Monday, November 29, 2010

Ireland--like watching a slave auction

The tragedy that is about to befall Ireland--and by extension the rest of Europe--is absolutely inevitable unless there is a major rethinking about how debt is managed.  It must be remembered that bankruptcy laws and other restrictions on the moneylenders over the years have been enacted in response to outrages like we are seeing in Ireland.
The Chains of Capital are Only as Strong as the Weakest Link
Ireland and the House of Cards
Around here lately there’s been much talk about the Easter Rising. It’s nothing particularly interesting: just the “Men of 1916” turning up as the stars of a series of rhetorical questions that boil down to: “Was it for this that they gave their lives?” The Irish Times, bitter enemy of those rebels 94 years ago and rarely friendly toward them since, bundled the refrain into an editorial last week, and has since featured extra letters pages under the “Was it for this?” heading.
It’s not surprising that the struggle for national independence might come to mind as this state begs/negotiates a loan from foreign bankers so that it can pay off foreign bondholders. Just today Sinn Fein – the party that most loudly proclaims its inheritance from the freedom fighters of 1916 and subsequent War of Independence -- has scored a stunning victory in a by-election on the rocky terrain of Donegal South West.
But the mood of despair and anger here feels like something far beyond nationalism. Sinn Fein won in Donegal because (1) its candidate, Pearse (there’s 1916 again) Doherty took a court-case to force a long-overdue by-election against the wishes of a government desperately clinging to a narrow parliamentary majority; and (2) as a party it has found the guts to oppose the austerity consensus that governs the other major parties, and also guides the current bailout talks with the IMF, EU and European Central Bank.
It is in that sort of stance, and in the growing popular mood here to “burn the bondholders” – the global creditors of the Irish banks that imploded when the property bubble burst – that we can begin to discern the real potential significance of this moment, and of Ireland’s role in it. more
The Irish know they are getting screwed.  It may take stronger measures than marching in the street, but its a start.
Thousands march against budget cuts and IMF bailout
Ireland entered the final hours of negotiations for emergency EU and IMF loans on Saturday, as thousands of demonstrators marched through the streets of Dublin against the deal.
AFP - About 50,000 Irish people took to the streets Saturday to oppose savage cutbacks needed to secure an international bailout, police said, piling pressure on the debt-laden nation's embattled government.
Waving placards reading "Eire not for sale, not to the IMF" and "there is a better, fairer way", the crowd marched through Dublin in a mass protest against the austerity package announced Wednesday by Prime Minister Brian Cowen.
The four-year package will cut the minimum wage and slash 25,000 public sector jobs as the one time "Celtic Tiger" economy tries to pay off a huge budget deficit. more
Worst of all, these exercises in class warfare DO NOT WORK.  Fobbing off the bad debts of Ireland's go-go banks on the general public is just kicking the can down the road because Ireland's citizens cannot repay these ridiculous debts either.  Financial rule #1--debts that cannot be repaid will not be repaid.
Irish austerity plan leaves voters irate and markets cool
Ireland's drastic austerity plan has caused dismay among the public and drawn little enthusiasm from investors, leaving the government vulnerable to angry voters in forthcoming elections.
REUTERS - Ireland's government will face the first real backlash from a vicious set of austerity measures when voters head to the polls in the northwestern county of Donegal on Thursday.
Prime Minister Brian Cowen's four-year plan for tackling the worst budget deficit in Europe has failed to impress investors or calm fears that Ireland's woes will tip other euro zone nations into crisis.
The 15 billion euros ($20 billion) in spending cuts and tax increases unveiled on Wednesday will form the basis for an IMF/EU rescue package worth about 85 billion euros.
But the measures, including cuts to the minimum wage and thousands of job losses, are likely to seal defeat for Cowen's Fianna Fail party in the poll for a vacant parliamentary seat in Donegal and result in Cowen's majority shrinking to just two. more
Of course, the banksters are not merely content to ruin the lives of the Irish--they have managed to get the Germans on the hook for this madness.
EU rescue costs start to threaten Germany itself
The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.
Chancellor Angela Merkel would risk popular fury if she had to raise fresh funds for eurozone debtors at a time of welfare cuts in Germany. 
By Ambrose Evans-Pritchard 6:00AM GMT 26 Nov 2010
Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.
"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."
The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag.
While Germany's public and private debt is not extreme, it is very high for a country on the cusp of an acute ageing crisis. Adjusted for demographics, Germany is already one of the most indebted nations in the world.
Reports that EU officials are hatching plans to double the size of EU's €440bn (£373bn) rescue mechanism have inevitably caused outrage in Germany. Brussels has denied the claims, but the story has refused to die precisely because markets know the European Financial Stability Facility (EFSF) cannot cope with the all too possible event of a triple bail-out for Ireland, Portugal and Spain. more

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