The Irish are going to pay a high price for the EU decision two years to bailout Europe’s failing banks.
TINA is never elected
EU finance ministers are meeting in Brussels to discuss the detail of €85,000,000,000 of EU-IMF loans to Ireland.
Not least will be the question of interest rates and how much the Irish public taxpayer will be paying every year to service the interest on debts that were forced on them by the EU.
These are debts, reparations even, forced upon Ireland with strings attached – such as cuts to Ireland’s minimum wage – that were insisted upon, not by the IMF bogeyman, but the EU.
David Humphreys and Steve O’Callaghan at the University College Cork have noted: “Popular consensus would appear to view the IMF as a ruthless cost-cutter with scant regard for social cohesion. However, recently the IMF’s approach has evolved towards a balance of fiscal consolidation while maintaining basic social protections. The EU, in contrast, has insisted on more severe austerity measures, overriding IMF concerns, likely a matter of significant importance for Ireland.”
Over 20 months ago, it was possible to see what was coming.
“Hurtling towards [EU leaders] is the prospect that bailing out the banks has merely transferred the “toxic” contagion to nations,” this blog noted. “The coming crisis is a crisis of states not financial institutions. It will be a crisis of politics.”
There is no more telling indictment of the political elites that have created this crisis than the myth that There Is No Alternative to bailing out banks – the EU’s founding TINA principle.
The crisis is a product of human agency, the choices and decisions taken by people facing circumstances that are man-made and, thus, susceptible to political intervention.
The huge liabilities created for public budgets by the political decision, forced on the Irish, to extend loans – on top of the vast existing contingency liability of bank bailouts – were not inevitable.
There is an alternative. Governments can restructure debt. Governments do not have to borrow from private investors.
Governments did not have to overstretch themselves, creating trillions in contingent liabilities to bail out banks. These are choices that the market “contagion” is reacting to.
People who use the TINA argument have given up on politics. A political class and EU that organises policy on that basis have failed to represent the possibility of choice, of rationality.
Rationality is not a detached or abstract concept. It is based on argument, testability and evidence. It is profoundly living, human and creative. It is the fundamental basis for proper democratic politics.
Public authority that is not based on argument but on TINA lifts itself beyond argument and thus the people. Authority exercised in this manner necessarily tends to unrepresentative as we have seen throughout this economic crisis.
A poll in today’s Sunday Independent, an Irish newspaper, shows that most of Ireland, 57 per cent, supports a default, to restructure the €77.6 billion of lending to the country’s dodgy banks.
But, as the same newspaper reports, when the question of default was raised during EU-IMF negotiations “the Europeans went completely mad”.
TINA says that a default and the market turmoil surrounding the destruction of failed financial institution is too high a price to pay.
But what of price that is being paid? The huge sums, that represent the biggest policy decision in over a generation, that have been committed arbitrarily – without rational argument in the name of TINA.
Let’s remind ourselves: three years ago the “contingent liabilities” resulting from government support to financial institutions amounted to 0.3 per cent of the EU’s total GDP.
In 2009, according to Eurostat figures this spring, these obligations, which depend “on whether some uncertain future event occurs”, had risen to 10.1 per cent of the EU’s GDP. Since then the figure will be even greater.
The “contingency” is banks, whose liabilities assumed by public authorities in TINA’s name last year stood at an astonishing €1,192,271,000,000.
The true figure is larger by a two-fold, at least, magnitude, according to the European Commission
“Public money amounting to about 2 per cent of EU GDP has been injected into the financial sector in the form of recapitalisation. These measures affect government debt, but not the deficit. Moreover, guarantees to the financial sector of around 24.5 per cent of EU GDP have been approved by the European Commission, of which almost 8 per cent of GDP has actually been granted so far. Impaired asset relief and liquidity support to the banking sector, similar in nature to guarantees, amount to almost 4% of GDP (approved).”
TINA must be stopped.
#1 by aGerman on November 28, 2010 - 11:40 pm
These are debts, reparations even
What’s wrong with reparations?
Germany has been paying them for 65 years.
#2 by Alan on November 28, 2010 - 11:49 pm
So that gives them the right to revert to imperialism? Doctor Walther Funk would be proud of the EU and the way it operates, that’s for sure.
#3 by aGerman on November 29, 2010 - 1:28 am
Doctor Walther Funk would be proud of the EU
Yes, and of the new Führer Angela Teflon Merkel…
#4 by fleischwolf on November 29, 2010 - 5:05 am
Nice one!
Emmanuel Todd called this almost 10 years ago “The Sociology of Zero-Thinking” of European political and economic elites. But I’d never thought that this state-of-mind would result in a quasi-socialisation of the banking sector so quick.
