28th November, 2010
Most Irish people want their government to default on debts to bondholders at the country’s banks, according to a poll published today.
Archive for the ‘Battle for Europe’ Category
Ireland-Polls support debt default
Posted by seumasach on November 29, 2010
Posted in Battle for Europe | Tagged: Ireland | Leave a Comment »
Ireland:agreement reached- NAMA to be extended, raid on pension funds
Posted by seumasach on November 28, 2010
The NAMA Scheme will be extended to remove remaining vulnerable land and development loans from Bank of Ireland and Allied Irish Bank by end-Q1 2011
The State’s contribution to the €85 billion facility will be €17½ billion, which will come from the National Pension Reserve Fund (NPRF) and other domestic cash resources.
Government Statement
Announcement of joint EU – IMF Programme for Ireland
29th November, 2010
The Government today agreed in principle to the provision of €85 billion of financial support to Ireland by Member States of the European Union through the European Financial Stability Fund (EFSF) and the European Financial Stability Mechanism; bilateral loans from the UK, Sweden and Denmark; and the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) on the basis of specified conditions.
The State’s contribution to the €85 billion facility will be €17½ billion, which will come from the National Pension Reserve Fund (NPRF) and other domestic cash resources. This means that the extent of the external assistance will be reduced to €67½ billion.
The purpose of the external financial support is to return our economy to sustainable growth and to ensure that we have a properly functioning healthy banking system.
The external support will be broken down as follows: €22½ billion from the European Financial Stability Mechanism (EFSM); €22½ billion from the International Monetary Fund (IMF); and €22½ billion from the European Financial Stability Fund (EFSF) and bilateral loans. The bilateral loans will be subject to the same conditionality as provided by the programme.
The facility will include up to €35 billion to support the banking system; €10 billion for the immediate recapitalisation and the remaining €25 billion will be provided on a contingency basis. Up to €50 billion to cover the financing of the State. The funds in the facility will be drawn down as necessary, although the amount will depend on the capital requirements of the financial system and NTMA bond issuances during the programme period.
If drawn down in total today, the combined annual average interest rate would be of the order of 5.8% per annum. The rate will vary according to the timing of the drawdown and market conditions.
The assistance of our EU partners and the IMF has been required because of the present high yields on Irish bonds, which have curtailed the State’s ability to borrow. Without this external support, the State would not be able to raise the funds required to pay for key public services for our citizens and to provide a functioning banking system to support economic activity. This support is also needed to safeguard financial stability in the euro area and the EU as a whole.
Programme for Support
The Programme for Support has been agreed with the EU Commission and the International Monetary Fund, in liaison with the European Central Bank. The Programme builds on the bank rescue policies that have been implemented by the Irish Government over the past two and a half years and on the recently announced National Recovery Plan. Details of the measures are set out in the accompanying Notes for Editors.
The Programme lays out a detailed timetable for the implementation of the measures contained in the National Recovery Plan.
The conditions governing the Programme will be set out in the Memorandum of Understanding and the Government will work closely with the various bodies to ensure that these conditions are met. The funding will be provided in quarterly tranches on the achievement of agreed quarterly targets.
The Programme has two parts – the first part deals with bank restructuring and reorganisation and the second part deals with fiscal policy and structural reform. The requirement for quarterly progress reports covers both parts of the programme. When the documentation on the Programme is finalised, it will be laid before the Houses of the Oireachtas.
Bank Restructuring and Reorganisation
The Programme for the Recovery of the Banking System will be an intensification of the measures already adopted by the Government. The programme provides for a fundamental downsizing and reorganisation of the banking sector so it is proportionate to the size of the economy. It will be capitalised to the highest international standards, and in a position to return to normal market sources of funding.
Fiscal Policy and Structural Reform
The Ecofin has acknowledged the EU Commission’s analysis that a further year may be required to achieve the 3% deficit target. This analysis is based on a more cautious growth outlook in 2011 and 2012 and the need to service the cost of additional bank recapitalisations envisaged under the programme. The Council has today extended the time frame by 1 year to 2015.
