Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
THE INTERNATIONAL MONETARY Fund (IMF) is reported to be preparing €600 billion worth of credit for Italy to help stabilise the eurozone nation.
La Stampa newspaper reports (Italian) that the IMF is preparing the credit line for a period of between a year and 18 months in order to help new prime minister Mario Monti stabilise the financial situation in the country.
The interest rate paid on such assistance would be between four and six per cent, much cheaper than the current cost of Italian borrowing which has been hovering above 7 per cent for 10-year bonds alone in recent weeks.
The La Stampa report, which cites an IMF insider, says that the source of such a level of funding is not entirely clear as yet with possible assistance from the European Central Bank (ECB).
Although Germany would be resistant to such involvement by the ECB, as is its long-held view, it is reported that Angela Merkel’s government would be assured by the fact the loans to Italy would be “under strict supervision” by the IMF, according to the paper.
Italy has a debt burden of around €1.9 trillion but is also suffering from weak economic growth.
The uncertainty surrounding the country has unsettled markets in recent weeks leading to fears that it would require a bailout in the manner which Greece, Ireland and Portugal have all needed.
A change of government has done little to assuage fears among investors.
To embed this post, copy the code below on your site
Who in their right mind could possibly think that nationalising billions of euros of private debt was a good idea??
The only two real options at the time was nationalizing the banks or the Guarantee. No one really considered allowing certain banks to go to the wall.
The Guarantee meant that nationalization became inevitable.
By the time the decision was made, we were already doomed. It was the policies of FF that did us in, not really the Guarantee itself.
The government should have taken all the mortgage accounts from them. Then the people could have paid directly to the government and they would have control over the arrears crisis. As it stands, the banks are still making money from their cock-ups.
I would still like to know which of our politicians (and members of their families) were given unsecured loans in the days and weeks leading up to the bank guarantee………. kind of the elephant in the room really. I suspect some of our political representatives did very well from the great book fiddling swindle.
With us of course paying for it.
And why tf are our politicians still being paid such obscene amounts of money?
Remind me again of Bertie’s annual pension?
Ridiculous carry on.
Lol four idiots so far and probably many more. Mostly politicians I assume aswell.
Bob,
We have not nationalised the banks. We have nationalised the debts of the banks which is a different thing entirely. A proper nationalisation of the banks would see them being run for the general good of society and not as the private profit gouging entities that they currently are.
Usual Socialist, drivel.
Had Capitalist rules been followed, the banks would have been let go under. They invest to make a profit, which they are entitled to keep. If they make losses, then they must suffer them, all of them. Secured or unsecured bondholders and shareholders should have been entitled to nothing.
We could not do that because we were running deficits in order to pay for the Socialist derived, fixed prices of the public sector which is far above what the free market is screaming.
Your ideology failed, it’s been in one or two text books and newspapers.
We were running deficits? Really? What planet were you living on?
Typical crazy talk from the looney capitalists and their enablers who destroyed the world economy. Find me a “free market”. Anywhere. At any time in history .
We had an inbuilt structural deficit that was waiting to blow up in our faces, which it duly did once the income from stamp duty vanished.
However, it wasn’t socialism (or capitalism) that was to blame for that – it was FFism.
On the contrary, it’s your capitalist ideology that has failed or rather it has never worked for bulk of the world’s population in the first place.
The FF/Green decision to socialize the banking debt had nothing to do with the budget deficit. Ireland was actually running a budget surplus in the years leading up to the bank guarantee. You might remember that as it was in one or two text books and newspapers .
Most countries run a budget deficit most of the time. The deficit only becomes a serious problem when you are unable to finance it as in Ireland’s case now. Ordinarily countries finance their deficits by borrowing the money in the market. Or if they control their own currency, they can create new money by buying their own government’s bonds etc (Quantitative easing as the Yanks call it). Even in the depths of the 1980s recession, Ireland was always able to go to the market to fund the budget deficit until Brian Lenihan bailed out the banks in 2008. The markets then realised Ireland would not be able to cover the massive banking losses and pay them back and so the interest rate they demanded rose to an unaffordable level. This pushed us into the tender Troika embrace who now lend us the money and charge interest so that we can pay the banking debt as well as our budget deficit.