#5 by Bos on November 29, 2010 - 9:35 am
Mr. Waterfield’s contribution, supposedly a plea for more political creativity and democracy, can be easily reduced to what it really is, another one of his vicious attack on all things EU.
What is his statement “the EU’s founding TINA principle” supposed to mean? Has he, as a UK citizen, still not digested the UK’s humiliation of having to ask three times to join the EU, where other European states, even Romania and Bulgaria have been welcomed with open arms? Has he still not digested that the UK’s alternative to the EU (EEC), the EFTA was a major failure, showing that it is not possible to match the economic results of the EU (EEC) WITHOUT giving up part of national sovereignty?
“People who use the TINA argument have given up on politics. A political class and EU that organises policy on that basis have failed to represent the possibility of choice, of rationality.
Rationality is not a detached or abstract concept. It is based on argument, testability and evidence. It is profoundly living, human and creative. It is the fundamental basis for proper democratic politics.”
By juxtaposing TINA (thus EU) with human creativity and policy choice, he is implicitly picturing the EU as a subhuman totalitarian entity.
Unfortunately for Mr. Waterfield, what he writes is completely opposed to long standing consensus in behavioural and psychological sciences.
The human being is creative, precisely because it is NOT rational. A human being does not have the cognitive capacities to absorb all the necessary information to make the ‘rational’ decision (rationality implying access to complete information). Precisely BECAUSE a human being cannot hold all information it has to make choices. If it were rational, there would only be one single option: the rational one.
Now I am not malevolent, so let me suppose Mr. Waterfield is unaware of the nonsense he writes, in which case he should google ‘hyperrationality’ and read up on it.
Even than, Mr Waterfield is subconciously masquerading his emotional anti-EU feelings behind a facade of “plea for rational politics”
Still one should congratulate Mr. Waterfield, a most cunning fox indeed, having convinced someone into paying him for the things he writes!
#6 by Roger Cole on November 29, 2010 - 10:40 am
As an Irishman living in Ireland I am very pleased that Bruno Waterfield, a senior EU political correspondent, is calling for rationality and democratic politics. Virtually all the Irish political correspondents over the last few decades have been little more than fawning sycophants of the Irish political elite, led by Fianna Fail which has now just agreed a deal that in effect means the Irish people face decades of poverty in order to ensure the major bondholders, the German and French bankers share no pain whatsoever despite their responsibility for reckless lending. Bos should remember that there is only so much the Irish people can give, there is only so much we can take. Having been forced by the EU elite into reversing our first no to Lisbon on the promise of jobs and prosperity, the Irish have been rewarded with the status of de facto slavery. Bos should remember the 1916 Rising. The spirit of that rebellion has not disappeared and will rise again. We fought and defeated the British Union, an Empire on which the sun never set. We will not now bend the knee the European Empire, and this time the British people will fight shoulder to shoulder with us
#7 by Heather on November 29, 2010 - 11:31 am
I understand the outrage of the Irish because the debt they will have to pay off is not the result of the extensive benefits provided by the government as was the case in Greece. This is a strange kind of solidarity when even the poorest people have to tighten their belts to pay for the irresponsible behavior of the Irish banks.
#8 by Steve McGiffen on November 29, 2010 - 11:49 am
Nice comment from aGerman. Maybe he could let us know who Ireland invaded, how many Jews and Gypsies they gassed, etc, then we can fix their reparations accordingly.
#9 by Freeborn John on November 29, 2010 - 1:19 pm
Bos said (5): “If it were rational, there would only be one single option: the rational one.”
This (monism) is an old idea; the belief that there is a single harmony of truths into which everything that is genuine must fit. Its opposite is pluralism, the belief that there are multiple values which mankind holds dear; liberty, equality, environmentalism, EU-federalism, etc., and that these values can clash with one another without being ‘wrong’.
Liberalism follows from pluralism, authoritarism from monism (where only one set of values is true) and anarchism from relativism (my values are mine, yours are yours, and if they clash then neither of us is right). The multiple values that mankind holds dear are not irrational; one should be able to understand the other’s value system, while still disagreeing profoundly with their priorities. And that is why we need a plural political process to prioritise these differing but rational value systems when they clash with one another. One cannot simply condemn the other’s position as irrational as a prelude to imposing one’s own.
The monist invariably believes that those who know the ‘real truth’ should command those who do not; that the world would be a better place if philosopher-kings or scientists, or technocratic specialists who know this One Truth were in charge of things. Sometimes the monism is a thinly disguised lust for power, predicated on the belief that they know best and deserve to get their way. Whatever the psychological well-spring, the monist exhibits a marked tendency to believe that coercement of those who disagree with their preferred ‘ism’ (e.g. socialism, fascism, communism, euro-federalism, etc.) may be unsavoury but is ultimately worth-while; that it is ultimately necessary to ‘break a few eggs’ to create their ideal world omelet.