The Programme endorses the Irish Government’s budgetary adjustment Plan of €15 billion over the next four years, and the commitment for a substantial €6 billion frontloading of this plan in 2011. The details of the Programme closely reflects the key objectives set out in the National Recovery Plan published last week. The adjustment will be made up of €10 billion in expenditure savings and €5 billion in taxes.
The Programme endorses the structural reforms contained in the Plan which will underpin a return to sustainable economic growth over the coming years.
The Government welcomes the support shown to Ireland by our Eurozone partners and in particular by the United Kingdom, Sweden and Denmark who have expressed their willingness to offer bilateral assistance. The Government also welcomes the assistance of the IMF.
As part of the Programme, Ireland will discontinue its financial assistance to the Loan Facility to Greece. This commitment would have amounted to approximately €1 billion up to the period to mid-2013.
Ends
28th November 2010
Notes for Editors – Programme Measures
Fiscal Measures in the Programme
Taxation
Lowering of personal income tax bands and credits or equivalent measures
A reduction in pension tax relief and pension related deductions
A reduction in general tax expenditures
Excise and other tax increases
A reduction in private pension tax reliefs
A reduction in general tax expenditures
Site Valuation Tax to fund local services
A reform of capital gains tax and acquisitions tax
An increase in the carbon tax
Programme Expenditure
Savings in Social Protection expenditure through enhanced control measures, structural reform measures, a fall in the live register and if necessary, further rate reductions.
Increase the state pension age to 66 years in 2014, 67 in 2021 and 68 in 2028.
Nominal value of State pension will not be increased over the period of the plan.
Public Service Costs
Reduction of public service costs through a reduction in numbers and reform of work practices as agreed in the Croke Park Agreement.
A reduction of existing public service pensions on a progressive basis averaging over 4% will be introduced.
New public service entrants will also see a 10% pay reduction.
Reform of Pension entitlements for new entrants to the public service
including a review of accelerated retirement for certain categories of public servants and an indexation of pensions to consumer prices.
Pensions will be based on career average earnings.
New entrants’ retirement age will also be linked to the state pension retirement age.
Other
Other programme expenditure and reductions in public capital investment
Structural fiscal reforms
a Fiscal Responsibility Law will be introduced including a medium-term expenditure framework with binding multi-annual ceilings on expenditure in each area
Additional unplanned revenues must be allocated to debt reduction.
The government will establish a budgetary advisory council to provide an independent assessment of the Government’s budgetary position and forecasts.
the voluntary 15 day rule for prompt payments is extended to the health service executive, local authorities and state agencies
measures to be put in place to cap the contribution of the local government sector to general government borrowing at an acceptable level.
Structural reforms in the Programme
Labour market adjustment
Minimum wage:
Reduce national minimum wage by €1.00 per hour to foster job creation for categories at higher risk of unemployment and to prevent distortions associated with sectoral minimum wages
Enlarge the scope for the “inability to pay clause”
An independent review of the Registered Employment Agreements and Employment Regulation Orders. Terms of Reference to be agreed with European Commission Services.
Reform of the unemployment benefit system to incentivise early exit from unemployment.
Steps to tackle unemployment and poverty traps including reducing replacement rates for individuals receiving more than one type of benefit (including housing allowance).
Streamline administration of unemployment benefits, social assistance and active labour market policies, to reduce the overlapping of competencies among different departments;
Enhanced conditionality on work and training availability;
Reform of activation policies:
improved job profiling and increased engagement;
a more effective monitoring of jobseekers’ activities with regular evidence-based reports;
the application of sanction mechanisms for beneficiaries not complying with job-search conditionality and recommendations for participation in labour market programmes
Review of the personal debt regime:
New legislation to be prepared which will balance the interests of both creditors and debtors.
Competition
Removal of restrictions to competition in sheltered sectors including:
Legal profession:
establish an independent regulator;
implement the recommendations of the Legal Costs Working Group and outstanding Competition Authority recommendations.
Medical Profession:
eliminate restrictions on the number of GPs qualifying, remove restrictions on GPs wishing to treat public patients and restrictions on advertising.
Pharmacy Profession:
ensure the recent elimination of the 50% mark-up paid for medicines under the State’s Drugs Payments Scheme is enforced.
