Ireland. Don't Pay. Walk Away.

msteiner

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Nov 20, 2010
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Look the point is is that Ireland should just default. Let the system work itself out instead of inflating the artificial bubble anymore.
 


Squire Allworthy

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Quit negotiating with the EU and the IMF. The fact that anyone is doing it at all implies that the Irish people are contemplating assuming a debt that will destroy them and their country for generations. If all you are worried about is the interest rate, you are already accepting destruction.

The better solution is to negate the debt in a legal, lawful way without an actual "default."Everyone needs to remember Article 27 of the Constitution. Assuming this kind of debt for generations meets the criteria to require a vote by the Irish people. And if you read the article, you will realize that it takes fewer votes to put this issue to popular vote than it does for a vote of no confidence. All it takes is a majority in the Seanead and one-third of the Dail, and then the Irish people themselves get to decide if they are willing to beggar themselves, their children, and their grandchildren in order for foreign bond holders not to lose money on an investment in their portfolio.

I find it hard to imagine how anyone could put together an argument that this would be a good thing for Ireland.

The spin right now is that Ireland "must" assume the debt. That is a lie.

Ireland has two ways to get out of from under this debt: (1) the usual way that other countries do - simply default; and (2) a perfectly legal and lawful way provided by Article 27 of the Constitution.

The constitutional path is something that Ireland has that no other country has. If the referendum is worded in such a way that not only do the Irish people say no to assuming the debt but that they also deny that those who incurred this debt on their behalf had authority to do so, that would be a determination that the debt was unlawful and would legally nullify the whole thing.

Those foreign bond holders knew that Ireland was a constitutional republic when they bought those bonds. They knew that they were taking a risk, like all investors do when they put their money at risk in making an investment. They knew that, if it came to the point where the money had to be paid by the Irish government, the Irish people had constitutional right to say no. That was a business risk that they assumed, so they should be required to accept the consequences like all investors have to do when one of their investments goes bad.

The Irish have a Constitution that offers them a clean and lawful way out of this mess. They need to use it before it is too late.
Externally that would still be seen as default.

Need a decouple banking liabilities from government borrowing and a structured default or rather, through negotiation getting rid of the banking related obligations. Should never have been in there in the first place. The rest is fair and due to normal government expenditure and should be honoured.
 

Illustro

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Jun 27, 2009
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The Four Year Plan

 

Padraigin

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Externally that would still be seen as default.

And?

Refusing to assume the obligations of the banks - even with zero interest - is the main objective, which can be achieved two ways: (1) a lawful, legal way through an Article 27 referendum, which puts the refusal to accept the obligation as a business risk assumed by the bond holders when they purchased the bonds or (2) a simple default the way other countries do it.

The end result is the same, of course, but the end result is all that matters. The economists are clear that default is Ireland's best - and perhaps only - option. Doing it now before the Irish economy is damaged further by onerous tax burdens in the 4 year budget and while the Irish government still has some financial reserves would be best for everyone.

However, I basically agree with your second point. If everything associated with the banking guarantee could be wiped away, there is no financial crisis for Ireland. The remainder of the government debt is manageable.
 

EUrJokingMeRight

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Who knows? Keep an eye on what Fintan O'Toole says. He's probably the closest thing you will get to the truth these days.
Time to up your prescription.
 

Dimarzio123

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Feb 2, 2009
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Irish bonds hit over 9% this week.
Does that not imply that they are being traded on the open market at a 50% discount?
Could IRL not purchase those bonds as they become available for sale at this price.
Use the EU money for this.
Eliminate €2Bn debt for each €1Bn paid?
 

Freedom front

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Nov 7, 2010
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How can an these Austerity measures be inflicted on the Irish people to save private banks, it is a crime that anyone inflicted this pain on their own people, for no purpose or reason!

We have had 2 years of Austerity and it has failed , Why would we have another 4 years of Austerity work , it will fail again - This is a Crime against the Irish people and will not Work.
 

an innocent abroad

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Apr 15, 2010
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All the placards on saturday should read. THE IRISH PEOPLE DEMAND A DEFAULT! IT's friday night, they want the deal done by Sunday for the bond markets on monday morning, Start an email campaign to your friends and family and get them to send to all F.F.and Greens, plus the opposition, Let them see that DEFAULT is what the Irish people want. They were elected to rep the citizens, not the banks. We will pay our debts! Not the banks! They are protecting their friends, not the citizens. DEFAULT NOW! Remember the worlds press will be present, Let all the other countries see. The Government is not negioation on behalf of it's citizens, but the TOXIC BANKS. DEFAULT NOW. TAKE YOUR MONEY OUT OF THOSE BANKS!
 

turdsl

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We have no friends in the EU now, We had so many when we were ordered to vote twice on Lisbon to get the right answer, We are been treated as complete idiots. We can never pay those prices. We will default, the question is when.
 