The fundamental underlying reason that the markets can now dictate to Ireland is that when we joined the monetary union we relinquished the authority to create our own currency to the ECB and they have been acting contrary to Ireland’s national interests ever since. True sovereign nations like the U.S. or U.K. don’t have to borrow their own currency in the market, they can simply create it at will by pressing keys on a computer in their central banks. The markets understand this perfectly and so if these countries do choose to borrow in the market, the interest they will pay on sovereign debt is close to zero and always will be.
No, a blanket guarantee was the right decision.
http://www.independent.ie/business/irish/irelands-budget-deficit-trebles-26481715.html
Did you simply make a mistake or does the uncomfortable black hole in your philosophy cause you to ignore it. A bit like a pig on animal farm.
Before we, the taxpayer, bailed out the bank’s private losses, we were running deficits. A massive deficit that could no longer be shouldered by the private sector. Banks are about to go under, all of them. Financial collapse, like Zimbabwe or Weimar Germany. Literally no money in the ATM’s.
A company that faces such losses, immediately cuts costs in order to avoid going out of business. This is how efficiency is determined. If you are running losses, you are inefficient and should be replaced, capital is entrusted to those who can make profits. The banks should have been allowed collapse with only the deposit holders(all of them) guaranteed by the government. The bondholders and shareholders get nothing as is the basis of capitalist risk. Moral hazard removes this.
A budget deficit means you are spending beyond your means. It means somebody else is financing it and if they believe you are no longer good for the money, they stop. Who exactly did you think was going to make up the deficit. Where do you think these magical pieces of paper, comes from, comrade. No one. How do we know this, because no one would lend us money. That’s why BIFFO had to go crawling to the ECB. How do you block this out?
We cut the deficit by inflicting on the vastly overpaid, public sector(excluding anyone on 35k or less and the frontline(nurses, gardai) the same pain felt by the hundreds of thousands that have been made redundant, forced to emigrate or had huge salary reductions.
No deficit, means no need to borrow. No property tax, no USC, no water charges, no increase in makey uppy tax like motor tax etc (hilarious that you are campaigning against these. Nobody does brass neck better than the far left)
We now present OUR terms to Merkel. A collective Eurobond to cover the market or the Irish punt gets printed. Why on earth did you think the wall street journal ran the headline:
“Ireland bails out Germany, again.
Ireland did not do this because Ireland had engaged in a ‘Social’ partnership with all powerful Unions, who care only about their members and not a jot about the unemployed, emigrated or elderly(latest attempt to take the travel pass from the elderly, to figuratively throw the elderly under the teflon bus driver’s bus)
Real world. Price for a product or service is determined by demand and supply. If I don’t value a product at the price being offered, I don’t pay for it. You cannot get around that. So, you ignore it.
Socialist system. We force the taxpayer to pay a price high above what the market demands. We exclude other, equally abled and qualified people for competing for a job at a lower price. In Private Enterprise, it would be called a cartel. Inefficient use of resources.
The value of a product or service is not how much work you have put into it, but how much value the consumer is willing to pay for it. Marx’s failed Labour theory of value, no matter how many times it has been discredited, even by left wing economists, still rears it’s head thanks to the useful idiots. I am better at producing something than you, I can produce the same thing in less time and at less cost(efficient use of resources, means I get rewarded by the customer.
I work twice as smart or harder than you, I get paid double as determined by a consumer of their own free will, again, not a monopoly.
Remove these and you have the Socialist paradise of of the USSR or Venezuela, Cuba(Dictatorships to most people, but workers Republics to the far left)
We must work harder for you, Coddler.