Enhanced competition in open markets
empower judges to impose fines and other sanctions in competition cases in order to generate more credible deterrence
require the competition authorities to list restrictions in competition law which exclude certain sectors from its scope and to identify processes to address them.
Examination of the impact of eliminating the cap on the size of retail premises
Bank Recapitalisation and Restructuring Measures
The Programme for the recovery of the banking system will be an intensification of the measures already adopted by the Government. The programme provides for a recapitalisation, fundamental downsizing, restructuring and reorganisation of the banking sector. The outcome will lead to a smaller banking system more proportionate to the size of the economy, capitalised to the highest international standards, with renewed access to normal market sources of funding and focused on strongly supporting the recovery of the economy.
The proposed programme has been developed with the assistance of, and is endorsed by, our international partners.
The main elements of the programme are as follows:-
Building on the results of the Central Bank of Ireland’s Prudential Capital Assessment Review (PCAR) carried out earlier this year additional capital requirements have been set.
The domestic banking system will benefit from a substantial and immediate recapitalisation raising Core Tier 1 capital ratios to at least 12%.
This action, along with early measures to support deleveraging set out below will result in an immediate injection of €10bn of fresh capital into the banking system, above and beyond that already committed.
Further recapitalisations will take place in the first half of 2011 as necessary based on the results of a detailed review and updating of the banks’ capital needs following a revised PCAR exercise undertaken by the Central Bank of Ireland and involving stringent stress testing.
A Prudential Liquidity Assessment Review (PLAR) will be implemented by the Central Bank of Ireland for the domestic banks to identify deleveraging actions necessary to significantly reduce their reliance on short term funding.
A substantial downsizing of the banking system will be achieved through early and decisive actions including:-
Banks will be required to run down non-core assets, securitize and or sell portfolios or divisions with credit enhancement provided by the State, if needed.
The NAMA Scheme will be extended to remove remaining vulnerable land and development loans from Bank of Ireland and Allied Irish Bank by end-Q1 2011
This process will be carried out in a carefully balanced and controlled manner with the benefit of the substantial resources available to the banks for their funding and capital needs.
Banks will be required to promptly and fully provide for all nonperforming assets.
The restructuring of Anglo Irish Bank and Irish Nationwide Building Society will be swiftly completed and submitted for EU State aid approval.
A significant strengthening of the regulation and stability of the credit union sector will be carried out by end-2011
A special legislative regime to resolve distressed credit institutions will be introduced early in 2011.
Specific legislation to support immediate restructuring actions is in preparation.
The credibility and implementation of the programme is underpinned by the availability of a very substantial capital pool comprised of both national and international resources.
The programme builds on and complements the broad set of actions taken by the Government over the past two years to resolve the difficulties of the banking sector including the provision of guarantees, recapitalisation of the banks and NAMA.
The primary objective of this far-reaching programme is to rebuild international market confidence in the Irish banking system to enable the banks to revert to normal market funding in due course and reduce progressively their reliance on funding from the Eurosystem and guarantees and other financial support from the Exchequer.
The programme provides a strong foundation for a reformed and restructured banking system. The programme is underpinned by the large commitment of financial resources to recovery of the banking system and the support and endorsement of the programme by the IMF and the EU.
This will be crucial to ensuring that the banks play a full and vital role in underpinning economic recovery and the achievement of the Government’s objectives detailed in the National Recovery Plan.
Posted in Battle for Europe | Tagged: failing banks, stop the bailout | Leave a Comment »
As Putin strikes back at the empire, where is Ireland going?
Posted by seumasach on November 27, 2010
Cailean Bochanan
27th November, 2010
The Atlanticist’s astonishing post G20 offensive has involved a new Korean provocation, a renewed and intensified assault on the eurozone and the flooding of the entire world with freshly minted dollars. They have also flooded the world with a wave of freshly penned bullshit from their formidable batteries of lying shills, economists and assorted “experts”. This is the empire’s last and greatest asset, the like of which has never been seen, the human intellect reduced to the tool of bandits, fraudsters and mobsters. The professors profess that all is well in the imperial heartlands, the land of economic recovery, of the punctilious observance of the highest standards of human rights, the paradigm of progress. That the rest of the world has resolutely decided to move on without us has gone unnoticed: we will defend to the last our right to blindness.