Squire Allworthy

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And?

Refusing to assume the obligations of the banks - even with zero interest - is the main objective, which can be achieved two ways: (1) a lawful, legal way through an Article 27 referendum, which puts the refusal to accept the obligation as a business risk assumed by the bond holders when they purchased the bonds or (2) a simple default the way other countries do it.

The end result is the same, of course, but the end result is all that matters. The economists are clear that default is Ireland's best - and perhaps only - option. Doing it now before the Irish economy is damaged further by onerous tax burdens in the 4 year budget and while the Irish government still has some financial reserves would be best for everyone.

However, I basically agree with your second point. If everything associated with the banking guarantee could be wiped away, there is no financial crisis for Ireland. The remainder of the government debt is manageable.

I don't disagree that it is the best way forward as things now stand, your idea would offer a fig leaf and muddy the waters. That the guarantee can be challenged in a referendum is interesting. All I was pointing out was that it would be seen as a default.

I also agree the sooner the crisis is brought to a head the better.
 

ppcoyle

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Oct 11, 2010
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Unfortunately the poiticians with responsibility for running the country are those whose mismanagement of our economy got us to where we are now, and they are still in charge. We are at a critical stage in negotiations with the EU/ECB/IMF and, apart from Patrick Honohan, the civil servants and politicians involved in the negotiations are those who have been found to be wanting.

Paul Krugman has a very interesting and informative opinion piece on Ireland that is worth reading

http://www.nytimes.com/2010/11/26/opinion/26krugman.html?_r=2&hp

As a Nobel Laurate his views as an economist on Ireland's economic problems are worthy of consideration. Have a look at what he has to say.
 
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Padraigin

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Paul Krugman has a very interesting and informative opinion piece on Ireland that is worth reading

http://www.nytimes.com/2010/11/26/opinion/26krugman.html?_r=2&hp

As a Nobel Laurate his views as an economist on Ireland's economic problems are worthy of consideration. Have a look at what he has to say.

"In early 2009, a joke was making the rounds: “What’s the difference between Iceland and Ireland? Answer: One letter and about six months.” This was supposed to be gallows humor. No matter how bad the Irish situation, it couldn’t be compared with the utter disaster that was Iceland.

But at this point Iceland seems, if anything, to be doing better than its near-namesake. Its economic slump was no deeper than Ireland’s, its job losses were less severe and it seems better positioned for recovery. In fact, investors now appear to consider Iceland’s debt safer than Ireland’s. How is that possible?

Part of the answer is that Iceland let foreign lenders to its runaway banks pay the price of their poor judgment, rather than putting its own taxpayers on the line to guarantee bad private debts. As the International Monetary Fund notes — approvingly! — “private sector bankruptcies have led to a marked decline in external debt.” Meanwhile, Iceland helped avoid a financial panic in part by imposing temporary capital controls — that is, by limiting the ability of residents to pull funds out of the country.

And Iceland has also benefited from the fact that, unlike Ireland, it still has its own currency; devaluation of the krona, which has made Iceland’s exports more competitive, has been an important factor in limiting the depth of Iceland’s slump.

None of these heterodox options are available to Ireland, say the wise heads. Ireland, they say, must continue to inflict pain on its citizens — because to do anything else would fatally undermine confidence.

But Ireland is now in its third year of austerity, and confidence just keeps draining away. And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers’ sins is worse than a crime; it’s a mistake."


Exactly.

However, the entire premise is wrong.

The primary goal for the Irish government is NOT the "confidence" of the European financial markets.

The primary goal for the Irish government is the well-being of the Irish people.

That means, if you have to pick between the benefit fo the European financial markets and the benefit of the Irish people, you pick the benefit of the Irish people. End of.

If the European financial markets suffer, that is their problem. They are big boys. They know the rules. And they will always put their own interests ahead of the Irish people, as is crystal clear with the killer debt being peddled to the Irish governent under the guise of "help."

Just say no. How hard can that be?

Iceland is recovering well. Argentina turned a default into an economic boom. A defaul is the best and only reasonable option.
 

Illustro

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