No wonder the Greeks are upset. Yesterday, the IMF and the EU were busy trying to limit the damage following their mission to Greece. One auditor, also the EC representative, Servaas Deroose, encouraged the Greeks to “sell beaches” to pay back the IMF/EU loan.
We should take heed, because we are next.
What would you be prepared to sell to pay back the IMF/EU deal, which is designed to bail out bank gamblers who punted on Anglo? The Aran Islands? Dogs Bay or maybe a big slice of Achill? The Rock of Cashel — that’d make a few quid.
Mr Deroose has revealed something about the thinking behind the IMF/EU loan and the sequence of events in Greece and Ireland as the EU Commission sees it. Bad enough to have a citizen of the most fiscally incontinent country in Europe — Belgium — lecture us on government excess, worse to have him indicate that the fire sale of state assets is the endgame.
So let’s get things straight: the Irish citizen is being asked to take on the debts of the European banks and pay for this by selling our assets for half nothing to the same banks so that we can bail them out. We take on debts without a discount and sell assets without a premium. At the moment these loans that we are being asked to pay are trading at a deep, deep discount because the “assets” they were supposed to back have collapsed in value. Yet we are being asked to pay for these loans at par.
At the same time, our crucial and profitable state utilities — like the ESB — will be sold at a discount because the buyers will know that the sellers are screwed.
This is what is going on. An organised heist, which will play out in front of our eyes and reward the very investment banks that blew their own and their clients’ money on the promises of David Drumm and the like. Meanwhile, our politicians argue over the rate of interest, begging for crumbs when they should be fighting for us.
Someone has to stop this because the words of the EU Commission in Greece are directed at us too.
Is there anything we can do?
Yes there is. Whatever you might think of some senior European politicians, they are democrats. They are bonded together by the vision of Jean Monet and Schuman — the founders of the EU. Central to this vision was the notion of forgiveness. When I studied at the College of Europe in Bruges, this message was articulated again and again. Europe was a family of nations and once you were in the family, the family treated you as an equal and no matter what your previous behaviour, there was always a chance of redemption.
This allowed Germany to recover after the War and it is the same attitude which is allowing Serbia, a country which orchestrated genocide in Bosnia less than two decades ago, to seek EU membership.
In short, there are many more democrats in European politics than there are central bankers.
There are many more elected politicians with a broad European view informed by history than there are unelected central bankers with a narrow monetary view.
We need to bring this battle to generous European politicians and wrestle the details out of the mean fingers of bureaucrats and central bankers who were never elected and have no mandate.
But how?
You put it to the people. The new government should put to a referendum the question of making any further payments from the citizens to the bank creditors. This would give the new government a clear democratic mandate with which to negotiate. There is no democrat in Europe who would oppose the will of the people and it would get straight to the point where the political economy bulldozes the financial economy. It would also give the Government huge authority on the biggest issue facing us all.
But can it be done?
Yes, article 27 of the Constitution governs the circumstances where a decision which is of “such national importance that the will of the people thereon ought to be ascertained”. Article 27 has never been used for this purpose but there is provision in the Constitution for a referendum on something which is simply so important that the people should be able to vote on it.
So it can be done, but is it now too late?
No, it is not too late for two reasons. The first is that if we do not stop paying out money to the bondholders, we will default on everything — sovereign debt and all — eventually. This would be a disaster for every Irish person. The second reason is that the situation is getting worse.
Behind our back, the Irish banks keep issuing government- backed paper in our name and this is happening on a daily basis, welding us ever tighter to the delinquent banks. This has to stop.
Since the last week of January, Irish banks have issued €18.35bn worth of government guaranteed debt. So the reliance of Irish banks on government guaranteed debt has risen from €16billion in mid-January to about €34billion today.
This debt is being issued to allow the banks to either (a) unwind their positions with the Irish Central Bank’s Emergency Liquidity Assistance (basically the printing of money by the CBI) or (b) boost their funding position ahead of the bank stress test that is currently being carried out by the Central Bank.