Posted in Battle for Europe | Tagged: Ireland, no to Irish bailout! | 2 Comments »
Ireland: Haircut, sir? 15% off? ‘Euro-banks set to lose €bns’
Posted by seumasach on November 26, 2010
Paul Mason
This morning’s leak to the Irish Times that the EU/IMF are, indeed, preparing to force those who have lent the Irish banks money to take a loss on their investment is being regarded as a big event in the world of finance.
Here’s why.
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Putin proposes Lisbon to Vladivostok free trade area
Posted by seumasach on November 26, 2010
Merkel said a free trade area between Russia and the European Union was “more of a question for the future.”
25th November, 2010
During his visit to Berlin, Russian Prime Minister Vladimir Putin voiced hope that his country could join the World Trade Organization (WTO) next year, saying that he thinks it “is possible and our wish.”
Posted in Battle for Europe | Tagged: Eurasian free trade area, Russian diplomacy | Leave a Comment »
Putin: Russia will join the euro one day
Posted by seumasach on November 26, 2010
In one fell swoop all the efforts of the London/ Wall street axis, the total mobilisation of all their assets and networks against the euro, comes to nothing. Putin also spoke of a free trade zone from the Atlantic to the Pacific. The fact that Josef Ackerman, who epitomised the Wall street trend in German finance, is going with the flow is enormously significant.
25th November, 2010
Speaking at a conference in Germany the Russian prime minister, who is in the country for talks with Chancellor Angela Merkel, said he was convinced the euro would stabilise and strengthen despite the current sovereign debt crisis.
Posted in Battle for Europe | Tagged: End of empire | Leave a Comment »
Russia and NATO: cooperation or confrontation?
Posted by seumasach on November 25, 2010
A senior Russian diplomat told Kommersant, “Yes, we will defend countries to the west of Russia. Equally, NATO must commit to the same responsibilities — any missiles that fly against us over Europe, they must all be shot down by American or NATO forces.”
Who would fire missiles across Europe against the Russians, I wonder? This a complex game but it all makes sense. You can’t just leave NATO any more than you can leave the mafia. Through NATO, Russia intends to draw Europe towards itself and provide the conditions for Europe to end its vassalage to the US.
“Even at its most Atlantist, Russia is establishing a new configuration without the Ango-American empire at the centre.”
No, it is “Atlanticist” in order to establish a new configuration without the Ango-American empire at the centre.
Eric Walberg
25th November, 2010
Medvedev’s presence in Lisbon was more a show of Russia’s importance than of subservience to the Euro-Atlantic alliance
The results of the NATO summit were as predictable as a Soviet Communist Party congress, with the word “peace” replaced by “war”. NATO’s embrace of the US agenda of missile defence, nuclear arms, and its new role as global policeman surprised no one. No word about the United Nations or peacekeeping. In deference to Russia, the only mention of eastern expansion was continued “partnerships” with former Soviet republics Ukraine and Georgia. Indonesia, Malaysia, Australia, New Zealand and Japan were also offered special status. The new Strategic Doctrine, replacing the more modest Euro-centric 1999 model, really just reaffirmed US control of the foreign policy of what Zbigniew Brzezinski called its “vassal states”.
There were a few ripples. France’s new defense minister, Alain Juppe, openly said the Afghan conflict was a “trap” for NATO and called for an exit strategy, unlike Head of the British Armed Forces Sir David Richards, who opined, “NATO now needs to plan for a 30 or 40 year role.” The Euro-spat continues over the continued presence of nuclear weapons in Europe, between France, which prides itself on its force de frappe, and Germany, which was denied any such private nuclear toys during the Cold War.
But they agreed to disagree and the summit was all smiles and photo ops, at least centre-stage. On the sidelines, Russian President Dmitri Medvedev told a warm United States President Obama Barack that he was ready tocooperate on missile defence but only in “a full-fledged strategic partnership between Russia and NATO”, and Afghanistan’s President Hamid Karzai told a frosty Obama that he should scale back military operations and night raids that inflict heavy civilian casualties.