Some load of shite there kid. A bit like blaming a patient for the cost of their medical care because they went to the doctor to get cured. This had nothing to do with socialism and everything to do with a drive to the bottom……..the bottom line, that is.
Brian just goes to show the level of thickooos that we have in this country .
Perhaps. It is however irrelevant to why we collapsed. The government bought all the sectoral interests it is true but the drivers of our complete collapse were the credit bubble and its associated property market.
We couldn’t pay for our state because our unemployment is a crisis, not stamp duty. Low consumer activity, low economic activity, high social welfare demands due to unemployment, fewer income tax payers. The notion that sacking a bunch of state employees and shrinking the economy, doing nothing to stimulate demand in the local economy and merely hoping the FDI sector would grow and save us is wishful thinking and has failed everywhere it became the orthodoxy.
Fantasists pretending that “proper” capitalism would have solved our problems
Sound just like people defending Stalinism as if it hadn’t been given a good try: proper communism doesn’t work like that. This is actually the way capitalism works: finance bubbles, collapses, cronies, plutocrats….
The fantasy of a free market is just that.
Yes, this crisis clearly showed the fatal flaws of capitalism which is why all the capitalism countries have now collapsed. Or not.
Huge error of judgement that’s all but destroyed the country. Unsecured bondholders should have been left to sing for their money, but for some inexplicable and unexplained reason, Fianna Fail protected this money.
Politician, their benefactors and cronies don’t seem to be suffering at all. They don’t have a clue what it’s like in the real world.
My explanation of the reason Daisy would be because most of them probably ARE the non secure bondholders, no one names these faceless entities… but they have great protection and clout, so who the hell are they, them that must be paid even for liabilities that have no security… even someone getting a car loan must have security… why were these bonds not insured???
Noonan and burton to name but two.
What is worse is the current government followed FF policy and has ensured we are ruined.
Never thought of it that way? good post
@caroline
Thanks, and as Ryan O above points out, Noonan and Burton, I do believe I read someplace that Noonan has his money in German banks… as my husband says, ‘follow the money’ you will find the bondholders, but we all can see that the main stream media in Ireland haven’t the balls to do a decent day’s investigative journalism and if they do, they are made redundant…
What choice did the current govt have? We don’t run our own affairs anymore whether we exit the bailout or not. In any case we elected the current crew knowing exactly what they were going to do.
In is impossible to comprehend how our political system advanced the cause of so few ahead of the cause of the people. We should not be asking why securing the banks was a good idea! We must ask ourselves why no one has been charged and jailed from the political classes and the banking sector for the rape of a nation.
We elected Fianna Fáil to run the political system. The system itself is deeply deeply flawed but with different people in power it could’ve been a different story.
@Colm,
I admire your optimism and I agree different people could have led to a different result.
Now the tricky part, does anyone really think FG, Lab, SF…. Would have given a different result? Truely???
So while blaming FF for 100% of the problem is popular, if we think the others would have done the same thing then we have something more fundamentally at fault.
One thing that has been pointed out was that all the power of this decision was resting in a very few people advised by a few others(backroom staff).
So I ask do we need change, do we need to expand the power of Government to more, have more accountability…
We have made the Senate unrepresentative, a Taoiseach’s play thing for favours and nurtured any power anyway.
The Dail will never allow a proper upper house with actual teeth, that would mean when Bank Bailouts come up they won’t be able to just push it passed there own party, they would actually have to openly convince another body.
Nothing new here. It will never change as long as we let the people who broke the system try to fix the system. In Ireland prostitution is illegal but bankers have been and will continue to screw us without even dressing provocatively as long as we allow them to. More fools us.
Should have defaulted
The US secretary of the treasury in Obama’s admin {Minister for finance} played a pivotal role in stopping Lenihan from doing just that. Yet were Obama to come to town tomorrow the flag wavers would be out lining the streets to welcome him.
Geitner was not in any position to stop lenihan. Lenihan ALLOWED Geitner to have an influence.
Important difference.
So do tell what it was that influenced Lenihan to be won over.