Of course, all of this bank stress-testing is missing the point. The stress test that is now needed is a stress test on the State. Instead of believing the politicians that the State will be able to pay €100bn to the banks and everything will be fine, we should test the numbers and see if that is actually possible.
But, of course, that test will not be carried out. Because a stress test of the Irish State would show the one thing that no politician is willing to admit — that the State is currently insolvent, and the Government guaranteeing another €18billion of debt only serves to make that problem worse.
One way to put a stop to this madness is by holding a referendum. If ever there was an issue of such national significance, this is it. The time for a popular plebiscite has come.
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David, you need to be saying this on the likes of Vincent Browne otherwise not enough people will get the message. Seriously.
Isn’t it it always the function of the IMF, to grab the Crown jewels out of a deliberately mismanaged Country? to give their cronies? What are the after in Ireland? Yes, the coast line and the natural resources which C.H. and R.B.”gave away” the grab it a 2nd time round now it is very valuable and then their will be the land grab for your so much heralded golden opportunity for agriculture (David you got this very wrong), this will be industrialised farming at it worst! Imagen, 400times more slurry ….. who will drink the water then?… the dead fishes…… Read more »
Ah, so Germany wants to buy – dirt cheap – the Irish gas fields, is that it?
David There will be no referendum as the result would not suit our paymasters in Europe. I attended an event in UCC where Pat Cox ex president of EU spoke to students. On the dangers their democratic vote being influenced by commentators such as David Mc Williams calling for a referendum on EU /IMF debt deal he stated it would be a futile exercise on an angry electorate. The EU had to have a 2nd shot on Lisbon and we bought the jobs line. The country has been sold. It is being packaged for delivery. Bertie with Coillte ,Shell get… Read more »
—-Yes, article 27 of the Constitution governs the circumstances where a decision which is of “such national importance that the will of the people thereon ought to be ascertained”. Article 27 has never been used for this purpose but there is provision in the Constitution for a referendum on something which is simply so important that the people should be able to vote on it.—- I briefly spoke with a solicitor on the question of a referendum, he was convinced it can only be triggered by a majority vote in the Seanad or Parliament. I agree 100%, the people of… Read more »
This situation is almost surreal isn’t it? Can anyone do simple maths anymore? It’s very frusrating to watch and listen to ordinarily sensible people choosing to ignore the obvious consequences of their actions. This countrys economy is a train wreck in painful slow motion.
Weren’t almost half the senior bondholders paid back in full in September 2010? All done very quietly without much noise so as not to get the attention of the Irish public. ECB short term overnight funding (or the lender of last resort) has been used to replace these repaid bonds, and also to replace the ever increasing withdrawn deposit holder funds, which have been hemorrhaging. Any meaningful default will now necessitate the default on this short term ECB funding, which the Irish politicians are loath to consider, hence their prevaricating on a bondholder default. It’s either that or we must… Read more »
If the next government propose a sale of ANY state assets then it is the civic duty of every citizen to go out on the streets and insist it not happen. Alas this will not happen as the people are to antipathetic. The only other hope is a hung Dail with as unstable a tail wagging the dog as possible. In a year or more another election will bring things closer to the bone as the level of suffering will have had time to work on the vast majority of the citizens of this unhappy little republic which has been… Read more »
Mad angry crowds are also called mobs and you never get sense from a mob. We need a more accurate and correct method to make a decision. I expect more intelligent commentary from you david.. I agree with the rest of the article but your faith in the mob is very very misplaced and somewhat dangerous. I would ask why you feel the mob is best suited to this purpose when your education clearly dictates you know otherwise. The Irish nation is answering for its lazy slovenish carefree attitude over the years and now we are being called to account.… Read more »
We have to send a clear message to our politicians and to French and German taxpayers that 1. We, the Irish people, will not pay for the private losses of European banks on their ill chosen investments in Irish Bank bonds. For the EU/ECB to insist otherwise runs contrary to the fundamental principles of capitalism and justice 2. We will manage our public finances to close the government deficit to 3% or less by 2013 3. We commit to the full repayment of the debt accumulated by government borrowing to finance the government deficit We need to make a physical… Read more »
The first part of the article is great, it explains perfectly what is really going on with the bailouts and why a referendum is needed.
