor Honahan in his essay contribution to “Brian Lenihan In Calm and Crisis” edited by Brian Murphy, Mary O Rourke  and Noel Whelan published by Merrion Press before Xmas.

Regularly hauled out as an oracle on the Irish economy,  a  regular Rasputin to Irish tsars, the secret shadows of the Irish Central bank activities, are kept under wraps by Honahan.

No luck there, he gives no information away confining himself to prognostication on the performance of Brian Lenihan as minister for Finance under the shadowy grip of economic forces the Irish Banking Inquiry one doubts has the capacity to probe.

The Irish Banking Inquiry so far has no Judge Bailey Sean Dunne probity form. Honahan gives nothing away vis a vis ECB involvement with the Irish Central Bank.

How accountable was the ECB and the Irish Central Bank in management of the Irish financial crisis?

The compliance, subservience obedience and servitude of the Irish negotiating position is summed up by Honahan, P80, Brian Lenihan in Calm and Crisis:

“While he undoubtedly considered it a failure to have had to have recourse to a financial rescue package from international official sources, in fact, Brian deserved considerable credit for pushing ahead with negotiations without the ineffective grandstanding or attempted blackmail that some other countries have sometimes tried with the IMF. By embarking on the protection of the programme long before he ran out of cash, he enabled the Irish negotiators to settle on what has been a much more gradual path of fiscal correction than that imposed on other peripheral countries.”

Notice the way Honahan steers blame away from ECB by mentioning the IMF as lender of last resort. In fact IMF officials objected to the severity of the package offered to Ireland, but this was resisted by ECB who held sway as lenders over the IMF.

Blackmail is mentioned by Honahan, but facts show Ireland was blackmailed into agreement not to burn bondholders. Ineffective grandstanding is another contemptuous term used to try and stop comparisons between Iceland and Ireland, with Iceland succeeding and Ireland failing in falling victim to odious extortion by an elite cadre who had sold out taxpayers, to preserve their personal wealth and power base.

This is paid for currently by Irish people on trollies in A&E departments across Ireland with their health service in ruins.

Honahan’s role in vindicating the right of Irish people to fair treatment by external bondholders can be likened to that of Dermot MacMurrough circa 1120 who made his way to the Court of Henry II of England and offered to become a vassal to the King in return for military aid in retaking his kingdom.

Honahan and the Irish Central Bank negotiators retook Ireland for the ECB. They did not vindicate the rights of Irish taxpayers; they did not repudiate odious debt.

The terms of the bailout delivered to Ireland were subsequently watered down when other precedents for interest rate reductions for Greece and Portugal were set, that were less odious.

But its true, Irish negotiators gave up without a fight.

Perhaps Honahan will be brought before the Irish banking inquiry and given the same grilling Judge Bailey has given the Dunnes in the US. But I wouldn’t bank on it.33

At times, you would be forgiven for thinking Honahan was minister for Finance himself and that he had usurped that office.

The real shadow cabinet of Kenny, burton, Noonan and Howlin takes its orders from the erstwhile dictator Big Brother Mario Draghi with Honahan as underling.

For them, there is no third estate pillar of democracy with the right to freedom of information, the right to share this information with the public. This is a drift to extreme right-wing dictatorship unheard of in the past.

As if to emphasise this point during the past week, Censorship and propaganda stalked the land.

http://www.independent.ie/irish-news/politics/exclusive-fine-gael-snubs-vincent-brownes-tv3-general-election-debates-30893048.html 

Vincent Browne has been targeted both by Fine Gael and Labour the same week Charlie Hebdo was targeted by terrorists attacking freedom of expression in the media.

“Independent.ie can reveal that the party has refused to allow of any of its candidates to take part in the debates in what has come as a major blow to the broadcaster”

Surely the seriousness of this attack on freedom of expression and blatant effort at censorship should at least warrant every independent in the Dail refusing to attend until this odious ban is lifted?

Perhaps FG/LB do not wish to be questioned on the claim of growth levels for 2015 of 5% for one of the most heavily indebted countries in the world, in the face of deflationary or no growth in Europe, hospitals without beds for citizens, teachers on strike to prevent standards from falling further, only part-time jobs in the public sector, mostly contract jobs in the private sector, induced shortages in the property sector.

After the Irish water fiasco and the burning of the Junior Cert fiasco, his refusal to allow FG/LB candidates  to appear on TV with Vincent Brown, will Enda Kenny to prevent political debate like Goebbels organise a public burning of books?

 

Till next time.

 

 

End