ireland in bits
the truth will set us free
European Commission Bailout Report Translated
Feb 10th
The following is a translation of the “cover story (I mean Page)” found here on the EC site.
Ireland experienced strong growth from the early 1990s, after decades of poor economic performance. Initial success was attributable to sensible fiscal policies, an export-oriented industrial policy and the benefits of closer European economic integration and broader globalisation in a context of strong productivity enhancements. However, domestic demand increasingly took over from exports as growth driver. The strong economic expansion in the years immediately before the current crisis masked an over-reliance on construction as the engine of activity.
Translation:After decades of Fianna Fail mismanagement, Ireland briefly became a modern economy during a rainbow. No longer able to overspend, we sold out to US companies and got a huge bung from Brussels. Once we got our hands on the cash, we maxed out our Visas to build decks. This led to a situation where we couldn’t build enough flats to house even the Polish builders.
Boom-related windfall fiscal revenues were largely spent, contributing to overheating and loss of competitiveness. Amid intense competition for profits in the booming economy and property market, the pace of credit expansion accelerated sharply. Light-touch macro-prudential regulation and supervision did little to stem the swelling banking sector imbalances.
Translation:There was so much tax coming in, Bertie had trouble blowing it fast enough, but we eventually found enough candidate billionaires in a tent. The Germans, with no one to lend to, spotted an endless risk-free way of turning a profit. People were being pulled off the street and offered 120% loans for houses they didn’t even need. The lads in charge of watching the shop were too busy preparing their future spots on bank boards to even check up on their future colleagues.
From late 2007, investor confidence in Ireland’s property sector evaporated amid concerns about oversupply and a price bubble. This left Ireland facing the twin problems of a sharp decline in cyclical construction-related revenues and the sudden appearance of very large losses in the domestic banking system. The global financial crisis and the severe worldwide recession which it caused exacerbated the problems. From 2008, policies to address budgetary and financial stability concerns included fiscal consolidation as well as a range of banking support measures such as guarantees, capital injections and regulatory reforms. However, by 2010 GDP had fallen from peak by an estimated 17% in nominal terms and the underlying government deficit had increased to over 11%. Unemployment ratcheted upwards.
Translation:Eventually, in 2007, even the Germans couldn’t pretend it wasn’t all a scam. So they pulled the plug, the developers left, and the country was left with no tax revenue and the banks in the shit. It remained possible for a time to blame Lehmans. A succession of panic measures, including guaranteeing everyone who’d ever visited a bank, followed as Lenihan tried to hope and pray his way to a solution. As predicted by David McWilliams, this resulted in the entire thing becoming a total shambles. Everyone except the people responsible and the civil servants started losing their jobs in their droves.
By the autumn of 2010 the loss of investor confidence in Ireland triggered a vicious cycle. Deposit outflows from the banking sector accelerated and the cost of government borrowing reached unsustainable highs. As financing costs increased and renewed banking losses were revealed, investors were increasingly concerned about the capacity of the government to deal with the dual challenge of a large fiscal deficit and the state’s commitment to finance the growing cost of supporting a severely damaged banking sector. The credibility and thus the effectiveness of the government guarantees in the banking sector faded. More outflows and increasing borrowing costs further damaged confidence.
Translation:By last autumn, every cent not nailed down was rightly leaving the country where it would be safe. Nobody was going to lend to our dead banks, because this could be so bad no-one might ever be able to fix it. Sensing blood, the markets decided to sell sovereign bonds short and make a guaranteed profit. The only question was how much money could be made before the ECB bailed us out, and it was great craic altogether.
These challenges led the Irish authorities to request external help on 21 November 2010. A programme of €85bn financial assistance was agreed at staff level with the European Commission and the IMF, in liaison with the ECB; and approved by the ECOFIN Council and the IMF Board in December 2010. The programme provides for up to €50bn in fiscal needs and up to €35bn in banking support measures between 2011 and the end of 2013.