If the bankruptcies of the banks would have caused a systemic problem, then the Euro authorities & ECB should have stepped in themselves & accepted the collective responsibility of the European financial system.
It was a finance bubble involving commercial lending, mostly to inflated values of commercial property. Household borrowing was not a significant factor in the banks’ insolvency.
There was & still is a systemic problem in the sheer size of the securitisation & financial derivatives gambling ‘markets’, compared to the real economy, which serve no purpose but ‘rent’ extraction. (The ‘useful’ ‘hedges’ are probably not even 1% of the extent of the total gambling.) The biggest problem being that institutions involved in this also operate the day to day payments & clearing system.
None of the deregulation which enabled this was an accident. With the collusion of their European counter parts, Wall St. insiders entered positions, or bought influence, in government, starting in the US, but using the WTO (World Trade Organisation) to entrench a ‘race to the bottom’ in governance in Europe & beyond.
The final steps to create the free-for-all in world banking were probably initiated by Robert Rubin & his protege Lawrence Summers, as detailed in ‘Economists and the Powerful’ by Norbert Haring & Niall Douglas. (But also assisted by all those going thru’ the revolving doors between Wall St. & Government office, including Tim Geithner, Bernanke, Greenspan & a host of others.)
Virtually none of the issues, fraud & criminality discussed in their book (and by others, notably former regulator, now Professor, William Black) have been addressed in the 5 years or so since the meltdown & public bailout.
Nor have the deep flaws of the Euro system been addressed or even much acknowledged.
Again, this is no accident. The reason is simple. For the top few percent, which covers elected & public service leaders as well as bankers & other owners of wealth, financial collapses followed by public bailout covering virtually every cent of ‘loss’ works fine for themselves. As does the ensuing period of recession & mass unemployment where wages are driven down & assets – public & private – are now available at firesale prices.
In short, the looting of the masses, directly & thru’ public funds, by the wealthy & political classes, continues in both the boom & bust phases more or less equally.
‘Democracy’ ultimately, has been corrupted by ensuring senior elected & public interest officials, of all kinds, all join the ranks of wealth, who make significant (if not the major part) of their income from ownership of money, rather than their labour.
We have not had ‘democracy’ that represents the interests of the majority at any time in decades at least, much anywhere.
“
Spot on Aaron. These were defunct business entities.
One further point of clarification regarding the rigged casino involving banks & financial derivatives – a ‘market’ that has grown to more than 10 times the size of total world economic production (GDP).
Besides the looting from public funds in bailouts, a major source of ‘marks’ or losing counter parties is the pension funds, private, & sometimes public. The ones handling the funds of the ordinary citizens of course. The top few percent make their own arrangements or are in receipt of guaranteed (by us!) benefit government schemes.
Matt Taibbi at the Rolling Stone writes about the looting of municipal schemes in the US, but the methods of skimming off & other losing positions are broadly similar anywhere.
http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926
If only the other 99.9% of the Irish could get their heads out of the ground and read the above.
It was the greatest injustice to befall our nation and completely avoidable. The unsecured bondholders were EXPECTING to lose their money as per the basic rules of capitalism, but within a few days of ‘saving’ our banks the vested interests got their blanket guarantee and our nation was sold into debt servitude.
There was enough in the NPRF to guarantee Irish depositors up to 100,000 and the balance could have been used to loan to SMEs via a national bank, keeping us afloat. It was obvious, mind numbingly obvious. But a barrister and his gobsh1te leader thought they knew more about international finance than the experts.
And here we are.
That former leader should be jailed for treason!!! ASAP.
Should have defaulted and went down the same road as Iceland
The government and all it’s advisors at the time when this was signed, should be considered as traitors to the state and locked up now,
Who in their right mind would answer yes?!
The Fianna Fáil posse that hangs around here trying to drive the minds of the nation?
Only 2% thankfully
the 2% are Fianna Failers and Greens.