But then David starts singing the praises of EU politicians and saying how democratic they are. Has he forgotten what happened when Irish voters rejected the Nice and Lisbon treaties and when the French and Dutch voters rejected the European constitution (the template for Lisbon)? Was there a single prominent EU politician who supported democracy then?
I’ve come to believe corruption is the biggest inhibitor to society developing. I don’t believe in the state as an entity. It’s just another misguided human concept, a bit like God and any other entity we create that assumes power over our lives but is abused by others for self gain. The state is just another apparatus for control. I think most hard working people are probably able to give up between 20%-25% of their efforts to help the weak and vulnerable in society. If the state must exist it should only be allowed to do so in a controlled… Read more »
I hope you are right, but personally I don’t believe that the EU is remotely interested in democracy.
So after the election, the debt will still be in place.
What then?
Good article David. Your heart is clearly in the right place but you are forgetting something. The Irish people had a referendum on Lisbon and they said no. Next they were told by these ‘democrats’ that they had obviously not been thinking straight so they presuaded Ireland to think again and get our minds straight. The Irish Government jumped to their masters tune and forced a second referendum. If our own elected politicians have no respect for the voice of the Irish people then why should we expect European politicians to be any different? The rhetoric being spun is that… Read more »
Dear Candidate, You obviously democratically wish to represent the people? Can you honestly say that you trust the people? If you do not trust them you cannot not in truth democratically represent them! But if you do trust them, and cherish them – Pledge now to give the people a referendum on the IMF/EU Bailout as per Article 27 of the Constitution. This is one of the most defining times in our history and the people must be given a direct choice about their future path. Politicians cannot assume a mandate on such a burning question! Were the Icelandic politicians… Read more »
David mentions Serbia as an example of the EU’s positive attitude in helping European countries, but he reality is different. First the EU’s Nato members joined Bill Clinton in starting a war that bombed Serbia into submission over Kosovo. But that wasn’t enough. Then most of the EU governments supported the breakaway of Kosovo even after Serbia elected a pro-EU government. This is worse to Serbians than taking away Munster or Connaught would be to Ireland. Added to this, the Serbian pro-EU government has been unwilling or unable to stop corruption and poverty. As a result, earlier this month more… Read more »
I cannot agree with this statement, “There is no democrat in Europe who would oppose the will of the people” Remember LISBON. We the Irish people rejected it. They the democratically elected politicians of Ireland refused our decision ! I agree 100% in a REFERENDUN on the so-called ‘Bailout’. But when we the Irish people reject it we will be told we are incompetent to decide. The only time we Irish people are Sovereign in the eys of fools in the Dail is when are in Sovereign debt. Far from being a Bailout ’tis a SELLOUT. Please, please David save… Read more »
We have 8 days left to force the goverment elect into committing to a referendum. Why is David not on Vincent Browne instead of a pathetic John Gormley??? Why is the word ‘Referendum’ not on the lips of every Irish person???