Translation:There is no bailout, or, eh, of course we’re delighted to welcome these vultures to come and buy our island. Yes, sir, no, sir, of course we’ve been bold boys and we’ll have to cut our pocket money and save up to fix those windows we broke. And yes it must be our fault for letting our banks force your banks to give us that money, sure how could you be expected to check anything might be wrong?
Funding from the programme partners is conditional on speedy action to clean up Ireland’s financial sector, to put the public finances on a sustainable path and to implement a structural reform package. The banking sector will become smaller to suit Ireland’s needs and credit institutions will have to increase capital adequacy standards as well as improve funding profiles to lower market perceptions of risk. Rigorous stress testing of the system is necessary, unviable institutions will need to be wound down and financial regulatory reform must be advanced. Fiscal consolidation of €15bn (9% of GDP) by 2014 – frontloaded and weighted towards expenditure reduction – is required to put the debt-to-GDP ratio on a firm downward trajectory after peaking in 2013. This will also put Ireland on track towards meeting its 2015 Excessive Deficit Procedure deficit target of 3% of GDP. In turn, reform to the budgetary process will help to ensure adequate safeguarding of the public finances. Although price competitiveness has improved, a sustainable economic growth path from 2011 onwards requires further relative price and wage adjustment and shifts of production capacity across sectors. Structural reform measures to boost competition and avoid unemployment traps are an important part of this strategy.
Translation:Those Irish muckers never had a chance. We’ll make them behave like good Germans. And their banks will have to become like good German, eh, hang on, like good German banks used to be. That’s better. Regardless of the pain, we’ll get them to shoehorn their broken economy into a mould we designed in a Treaty they rejected until reassured about abortion. There will be blood.
This report provides background to the programme and builds on the documents agreed with the Irish authorities.
Translation:This press release hopefully covers our ass when the whole thing goes tits up, and cleverly blames the Irish at the end.
Sign the Petition to the President of Ireland
Dec 17th
The policies of the Irish Government since well before the current crisis “fell from the sky” have been in clear breach of several express undertakings written into the Irish Constitution. These breaches are set out in a petition to the President, calling on her to uphold and defend the Constitution. Please have a good read of this, sign if you agree, and give your friends and contacts the same opportunity. The President is empowered to refuse to sign into law any Bill pending a test of its constitutionality, so perhaps she could exercise this power in regard to the laws steamrolled through the Oireachtas this week.
New Hope for “Craic Addicts” – Up Your Dosage!
Nov 24th
Rumours of a new “cure” for European victims of the most addictive and destructive “legal high” ever seen have been confirmed in the last few days, according to the team “responsible” for its development. Apparently representing “former” dealers and manufacturers of this viciously cyclical drug, they describe themselves as only a “technical team” acting for the “IMFEUECB” cartel.
Visiting one of their former victims in recent days, the leader of the team, known as “Chopper” on the street, said that they were testing the new therapy in a race against time. The radical therapy involves injecting victims of this cursed addiction with ever higher doses of the drug itself, in the hope that the normal effects will somehow be magically reversed.
Rival commentators, collectively referring to themselves as “ordinary decent economists”, and obviously coming from a position of jealous astonishment, have described this valourous last-ditch effort as “fncking madness”.
The drug “craic” causes numerous psychological and economic aberrations, including delusional optimism, blindness to the obvious, “imprinting” on anyone wearing pinstripe, an inversion of risk perception, and a sort of catatonic repetition of phrases such as “soft landing”, “sound fundamentals” and “there are no negotiations”.
The cost of this therapy will, ingeniously, be borne in full by the victim, who must return the amount of craic borrowed plus 5 percent per annum. Of course, the only place they can get the craic to pay back the loan of the craic if by buying it at an even higher price from exactly the same people who are administering the “extra craic injection therapy”, and coincidentally are the very same people who got them on the craic in the first place.
Some craic alright, said Mr Chopper as he sideswiped a beggar in the streets of Dublin recently.
The Election & Budget – How “Everybody” Wins (except us, naturally)
Nov 23rd
This may go down as the greatest “stroke” in Irish political history. Here’s how it works: when Sinn Féin wins the Donegal South-West bye-election, and a few more Fianna Fáil TD’s announce they’re joining the Rebellion, the Dáil mathematics will no longer allow the Budget to be passed.