Oh yeah… :-/
3% now, Niall :(
People that misread the question? :P
*hangs head in shame*
Lol Emilio :)
I’m actually more interested in the people who voted an unqualified No. What was Plan B? Yes, in principle you could have let the banks go bust. Depositors with up to €100k would have been covered under the general guarantee – which would have to come from somewhere – but would you have been ok with there being no banking system at all in the intervening period?
Good point, Emily. I would add, I would be interested in those who are giving an unqualified Yes.
3rd option was to set up a new bank and take the deposits of all the Irish banks and have the taxpayer guarantee those. This is all that is required to guarantee the financial system.
Capitalism’s rules, had they been followed would have seen the bondholders(both secure and unsecured) and shareholders of the banks lose everything(although they would be entitled to any recuperation of loans after the Taxpayers was compensated for the topping up of the missing deposits.
The Government failed to do this because
1)They failed to understand the situation.
2)They were/are running deficits in order to pay for the Public sector and all the state bodies. To make up the difference, we have to borrow on the open market. After defaulting, the Government would have found it hard to raise capital hence the need to crawl to the ECB.
3) They did not have the courage to stare down the Unions and make the necessary cuts.
4)They failed to understand that the Germans, British etc had vast liabilities in our banks and would face ruin themselves if our banks went under. It should of been us, dictating terms to the Germans.
A guy in the Indo today had his pension with Anglo refunded. €440,000…
Happy days—for him! Will we write a cheque or cash for the next guy?
Or will we stick him on the dole and pay for him anyway?
We could leave him to thrive on the old age pension
Big Pat is paying for us all, party!
Should of followed Iceland’s example. Burned the bond holders, bailed out mortgage holders in arrears and jailed the corrupt bankers/politicians. Of course we do things arse ways here.
Tempting idea this Iceland thing but it ignores the fact that Iceland isn’t in the euro zone and had some options we didn’t have. I
46% voting yes to this? Is it any wonder we’re in the mess we’re in!! At this rate i think i might as well emigrate now!! We’ve no hope in this country if people are still so delusional about the decision on the banking crisis, we’re truly doomed if this is the case.
All people hear in this country is lies and spin from any government. How can people make an informed decision based on that. That’s the only reason i can come up with for the yes vote, or the qualified yes vote.
Patrick, I voted yes, but not to cover all liabilities.
Now, can I ask you something?
How much money did you have between all the Irish banks on that night in September?
Savings, Pensions, Investments, the whole lot.
Why didn’t they have a referendum on it for the people that’s was going to pay it to decide? …….
That’s what is called Direct Democracy, where the people make the choice and then live with it. It works in other countries so no reason why we can’t have it here. Have a read on this site http://directdemocracyireland.ie/ for more information about it.
I will never vote FG, FF, Labour or Greens AGAIN for the rest of my life. I will not put into power a party that ignores my best interest and that of the country for the sake of a few.
Agreed.
Well said Jim.
My pug was born in 2008!
I love my pug! Hahaha!!
Hindsight is always 20/20. The guarantee was necessary while the government investigated and established facts. Once it was established just how cocked up the banks were, the decision should have been revisited. Anglo should never have been included in the gurantee and all the bankers who were in Leinster house that night should all be in jail for lying, fraud and treason.
Not right decision, but gov were manipulated into it by banks.
Looking back its easy to see badly managed, but banks forced Lenihan into it. They arrived at last minute demanding guarantee with threats of being unable to open next day if not given, they openly lied or withheld information on severity of problem.
Bankers in that metering should all be behind bars
I agree fully …….but bankers will never see the inside of a jail cell ! When u hear the then Taoiseach (Cowen)out playing golf with Sean Fitzpatrick a few months prior to the bank guarantee, u can be sure that he will never be caged up the whole lot of them are all in on it ……FOLLOW THE MONEY is how you’ll find in inner dealings with governments and bankers, but that would open up a can of worms for them so as it was
Anglo Irish should not have been part of the guarantee!
