Eurozone Sovereign Debt Crisis part 2 - Ireland

[sbat]

Apparently we produce people trained for no job.

True in the US as well, with the exception of STEM graduates (science, technology, engineering, mathematics). Growth here, I believe, is stymied in large part by the fact that there is such a low supply workers that are competent straight out of college in the real value adding growth industries.

 

[dandelion]

We have to change expectations. In the UK we have to break the idea of entitlement. We have to create a world where people are happy without the consumer drive.

Before you go on and spoil it, I think I agree. But....I see no indication in, for example, UK government policy that it is doing the tiniest thing to change fundamental economic principles of rich and poor division or which otherwise brought on the current mess. There are two different issues: how to deal with the current mess and how to proceed in the future.

If I was sitting in Greece, for all the faults, I would be wondering about whether I had any self determination, or whether in reality my fate rested on decisions in the Bundesbank.

This is foolishness. You know why Greece is in a mess. It was done deliberately by Greek politicians who were not merely incompetent but lied, and then got professional help to make their lies more credible.

Is it inevitable that I will end up working for the Germans one way or another?

My own view is that the UK government is not to be trusted to run the Uk economy, and therefore I welcom EU intervention. I imagine if I was Greek I might welcome some German intervention.

Give a population a choice between tightening the belt and delaying the inevitable, they will always choose the latter.

Its a funny thing that the one solution which is not being applied is default on debts. Instead private debt incurred by relatively few people is being nationalsied as public debt for which the entire population is responsible. Where are all those anti-state expansion people when you need them?

 

[sbat]

Before you go on and spoil it, I think I agree. But....I see no indication in, for example, UK government policy that it is doing the tiniest thing to change fundamental economic principles of rich and poor division or which otherwise brought on the current mess. There are two different issues: how to deal with the current mess and how to proceed in the future.

This is foolishness. You know why Greece is in a mess. It was done deliberately by Greek politicians who were not merely incompetent but lied, and then got professional help to make their lies more credible.

My own view is that the UK government is not to be trusted to run the Uk economy, and therefore I welcom EU intervention. I imagine if I was Greek I might welcome some German intervention.

Its a funny thing that the one solution which is not being applied is default on debts. Instead private debt incurred by relatively few people is being nationalsied as public debt for which the entire population is responsible. Where are all those anti-state expansion people when you need them?

But..if Greece defaulted on their debts, how would Greek citizens be able to buy the latest Rihanna CD? Or the newest Android tablets? Or the coolest Fisher-Price toys for Christmas?!

 

[ConanTheBarber]

are we talking Eaton (for those on the continent, a famous and successful private school ...

... whose graduates can spell).:tongue:

 

[sbat]

... whose graduates can spell).:tongue:

You one of 'em?

 

[ConanTheBarber]

You one of 'em?

Of Eton? No.
But I used to shop at Eaton's, a Canadian department store chain, now (sadly) defunct.

Dunno if Ah kin spElL.
U teLl me, bSaT.

 

[sbat]

Dunno if Ah kin spElL.
U teLl me, bSaT.

I didn't go to Eaton or Eton either, so I don't know if I can help you with that.

 

[Jason]

Away from Eton and vaguely back on topic - Draghi (ECB) has said that the present set-up of the euro is "unsustainable". This is of course stating the blindingly obvious, but coming from Draghi it is significant.

I think the issue is now in the politicians' lap. Agree Eurobonds PDQ or the euro gets it! However I think Eurobonds PDQ isn't actually possible. I interpret this comment as the euro gets it! And I think that is how the markets will see it - and presumably how Draghi expects the markets will see it.

 

[sbat]

Away from Eton and vaguely back on topic - Draghi (ECB) has said that the present set-up of the euro is "unsustainable". This is of course stating the blindingly obvious, but coming from Draghi it is significant.

I think the issue is now in the politicians' lap. Agree Eurobonds PDQ or the euro gets it! However I think Eurobonds PDQ isn't actually possible. I interpret this comment as the euro gets it! And I think that is how the markets will see it - and presumably how Draghi expects the markets will see it.

The issue is in the public's lap as they determine who gets and stays in office, and they have been found to vote for the people who tell them what they want to hear. In a sense, its not just the setup of the euro that's unsustainable, but of the EU as well.

 

[dandelion]

... whose graduates can spell).:tongue:

well I just went to a grammer. (abolished by Thatcher)

Away from Eton and vaguely back on topic -

I'm not sure it went off topic. The real question here is why some countries succeed and some do not. The UK is in the middle rank, and I fear some of its success may be down to private education, and some of is failure down to public education. The European sovereign debt crisis was caused by bankers, including a disproportionate number of privately educated ones. Thereby illustrating success and failure at the same time.

 

[Drifterwood]

well I just went to a grammer. (abolished by Thatcher).

No wonder it was closed. :tongue:

 

[dandelion]

No wonder it was closed. :tongue:

Yes, a politician changing their views in the face of political expediency. Extraordinary.

 

[Jason]

IRELAND

The polls have closed. The Irish system is from a past age. We have no official turnout figure, no official exit poll. The result will be tomorrow (Fri) afternoon. However the system of tallying box by box in each constituency and announcing the results as they go means that (unless it is a cliff hanger) we will know the result late morning.

The turnout has been very low, around half. This is likely to favour the NO vote.

The pre-election polls have shown something like 60% yes. There is a government internal poll today which gives a similar result. However two unofficial online polls are giving enormous majorities to no. There is a lot of chatter around the idea that people who actually voted, voted no. I'm thinking we might have a tighter result here than the walkover predicted for yes.