The monist therefore has an in-built tendency towards authoritarianism. The experience however, not least in Europe, is this authoritarian streak in the monist tends towards a despotism on the part of an elite which robs the majority of its liberties. Euro-federalism crossed this threshold when imposing the EU Constitution / Lisbon Treaty despite losing the public debate and popular referendums.
#10 by Rick Daudi on November 29, 2010 - 2:25 pm
I agree with Freeborn John above, except for the last bit. The constitution/Lisbon thing was not forced against popular referendums and judging by the length of it, it’s certainly not monistic or authoritarian.
I find very little logic in the idea that the EU is an authoritarian ‘empire’. Rather, I think its many flaws are what you would expect from a compromising technocratic bureaucracy born out of pluralism.
#11 by demotalk on November 29, 2010 - 2:51 pm
People, rejoice! my dentist ( Belgian and Belgium is on the list of PIGS, so we’ll have to add PIG +B to PIG + S) told me that debts will be taken care off and that the have-ones will be plundered! Finally a welcome opinion. “He” looked rather unhappy while I was pondering on his rating of my hurting tooth. Unfortunately, I don’t believe him. This is a financial whirlpool like our washing-machines or worldwide wasserettes have never seen. Put your money in, it’ll never come out.
You’re in it, you’re done, back to slavery. What a wonderful world…
#12 by Freeborn John on November 29, 2010 - 7:17 pm
Rick Daudi (10): The Brussels supranational institutions and decision-making method were designed from the beginning to put free trade within the EU customs union beyond the realm of democratic politics, insulating free trade from ‘populist’ pressures and enshrining single market rules in a body of EU law higher than national which no voter can influence. The EU is therefore the antithesis of political pluralism, locking policies agreed by one generation of politicians into place no matter who you vote for in future. What Lisbon does is extend the supranational community method (renamed the ‘ordinary legislative procedure’) into all manner of political policy areas that should only be decided by the political plural process of the democratic nation-state and for which the undemocratic-by-design Brussels process is totally unacceptable.
Furthermore, it is a matter of fact that the EU Constitution & Lisbon were defeated in referendum in several countries, the results ignored, and referendums in other countries cancelled in the certain knowledge of what the result would be. Lisbon represents a putsch by euro-federalists to empower political institutions in Brussels which the majority of people in every European country would have voted not to empower. Those institutions therefore sacrificed their legitimacy with the imposition of Lisbon and must now be dismantled.
#13 by french derek on November 29, 2010 - 7:51 pm
So, 57% of Irish polled think that default and restructuring of Irish debts (ie mainly banking debts) would solve their problem? And Bruno reckons this is the appropriate action that the irish government should have taken – regardless of the rest of the EU.
Well, it is the “rest of the EU” that matters just as much as the Irish debt. It is being repeated often that the EU heads of governments do not understand the markets. The same might be said of Bruno. How do you think they might react to an Irish default? And that’s leaving aside the mechanics of quite how one Euro nation could default alone.
#14 by Victor on November 29, 2010 - 10:58 pm
Why not just openly advocate for Irish default and withdrawal from the eurozone, and in the process from the whole undemocratic EU as well?
It is easy to focus on the negative consequences of the adjustment package, while not explaining the effects of the proposed default and devaluation.
Ireland benefited from billions in cohesion funding which allowed it to develop while keeping low corporate taxes.
It benefits from the (British hated) common agricultural policy.
Ireland´s problem is its property bubble, just like in the US, UK and Spain. The UK is also cutting spending and it is not in the eurozone.
Ireland´s problem is bad banking, just like in Iceland, the UK and US. Iceland also applied for IMF aid and it is not in the eurozone.
Making any distinction between the EU and the IMF is not only contradictory but also absurd, as the EU and the US effectively control the IMF.
The problem is not TINA but that the alternatives that are proposed would be even worse for the Irish economy.
The world already allowed the failure of banks and it led to the Great Depression.
These “radical” ideas are useless. How would Ireland function if all its banks went bankrupt.
Unless one openly advocates for some sort of revolution in which bank held debt is valueless, I fail to see what the proposed solution is.
#15 by George on November 30, 2010 - 11:35 am
We know from history what the ramifications of defaulting on debts can be. The 1930′s are not a good advert for those, such as Bruno, who advise this course. I see no reason why defaulting would not again cause horrible repercussions for all concerned, including the Irish. That is not to say that I am entirely against some controlled defaulting, this being a way to exact a small measure of justice against those who arguably caused the problem in the first place, namely the bond holders. But blanket default is such a bad idea its not worth even considering.