Through NATO’s integration into the Pentagon’s world command structure, it can be said that now, officially, the US rules the world. NATO has its Istanbul Initiative, attempting to militarise the Mediterranean Dialogue and Gulf Cooperation Councils covering the entire Middle East, including Israel. Even in Africa, only Eritrea, Libya, Sudan and Zimbabwe do not (yet) have relations with USAFRICOM. But then, NATO’s two major “out of area” police roles — Kosovo and Afghanistan — are not encouraging signs, nor are the Pentagon’s efforts in Iraq. The bigger NATO gets, and the more far-flung the US military, the more unwieldy and expensive both become. How do Malaysian soldiers in Afghanistan converse with Albanians? As Muslims, they may know their prayers in Arabic, but only by rote. And can they be trusted to kill their Afghan brothers?
What Russian strategists really think of NATO’s “new” doctrine is difficult to tell. The professed preference for closer relations with the West by Atlantist Medvedev and the Russian elites he represents differ markedly from his predecessor Putin’s. Despite Medvedev’s assurances, his appearance at the NATO conference did little to dissipate the confusion about relations with NATO. His offer of a joint missile defence network is not the one that the US has in mind. He told the gathering that Russia won’t join NATO missile defence as “piece of furniture”. A senior Russian diplomat told Kommersant, “Yes, we will defend countries to the west of Russia. Equally, NATO must commit to the same responsibilities — any missiles that fly against us over Europe, they must all be shot down by American or NATO forces.”
Despite Russia’s apparent weakness, it still casts the biggest shadow over the alliance. There are signs of meaningful cooperation in the Russia-NATO Council Action Plan as described by Russian Foreign Minister Sergei Lavrov. Russia’s Black Sea Fleet is taking part in NATO’s antiterrorist Operation Active Endeavour in the Mediterranean Sea and fighting against piracy off the coast of Somalia. Rather than a will-o-the-wisp missile defence, he emphasised the joint radar system near completion along Russia’s western borders “to prevent seizures of aircraft by terrorists” and the ongoing assistance “during floods, fires and man-made disasters”.
But Lavrov said there are “international problems on which we do not see eye to eye”, that in any missile defence system there must be “no actions that may adversely affect the legitimate interests of each other”. He was more concerned about reducing conventional forces in Europe and “a systemic discussion about military restraint”. NATO “must be guided by the UN Charter, especially in regard to the possible use of force in international relation, and by international law”. Meaning, of course, that at present NATO policies adversely affect Russia, and NATO and the US are operating outside of international law.
Quite possibly more significant than the hot air emitted in Lisbon was the tete-a-tete between Medvedev, French President Nicolas Sarkozy and Germany Chancellor Angela Merkel a month earlier on 18-19 October at their own mini-summit in Deauville, calling on the EU to launch a “modernisation partnership” with Russia, establishing an economic space with “common security concepts”, including visa-free travel and cooperation on European security. The United States was pointedly not mentioned though the security issues involved “the Euro-Atlantic and Eurasian zones”, a half-step towards Medvedev’s proposal for a new European Security Treaty in 2008.
Despite the professed devotion of the French and German leaders to the US and the war in Afghanistan, this clear outreach to Russia by the EU’s most important members is an expression of the geopolitical logic at work as the US flounders and Russia matures into an unavoidable and increasingly desirable Eurasian partner. It is Russia that provides Europe with access to a large market and source of raw materials — a peaceful gateway to the entire continent. This contrasts with the US/NATO forced march from Eurasia’s underbelly, creating enemies from the Middle East through Iran to China. Spoiler Britain was pointedly left out of the Deauville summit. Even at its most Atlantist, Russia is establishing a new configuration without the Ango-American empire at the centre.
Both the power struggle among Russia’s political elite and the developing facts-on-the-ground in Afghanistan and Washington, where START is probably not going to be ratified by the Senate, will determine just how US-Euro-Russian relations fare, and whether calls for Putin to run for president in 2012 result in a return of Russian geopolitical strategy to the Eurasian path it was taking prior to Medvedev. Medvedev’s abrupt cancellation of the S-300 missile deal with Iran was not a popular one; it “undermines Russia’s prestige and erodes its security, making the world less safe for every one of us. At the moment, the Islamic world has reasons to believe that Moscow has switched to the camp of its foes,” warns former Russian Joint Chief of Staff member General Leonid Ivashov.