This referendum has impact. Even if 60% vote yes on a turnout of 50% (ie less than one in three) it is pretty lukewarm support to a policy supported by the three main political parties. If it is a cliff hanger tending to yes (which now looks possible) it means that one of the most important decisions around Irish sovereignty has been made by a bare majority on a low turnout, not good in any nation.

If Ireland surprises us all and votes no the impact will be seismic.

STOP PRESS
The Irish Government has just announced they have won the vote by more than 60%!

Assuming they are right the Eurocrats will be delighted. Long live the European Colonial Empire!

 

[LuciferChild]

IRELAND

Assuming they are right the Eurocrats will be delighted. Long live the European Colonial Empire!

If Europe wants to be united like a single continental country,I think they should act as one, time is running out.

 

[dandelion]

it means that one of the most important decisions around Irish sovereignty has been made by a bare majority on a low turnout, not good in any nation.

Happens regularly in the UK.

 

[Jason]

IMO time has run out. It is now too late to get Eurobonds through before it all falls down.

The action right now is in the backrooms, trying to get Spain to accept access to the massive bailout funds by formally ratifying the Fiscal Union. Spain is using this as a bargaining chip and has already got a massive watering down of the FU requirements for Spain (which makes a nonsense of the FU). And Spain will get just about whatever it wants.

The urgency is because until Spain ratifies the fire wall is NOT in place. The order has to be Spanish ratification prior to Grexit - and as Grexit now looks very possible the Spanish ratification is crucial.

Assuming the firewall is in place then the euro will withstand Grexit, at least in the short term. The new political and economic climate may give a new motivation for eurobonds, though I still don't see there is time to get them through. Rather I think there will be political will for a managed unwinding of the euro - basically a coral on currency movements for a few weeks and the all jump together solution.

 

[Jason]

It has emerged that the Irish government has called a 60%+ "yes" outcome on the referendum based on a poll conducted NINE DAYS AGO!

The rumours emerging are that the outcome is far closer. There are unofficial, small-scale polls Thursday which actual predict a clear no victory. There is sober reporting that it may be a close call.

I think we really are going to have to wait for votes to be counted on this one.

It occurs to me that if it were a no vote the Irish government would hope for the latest possible announcement as they might have to close the stock market early - and it is certainly in their interest to be claiming now that the vote is yes.

 

[ConanTheBarber]

... a coral on currency movements ....

Did all Brits go to a grammer?:biggrin1:
Sorry, just got my first pay cheque in six weaks.
Feeling friskee ... and ritch as Kreesus.

 

[dandelion]

Did all Brits go to a grammer?:biggrin1:

Some even learnt about irony. Typing though was definitely not on the curriculum and my typing is pathetic.

It occurs to me that if it were a no vote the Irish government would hope for the latest possible announcement as they might have to close the stock market early - and it is certainly in their interest to be claiming now that the vote is yes.

I dont understand why? There is no immediate crisis in Ireland. Comment I heard said the Irish are pretty much following the new terms anyway so whether they formally join is nether here nor there.

IMO time has run out. It is now too late to get Eurobonds through before it all falls down.

I still dont think eurobonds is the solution. If countries are refused lending due to the internal conditions on the bonds (ie already overborrowed) it will not help them now, or if they are allowed freely to borrow indefinitely against the european account then the current position will keep happening. The current economic situation needs to be reset by a whopping one-off transfer of paper assets. BORROWING is the problem, not the solution. If Germany borrows more then it just makes it harder for any other country to borrow themselves.

The action right now is in the backrooms, trying to get Spain to accept access to the massive bailout funds by formally ratifying the Fiscal Union. Spain is using this as a bargaining chip and has already got a massive watering down of the FU requirements for Spain (which makes a nonsense of the FU). And Spain will get just about whatever it wants.

Mmm. How's the property market in Germany? Any scope there for a collapse?

The UK Labour government avoided this by a policy of pumping money into the economy. I suppose this only worked because the scale of the property overhang was considerably less than in Ireland or Spain, but that is what they did. The current conservative government is heading back to the brink because they have decided to cut the money going into the economy before any money has appeared from anywhere else.

Brinksmanship will continue in this matter in Europe until the ECB does some more QE and intervention to prop up Spain and it will be helpfull if they push up inflation.

What is really needed is a bailout of private citizens in trouble. The money needs to go to the lowest possible point on the debt chain. Bailout citizens so they can afford to repay rather than bailing out the bank when they default. Now how would we do that?...mm....tax cuts? social care handouts to pay your mortgage?

And of course, the ECB has to create money, one way or another, and direct it towards the most serious areas. So lend a LOT more to Spanish banks. Take on their property portfolios at face value, perhaps? Thats what needs to be done. How are Germans feeling about printing lots of cash?

 

[Jason]

The Irish have accepted the Fiscal Union Compact by a clear majority, though exact figures are not yet available. I'm thinking of the rewrite of Irish history needed to explain this vote. Ireland was born out of a freedom struggle, defined itself as a free nation - the Irish Free State - that had emerged from beneath an English yoke, then voted for a situation that gives the people of Ireland far less freedom than they once had as part of the UK. The Dublin government is now a parish council with all important decisions taken by the Eurocrats. Irish sovereignty is substantially compromised. Yes Ireland is still a sovereign state but it is also a client state.

As for the ECB and QE - this it hasn't done and cannot do. It cannot create money. It can and has created liquidity, but in the form of loans that must be paid back. And this is why the whole situation is so unstable. There is very little prospect of these loans being paid back. There is very little prospect of an ECB that is already technically insolvent being able to roll them over. We now have a time limit - Eurobonds within a couple of years or the European banking system including the ECB falls to bits.

This of course assumes the euro can stagger on for another couple of years without Eurobonds - probably it can't.

I think we have an event soon which is Grexit plus the firewall defending Spain. What happens then is anyone's guess.