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If the Irish people are foolish enough to elect FG the fire-sale of our national assets will go ahead with vigour; and not just because of IMF debt-pressure…but for ideological reasons…neo-liberal idiot-ology. What is happening globally is the bankrupting of the nations as a prelude to the creation of a new global central banking system that will supersede national sovereignty and oversee national budgets — it’s already happening here. The oligarchs cannot impose the new global order so they are creating the circumstances that will force nations to ask for it. You may be sure the entire structure is already… Read more »
David. I reckon the article s central thesis regarding the sale of indigenous asset wealth, that it may indeed surely, be the case, that the countries assets are indeed under serious threat now of a speedily ushered through garage sale and a subsequent sell off to foreign interests judging by what so far we have witnessed since the bursting of the property bubble and the aftermath. This outcome if it indeed it did materialize would be a natural next step in relation to the sequence of events which have unfolded since the blanket guarantee and its implementation and inception some… Read more »
David We don’t have to wait for permission to express the will of the people. Under the Lisbon Treaty one million citizens can present a proposal to the EU. This could include all Irish people in any part of Europe. This could be done immediately and would not cost a fortune. I Bet YOU could get more than 1 million Irish people to sign a petition! http://europa.eu/lisbon_treaty/glance/democracy/index_en.htm More participatory democracy There are already many ways in which European citizens can find out about and take part in the political process of the EU. The newest of these is the citizens’… Read more »
Well, the problem with such a scenario is that we will only be allowed to sell real assets. Therefore getting rid of RTE, and Montrose is not going to be allowed. Selling FAS is also a non-runner, because you could not find a customer. And forget about selling Dublin Airport for anything near what it cost. Interestingly enough, the UK government was intending to sell massive amounts of public forest land in Britain. There was a public consultation already on the issue. As a result of the public pressure, it has already been decided to set up a panel to… Read more »
Well any state asset or at least proports to be such that awards itself a pay rise in the depth of a recession and gives the public the 2 fingers at the same time deserves the chop and its no friend of ours. I refer to the ESB and they offer nothing to the state in awarding its chief exec €700,000 pa wages. We own it and we cant control it so its of no use to us at this stage so sell it and let those fat cats feel the weight of the new owners pen… They are billion… Read more »
Our politicians have completely ignored the Irish Constitution. They have rushed over each other to ignore it, to circumvent it, and to compromise it, so as to make Ireland a dominion of the nEU empire. All for their own political gain, and careerist ambition.
Hi Folk use http://www.candidatewatch.ie to put questions to the candidates and see how many will reply to your questions….
I havent got any answer to my question’s by any of the Candidates in Carlow Kilkenny
posted the same question to most candidates in the constituency, it would be such a brilliant tool, but would our politicians declare publicly and in writing what the stand for???
Still give them Question’s and let see what they answer….
It would be interesting if TPE.com carried out a poll of it’s existing members asking ‘Would you vote for or against the bailout/burning the bond holders?’. Although the results may not be shocking it would atleast be progressive.
OK I’m ready to do my bit, how do we get this petition rolling?
[…] Read more and readers comments at: Â http://www.davidmcwilliams.ie/2011/02/16/before-we-sell-the-country-we-should-ask-the-people […]
Max Keiser: MK: The biggest problem Ireland has is RTE, the state broadcaster. David McWilliams can appear in a 100 theatres across the country and light up the stage with brilliant analysis and provocative insights into the financial mess Ireland finds itself. He can write books, host festivals and appear on dozens of TV shows. And all that work gets overshadowed by an act of omission by RTE who refuses to report on the financial rape of Ireland by crooks that should be in jail. Two years ago I was asked to appear on RTE. Leading up to the interview,… Read more »
slightly off topic… but…. I feel EVERY Politician, every Civil ‘Servant’, every County Council High Official thus far should be stripped of all pensions, benefits etc and their assets be examined and reduced to the level of the ‘average’ Irish citizen. They have allowed abuse to permeate every sector of our lives. They have caused harm and profound distress to many, mnay people.
eg : http://www.youtube.com/watch?v=HSDbFg1S1jU
What every one carefully ignores is the human cost, the reality of lives of pain, the MEANING of that pain.
To me that is what really matters.
Don’t Ask Now Just LISTEN Full moon will be on Friday! Today, I came across one of those simple words, that give us food for thought if examined more closely: TRUST. The question: “How much do you trust?” is deep. In particular, if not only referred to a particular person, but to life in general and to normal course of events. It surely belongs to the more difficult tasks of life to continuously find trust. This does not only affect areas of faith, but also of hope. Maybe this is the reason, why it is one of those reassuring moments,… Read more »
Partition of a Kingdom Have we ever wondered why in the Kerry Kingdom Healy Rae holds a swath of specific voters in south Kerry only and not the kingdom as a hole? Kerry was partitioned before the country was and the rebels went south and the conformist went/remained north .This has been the status quo since.Thus the reason why They in the deep south send an Ear to Dublin to be heard on a one to one basis .They do this because the system does not serve their specific needs so they adapt and create their own political methodology.And it… Read more »
French Correllation
Ask most policemen in Paris where their family originally come from and they will tell you ‘ Corsica ‘ the rebel part of France.