Turkish Foreign Minister Ahmet Davutoglu, taking a leaf from both Lavrov and Ivashov, insisted at the summit that any missile defence shield should protect NATO members from real threats, which translates into Turkish as “protecting NATO members from Israel, not Iran”. He called for a nuclear weapons-free zone ranging from Iran to Israel. Davutoglu might have felt more comfortable outside the summit with members of the “No to War – No to NATO” alliance, who continued their tradition of using NATO summits as platforms of protest against war and militarism. They installed a Square of Peace and held a counter summit and International Anti-war Assembly, suggesting their own Strategic Doctrine for NATO — euthanasia.
Eric Walberg writes for Al-Ahram Weekly http://weekly.ahram.org.eg/ You can reach him athttp://ericwalberg.com/
Posted in Battle for Europe | Tagged: End of empire, Russian diplomacy | Leave a Comment »
The empire fights back!
Posted by seumasach on November 23, 2010
Cailean Bochanan
23rd November, 2010
We haven’t had to wait long after the G20 summit for hostilities to break out. In a speech at a conference of European central bankers in Frankfurt Bernanke, chairman of the Federal Reserve had the temerity to blame China for the “excessive or volatile capital inflows” caused by dollar devaluation or quantitative easing. Let’s hope the Europeans took note of the new, abrasive style. After all, it’s also directed at them.
If the media is awash with anti-China propaganda it is also barking as never before for the end of the eurozone as if it was they who had just embarked on a lunatic programme of currency devaluation. But the idea is to bounce them into it, to break up the EU and to loot the place, which having never fully been subjected to the rigours of Thatcherism still has an air of complacent prosperity compared to the bombed out squalor of large areas of the US/UK. There are still juicy pickings there and City of London sharks, strategically placed and sensing weak EU leadership, have got the scent of blood.
Posted in Battle for Europe | Tagged: no new bailout, stop the bailout | Leave a Comment »
The EU and the Hedge Funds: regulation or the relinquishment of European sovereignty?
Posted by seumasach on November 22, 2010
Jean-Claude Paye
22nd November, 2010
In a blaze of publicity, the European Union has just adopted a regulatory code for hedge funds to manage the systemic risk that they impart to the general economy. In reality, observes Jean-Claude Paye, the new directive is a sieve which will have an effect contrary to that announced. Its real objective is to summarily control the European funds, while opening the door to U.S. funds which will be able to speculate without restriction at the expense of Europeans.
Posted in Battle for Europe | Tagged: hedge funds | Leave a Comment »
Why Britain can’t afford a meltdown in the Irish economy
Posted by seumasach on November 18, 2010
18th November, 2010
IT may seem strange that London has volunteered to help shoulder the cost of any Irish bailout when Britain has remained resolutely outside the eurozone.
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A crisis we can’t afford to ignore
Posted by seumasach on November 16, 2010
RBS owns the Ulster Bank in Ireland and Lloyds offshoot HBOS went on a mad expansion spree in Ireland at the peak of the credit boom in 2005.
Now we can see why Cameron is so keen on an EU bailout of Ireland- with £143 bullion invested in Ireland, much of it directly into Ireland’s collapsing property market, it would be to a large extent a bailout of Britain’s banks. This is in any case inevitable given the collapse of our own economy and property market, but it would be a coup for the City if they could get the EU to cough up for a large chunk of it. The EU has yet to deal with the “British question”- the fact that they have left their western flank exposed to city of London financial operations. This could be an opportunity to do so. Interesting that after the rebuff of the Obama/Cameron offensive in Seoul, the focus turns immediately to the euro rather than to the infinitely more vulnerable pound and dollar.
Alex Brummer
16th November, 2010
No one in Britain can look at the rapidly unfolding Irish financial crisis with any kind of calm because the UK and Irish banking systems – and the countries’ wider economies – are inextricably bound together.
Posted in Battle for Europe, UK economy | Tagged: no new bailout | Leave a Comment »
In These New Times 