Unless.
Unless Brian Cowen does a deal with Enda Kenny. Fine Gael are going to get their election in the New Year, so how better to go into it than to be able to say they acted in the National Interest by supporting (or at least abstaining from) the Budget? They can always repeal it and replace it in the Spring if it’s too unpalatable to them or their Labour partners (and they may even be allowed to influence things out of the Budget in return for support). They’ll look like they’ve put country before party and all that guff. And they’ll get to give Labour a little sideswipe in advance of the election.
For Fianna Fáil it’s even more attractive. This deal will actually allow the Government to survive a Fianna Fáil back bench rebellion, which is likely to reduce the electoral damage for those members who can say they opposed the Government, and underline how determined the Brians are to “do the right thing.”
WTF? Is anyone paying attention?
Nov 22nd
David McWilliams again says There Is Another Way – as I’ve said here before. IMF/EU intervention is a blessing, not a curse. It will give is the opportunity to tell the speculating morons who lent our banks billions to go whistle for their money.
Mark Coughlan gives us a nice sequence of sound bites from the Cowen and Lenihan Show stretching back to the night of the Bank Guarantee.
P O Neill looks at the role of the lawyers – inside and outside politics – in the development of these crises.
Yesterday’s Dilbert may have something useful to say about all this.
Gerard O’Neill discusses the question of sovereignty.
Michael Somers has a great precis in Saturday’s Irish Times.
And now Gormley throws in the towel, jumps onto his inflatable water-bike, and pedals like the hamster he is.
Even Declan Ganley Is Making Sense
Nov 13th
“@declanganley: So now Irish Gov’t is campaining against EU bailout, does that make them anti-Europeans? Or just Euroskeptics? Or enemy agents?”
Even this shower of dumb, self-deluding incompetents must surely recognise that everyone is either lying to them or demanding they wake up to the reality of this crisis.
Property Tax – a simple answer
Nov 12th
Just talking to Brian in Larry Murphy’s, he’s 73, on a reasonable pension from Guinness, but very worried about finding the money to pay a likely property tax on his once-modest house in Dalkey, worth God knows what a few years ago, now might raise a few million. He’s not in a position to pay 10, 12, 15 grand a year in tax on a house he’d be mad to sell today. So he’s very, very worried.
We got talking about this and also about Student Loans, and an idea surfaced – why not give people a choice on property tax? Pay the 0.4% each year or sign over 10-15% of their house in lieu. This could be borrowed against now to yield far more than 0.4%, and would let people like Brian sleep at night.
Did the Irish Central Bank Bankroll Anglo’s eur7.9bn Repayment?
Nov 11th
Gavin Sheridan suspects it might have. Of course, the unprecedented September jump in our Central Bank’s “other assets” balance sheet entry could be explained by any number of bank-bailout related activities. One thing’s for sure, and that’s that we are not entitled to know how, or why, such huge amounts of money are being moved around. Sorry, the other thing we know for sure is that this money is travelling out of our pockets (and our future pockets) and away to some vault in the Alps.
There Are Many Other Ways
Nov 10th
As David McWilliams writes, we need to tell the lying scumbag cartel that they lose, otherwise they will skin us and then pretend to ride to our rescue by next June. Time one of the main parties (you listening, Eamon?) got a pair and said this madness will not happen on their watch. The evil-of-two-lessers Civil War parties are equally clueless and bereft of the character required by this clear and present danger to this country.
You’re Running Out of Hiding Places, Brians
Nov 10th
David McWilliams says just now that the figures are even worse than being reported – hardly surprising as the sleepwalking Government and its constellation of lying scumbag “commentators” continue to peddle the myth that there is only one way to deal with this crisis. They claimed earlier today that the problem is how to convince the markets we are doing the right thing when in fact the problem is to identify and do the right thing. The proof is in the ever-rising bond yield and the lack of bids at over 10% – the “markets” (actually just individual hedge funds and investment bankers) know we’re going to default, and that following “the only way” will choke this economy to death.
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