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Irish fury; proposed austerity
Topic Started: Nov 29 2010, 06:24 PM (258 Views)
brenda
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..............
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Irish fury as EU 'nationalises' Bank of Ireland
The European Union is to announce the effective nationalisation of Bank of Ireland within the next 48 hours after a weekend of crisis meetings between finance ministers and angry public demonstrations across Europe.

People took to the streets in Dublin to protest against the government's austerity measures
By Kamal Ahmed and Amy Wilson 10:18PM GMT 27 Nov 2010

Despite strong representations from the Irish government that Bank of Ireland was secure, the EU-brokered €85bn (£72bn) bail-out is likely to demand that billions more euros of capital are injected into the bank to take its key Tier 1 ratio up to 12pc, higher than the demands of the Basel process.
Sources said that the move will take the Irish government's stake in the bank from 36pc to an effective majority stake and dilute all other shareholdings. "It is nationalisation by any other name," the source said.
Ireland will also have to provide part of the bail-out funding itself from its National Pension Reserve Fund and will have to pay interest on the loan of above 6pc, higher than Greece's 5.2pc average interest rate.

The reason for the higher rate is because the €85bn facility will be available to Ireland for up to six years, longer than the Greek three-year bail-out deal.
A series of increasingly fraught conference calls between finance ministers have continued all weekend as Europe struggles to put together the final parts of a deal ready for an announcement before the markets open tomorrow.
Eurozone ministers fear that if no deal is published today, shares will again plunge in bank stocks, including Royal Bank of Scotland and Lloyds, over concerns that debt holders may be forced to accept losses. It is still unclear whether bond holders will suffer losses despite reports that they may do.
It was reported yesterday that at one point Christine Lagarde, the French finance minister, demanded that Europe's finance ministers travel to Brussels today to meet face-to-face before finalising the deal.
Last night it was still unclear whether such a meeting would go ahead after Ireland raised concerns about key ministers, such as the finance secretary, Brian Lenihan, being out of the country when the bail-out announcement is made.
More than 50,000 protesters took to the streets of Dublin yesterday in opposition to the government's planned €15bn austerity measures linked to the bailout. Public sector workers and students marched through Dublin and gathered outside the former GPO building, the site of the Irish Proclamation of Independence in 1916.
Jack O'Connor, president of the Irish Congress of Trade Unions, said the country had been brought "to its knees" by the government and banks.
Outside the Irish parliament, masked men set fire to an election poster of Brian Cowen.
There were similar rallies across Europe, with thousands gathering in Vienna to protest against cuts to public services in Austria. Another march is planned for Tuesday. In Hungary, Socialist party supporters took to the streets to oppose changes to pensions, which would see private pension holders forced back into the state scheme.
In Spain, which has also been the subject of intense scrutiny by investors in recent weeks, the prime minister, Jose Luis Rodriguez Zapatero, said the country could "accelerate" its austerity plans if necessary.
On Friday, Mr Zapatero had said there was "absolutely" no chance Spain would need to seek any kind of bail-out to manage its finances, as he moved to stop fears over the finances of neighbouring Portugal spreading to Spain.
Yesterday Mr Zapatero said he would not "deviate from austerity," after holding a meeting with the country's business leaders.
"If it is necessary to accelerate the reforms we will do it," he said.


http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8165146/Irish-fury-as-EU-nationalises-Bank-of-Ireland.html
“Weeds are flowers, too, once you get to know them.”
~A.A. Milne
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Piano*Dad
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Bull-Carp
Irish eyes aren't smiling.
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brenda
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..............
Piano*Dad
Nov 29 2010, 06:32 PM
Irish eyes aren't smiling.
No kidding! Most unhappy they are.
“Weeds are flowers, too, once you get to know them.”
~A.A. Milne
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Mikhailoh
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If you want trouble, find yourself a redhead
Was theirs brought on by Blarney Frank too?
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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ivorythumper
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I am so adjective that I verb nouns!
So much for the Irish miracle.
The dogma lives loudly within me.
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Piano*Dad
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Bull-Carp
The Irish 'miracle' actually was quite solid. The banking crisis was not an inevitable consequence of the basic policy framework that allowed rapid real growth.
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ivorythumper
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I am so adjective that I verb nouns!
P*D: What went wrong? 4 years ago they were the new model economy.

Tea Partiers are claiming that they stopped watching the store... other claim it was a superheated bubble... others suggest that the tax haven model was smoke and mirrors...

Your thoughts?
Edited by ivorythumper, Nov 29 2010, 07:39 PM.
The dogma lives loudly within me.
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Piano*Dad
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Bull-Carp
Oh, I think a lot of things conspired to ruin a good run. The problem now is that the "solutions" may prevent any real recovery for a long time.

On the one hand, there is no real magic to attaining economic growth. A country doesn't have to reinvent the wheel that other countries have long used. Catch up can be quite rapid if the stars align properly. One prerequisite is stable institutions that allow people to take the long view. Without that long term perspective, investment is meager, inefficient and short-sighted. The long run view is aided if countries have stable politics and sensible macroeconomic policy coupled with independent and efficient courts to handle important things like contracts and bankruptcy.

On the other hand, stable politics, uncorrupted institutions, and sensible macroeconomic policy are a holy grail that few nations actually seem to grasp for any sustained period of time.

Ireland really benefitted from embracing the European Union. Yes, they got some subsidies (agriculture). But they also used that assistance to develop physical and human infrastructure. They benefited from sensibly reducing corporate taxes. Once inside the EU and its institutional embrace, that encouraged firms to come in to take advantage of a relatively well-educated labor force, and one that spoke English (of a sort :lol2: ). That foreign investment helped create nice feedback that encouraged more education and investment. For a while, Ireland actually ceased hemorrhaging it's bright young labor force.

In addition, the development of contemporary outsourcing -- what Krugman has called "slicing up the value chain" -- worked in Ireland's favor. Ireland could be a platform for assembly, and for white collar activities (processing billing, etc) that could be shipped to firms elsewhere in the world over fiber optic connections ... the stuff Tom Friedman has written about in his books. Ireland's position as an English-speaking low-wage nation inside the EU, but with deep North American connections certainly worked to increase its value as an investment platform. All of this is still true, BTW, and provides cogent reasons why the 'miracle' really wasn't so miraculous.

More later. I'm going to bed now. :whome:

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ivorythumper
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I am so adjective that I verb nouns!
Thanks for those thoughts. I look forward to reading your views on why it all so suddenly crashed. Sweet dreams.
The dogma lives loudly within me.
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Frank_W
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Resident Misanthrope
Man... When the Irish get angry, look out! Give it 5 minutes and a couple o' pints, and they're over it. (But that 5 minutes!!) *shudder*
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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John D'Oh
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MAMIL
My Irish sister in law (now living in the UK) who I've just been visiting put it a lot more simply.

She just said 'Oh, it's back to normal, then'.
What do you mean "we", have you got a mouse in your pocket?
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