The Tubridy family were ejected as part seven families to Clare ( including the Kellys ) and were known as The Magnificant 7
Mgt Thatcher grandmoother was a rebel from Adrigole Kerry and Mgt Thatchers son was part of the overthrow attempt in a small African Republic in recent years.So much for Jungle Politics and frightening when it is true.
Here is an economic perspective on the political process. It is titled “How to win an election”. http://www.marketoracle.co.uk/Article26352.html { Why are scoundrels successful in the political arena? Even if we recognize that morally corrupt individuals will seek to rule over others,[3] why do voters support such candidates? Would we not expect people to vote for morally upright candidates? Do corrupt candidates have an advantage over candidates with integrity? } Reading this, I am coming to the conclusion that only Shane Ross type candidates holding the balance of power, and being the “tail that wags the dog” can bring about the… Read more »
Our precious (and scarce) forests are next; please sign the woodland league petition:
http://www.thepetitionsite.com/2/help-save-irelands-forests/
what about a mass Egyptian style protest / camp out on the grounds of the Aras / phoenix park with one demand a refereendum using article 27
Lets by pass the poster boys the majority of whom are following the EU tune and take it to the top demanding mary mc aleese do something using article 27 or resign
or being the apathetic bunch we are do we wait till the weather gets better
Just finished watching “The Chinese are coming”. The usual views were put across about how China was extending its influence across Africa, South America and how US manufacturing was decimated and how a trade war would plung us all back to a global recession – blah blah blah. What struck me was 1) The “fear” of a Global Recession – which seemed utterly disconnected from the individuals on the ground. 2) the abject failure of US (and EU) policy to keep economies rolling beyond hoping for the best with the so called info economy while China exported deflation. 3) the… Read more »
Good on you David – Now we are sucking Diesel
Today’s News–NAMA RELATED ISSUE http://www.rte.ie/news/2011/0217/reo-business.html NAMA has welcomed the deal. ‘Based on the sale price achieved, all NAMA’s outlay – acquisition price and further investment – has been recovered,’ said NAMA chairman Frank Daly. ‘It is an excellent example of NAMA’s ability to enhance the value of its assets and will be seen as a positive sign for the Irish commercial property market,’ he added. There is no mention of whether a discount had been applied by NAMA at time of acquisition and the size of the discount, which the Taxpayer, of course, would have been obliged to cover. I… Read more »
David, I thought in an earlier article you said that you had no ideological reasons either to support or oppose privatization of public assets, which I took as being a pragmatic approach. You now appear to have moved to opposition side, which I welcome.
Would these not just be bought by foreign banks or other agencies leveraging cheap dollars to provide the asking price, seeing as the US is printing with abandon? (See Michael Hudson.) And can’t we assume that any regulatory safeguards to protect the Irish consumer (ie citizen) will be, in practice, useless as usual?
David
Can yourself an other high pofile people, Ross higgins etc not ask for a meeting with mary mc aleese and at least put the question to here regarding referendum.
she ignores odinary people and hides in the Aras but we cannot let her off the hook she has to deny or allow this
Furrylugs
You gave us a lot of insight into the Constitution on a few occassions .Have you anymore to add at this moment ?
Three words have been used recently relating to attaching blame to corrupt bankers :
fiduciary duties
subversive activities
treason
Default Express
We have in the past spoken about :
‘it will come’
afterwards we say :
‘it is comming ‘
recently we say :
‘it is comming ‘
now we say :
‘ it is arriving’
soon we will say :
‘oh shit’
[…] to this piece yesterday by David McDreamy, maverick analyst Max Keiser takes aim at Montrose on his website […]