Hindsight is a great thing. That is all.
Its easy be the economist now ,I’m sure Brian Lenihans actions on that famous night to save the banks ,were done with good faith ,not his fault the banks lied so cut them some slack ,by the way I’ve never voted FF
Brian Lenihan was a barrister, ie not dumb in the face of the law and yet, never included any clause in the woeful bailout bundle that would recall or void any bank agreement with any bank that were found to have supplied false information… ? ie Anglo…
They should have let one bank go under to put pressure on the others to get their bank in order
one word. Iceland.
Hindsight is a wonderful thing. I think had the banks been allowed fail (which should have happened), there’d have been a revolution that would’ve swept the establishment aside & we would be part of new political landscape today. But I think this decision, deeply flawed and poorly thought out, had more of party interest ahead of national and international interest. Now we have to live with it along with the status quo protected. Same noses in the same trough and slapping each other on the back for ‘a job well done.’
The public does not share in the profits of corporates..thus why should it work that the public takes the hit on corporate losses!?
That is NOT capitalism! Capitalist system supposed to allow for corporates to fail..without knock on
“Economic collapse, mass joblessness, uniformed paramilitaries, street violence, political assassinations and, now, a round-up of opposition MPs. Euro-wracked Greece is beginning to feel eerily like Weimar Germany.”
Daniel Hannan MEP
We would never stoop to that sort of thing, we have Enda and Ankles and the EUSSR to keep us all safe and sound.
If the Government did not go along with the Bail out. One would ask what way would the country be now. Did they have much of a choice.440 billion is a very large amount of money. So we will be paying for that for generations to come.I would say they should have not have went along with this bail out. The country cannot sustain it. The question now is will it be explained to the Irish people what happened on that night. They have a right to know.Reading the article above some say there was no other option. They did go to far . They could have called their bluff I am sure that the bond holders would not like to have seen Ireland go down because they would have lot a lot of money.
what a stupid question! of course it wasn’t a good idea ! who in their right mind would think that saddling the future generations of the country with massive debt in order to save the face of a few private entrprises was a good ide? oh wait our political classes ,thats who, just shows the type of moron that get elected in this country!
It’s good to see 3% of this poll is absolutely coo coo batshit
I thought it was total madness, we should have had a referendum on the guarantee to make it more democratic, the banks should have been let go to the wall altogether like Iceland.
Brian Lenihan RIP should never been allowed to carry on in his position with the diagnosis he had.The man was dying how in the name of God would he have been thinking straight or long term for that matter .We had a Taoisech in a bunker or a bar (whichever) surrounded by yes men.This was at typical FF stroke ” we will guarantee all 440 Billion” sure nobody will ever actually call it in.I remember distinctly Lenihan saying when funds started to flow back into Ireland (for a very short period) proudly saying on Morning Ireland that this was working and the banks were sound just look at the funds returning.Look at the history of the State FF have always come up with a major stroke, but this was one stroke too far.As for this crowd who promised the stars and delivered on nothing they are mostly sunset politicians waiting for the big payoff and to write their memoirs or maybe a nice job in Europe which Gilmore and Rabbit (they of the many parties)are obviously canvassing for unashamedly.We are screwed, unless you happen to be lucky enough to have a PS job then hang on in there your political masters wont let you down.Emigration beckons for the rest of us.
I personally think that a bank is like any other business. Im still baffled as to how we are responsible for them. Let banks crash like any other business that made bad decisions.
And the depositors of those banks?
There should be safeguards for depositors. They are run like any other business and make big profits from it, which we as tax paying citizens will never see. Its not like we have shares in the banks. If that was the case then all banks should be government run, which is what is practically happening here.
Its the same as countless people who were made redundant from private companies and received no compensation after years with these companies after they went into liquidation. Its still not the governments responsibility. They could however put money that actually have into a struggling company like Obama did with general motors. I can now understand why generations before kept their money under mattresses.
If I sign up for insurance and provide false information then the insurance company does not have to pay out when it proves I have lied. Why did the Irish Government guarantee not have small print stating the guarantee was based on the information it received from the banks being accurate and true. When it became obvious the banks where lying then the guarantee should have been pulled that simple.
Hindsight is a wonderful thing isn’t it.
Yes it was. Fact.
No to a total blanket guarantee-utter madness
No, it was wrong.
136 Fianna Fáil idiots voted Yes.
Wish i could gamble my money on shares and get a guarantied win.
This really is not good enough. What is the point of a poll such as this? The majority will say no, they saw trouble coming down the track – and the ff party hacks will justify it on the grounds that there was no alternative. Very poor, Journal.
Emily, its a game of who scares who. The germans want you to believe the country will crash if you dont pay out to their banks. Reality; pressure on the euro was coming from many countries incl portugal spain greece. The ecb would never allow us to crash the euro. We could have played a better hand eg. Allow banks not ‘systemically important’like anglo to go bust. Worked fine in latvia with krajbank in 2011and they were accepted after that as a euro zone country. Guarantee senior bondholders only. They bullied us and we did not stand up. I checked some websites of german financial institiutions a while back when i went to the ecb in frankfurt with the ballyhea cork protest. Know what; irish bonds etc were highly praised as vv secure and high yield! So the result of the bail out was deutsche bank got its money back and ther investment banks had a field day selling lucrative irish bonds….
The ecb lead us right into this one…
Http://m.vice.com/en_uk/read/larry-summers-and-the-secret-end-game-memo
Do the people who come up with these polls not read the comments sections? I think there is a mention of the folly of the banking guarantee commented under the All-Ireland match report today.
Trichet ecb pres. With help from geithmer us tresury forced them into it protecting us, german, french bank money and preventing de stalibilzation of the euro the germans need a steady but weak euro to support their export lead economy. Geithner with larry summers caused the problemby repealing legislation which prevented dodgy banikng practices eg. Commodity futures legalization act 2000 & repeal of glas steagall act 1999. Geithner & summers foisted dodgy bank paper on the eurozone using a w.t.o. agreement. The ecb did not do its job failed in its regulatory supervisory role, the banks went nuts, we got burned. Little ireland was not strong enough to stand up the the ecb bullies and still isnt. In the euro its the big boys who count. The ecb allowed latvia to join euro per jan2014 and didnt mind at all that latvian krajbank went bust in 2011. No bail outs for bondholders…i guess there was no goldman,deutsche bank, or bnp paribas money in latvia! Pity we cant deflate our currency to get out of this mess,sovereingty is lost. Status quo only suits germany. Countries outside euro seem to be ok eg denmark, sweden.
It would have been smarter economics to give every citizen one million euros. Most people would have cleared their debts and banked the rest. Monies allocated to children could have been invested and banked till they reached the age of twenty one. For those who owed more than one million: HARD LUCK.
I think the damage was long done before the guarantee night. Wages had gone way out of control and people were looking for increases in same because the cost of living was increasing. This has been our main problem. Even if we started at zero that night our economy was still a mess and was uncompetitive. If the bank guarantee wasn’t done that night the banks would have closed their doors the following morning. We would have had chaos as people panicked unable to get money from ATMs, companies unable to pay employees, the country would have ground to a halt. One of the biggest problems is that very few people were aware of what was going on. Even those in government and on the cabinet were clueless and many were illeterate when it came to economics.
It was all about buying time. If we defaulted that night who was going to fund our budget deficit.
People have said that Anglo shouldn’t have been covered. But would that have been legal? Can a government choose what banks it wants to save? Would there not have been huge legal cases in the aftermath?
Much is made of the guarantee night but its importance is over-estimated. Many of our problems that night had been created from long before and would have continued in some form no matter what action we took.
I think a lot of our problems go back to the funding of political parties. Should political donations be illegal and should the taxpayer fund the political system. Otherwise favours have been and will be bought.
have your say