Far better to bailout. If in the end it proves impossible for Ireland to pay back these loans, then the debt can be restructured again at even lower rates, or even partially written off against the EU budget. There’s a lot of structural funding standing idol at the moment for example. Basically a bailout gives one a lot of options and a measure of control over the situation that protects from systemic collapse, defaulting has none of these virtues.
#16 by Betterworld Now on November 30, 2010 - 1:31 pm
All, not 50%, of this mess was caused by the ECB. All of the bail out should therefore now fall on Jean Claude Trichet’s plate.
For two decades, the ECB acted as if Ireland didn’t matter and that only the German economy had to be protected (by super-low interest rates) for the good of the Euro.
Well, it matters now.
The ECB forced Ireland to deregulate its banks. It then forced them to accept interest rates that were too low. When the Irish Central Bank and Irish government told the ECB interest rates were too low they lowered them further.
It was stupid to save at negative interest rates when you could borrow at positive rates, thanks to the ECB. In its defence, the Irish government introduced three major national policies to counteract the ECB’s insanity:
1) a 5-year Savings Bond incentive,
2) a National Pension Reserve Fund and
3) massively paying down the national debt.
What more could it do? Constraining lending by Irish banks would have just opened them up to unfair competition from European banks which they could have reversed in the European courts (with ECB support, no doubt).
Running the Euro as a German currency has lead Ireland into collapse, and with them Portugal, Spain, Italy and Belgium. Now it is time to pay the bill for that warped policy. As the major beneficiaries of ECB policy for the past two decade, it makes sense for the Germans to do the heavy lifting on the Euro bail-out.
Sacrificing the Irish is a reversal of all principals of solidarity on which the European project is founded and a sure recipe for the break up of the EU and the collapse of the Euro.
In any post-Euro scenario, a new DM would appreciate hugely against other currencies depriving the Germans of the unfair advantage its exports acquired under the Euro umbrella and rebalancing its trade surplus. German output would plummet and German unemployment would accelerate exponentially.
Your move Mr Trichet.
#17 by Freeborn John on November 30, 2010 - 2:10 pm
I always find it strange that the same people who walked into banks to apply for mortgages, bored everyone within earshot rigid at dinner parties about the rising value of their house, or who refinanced the mortgage to pay for cars or exotic holidays now blame ‘the bankers’. “It wasn’t me, the bankers made me do it!” they cry. “it wasn’t me, the regulators should have prevented the bank lending to me”. “I shouldn’t have to pay this back, the ‘greedy bankers’ should take a ‘haircut’”
Ireland is a fully-worked real-life example of the ‘Walters critique’ of EMU, an argument that was decisive in persuading Thatcher and Brown that Britain would go broke in the euro. Rather than blame the ‘greedy bankers’ Irish people should blame those who voted Yes to Maastricht because it was that decision which led directly to national bankruptcy.
#18 by Michael on November 30, 2010 - 4:25 pm
No they have not. The stopped paying them for many moons ago and only restarted upon reunification.
And it was reparations that were forced on Germany that caused WW2.
The only solution here is massive QE, because Irish tax payer is not going to pay for the rescue of German banks. An election is around the corner and if the Communist b*stards in Sinn Fein get into power you will be happy to know they will raise corporation tax, but they will also default completely with no remorse and lets not forget the fact that they have guns and bombs tucked away for a rainy day.
While the Germans may not perceive this as a genuine threat, they must remember that Spain is a big country and their tax payer won’t like it either.
#19 by Bruno Waterfield on November 30, 2010 - 5:40 pm
There is always an alternative. The blanket bailout of banks has not stopped a 1930s crash (yet) and has so far just transferred to instability to the level of states.
This from Bloomberg
http://bit.ly/gB26Sd
Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.
“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”
Iceland’s banks, which still owe creditors about $85 billion, were split to create domestic units needed to keep the financial system running, while foreign liabilities remained within the failed lenders.
As a consequence, “Iceland is faring much better than anybody expected,” Grimsson said. The Icelandic state’s liability on foreign depositor claims stemming from Icesave accounts at failed Landsbanki Islands hf should be put to a national referendum, he said.
“How far can we ask ordinary people — farmers and fishermen and teachers and doctors and nurses — to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”
#20 by french derek on November 30, 2010 - 7:30 pm
It’s a clever idea (to let the banks go bust) BUT a large part of the “private” investments to be hit would include fellow EU banks. eg German and UK banks are the largest creditors of Irish banks I believe.
The UK banks and their customers have already taken a hit from the Iceland bank failures – would they stand idly by if the same happened in Ireland?
Having said that, I might agree with President Grimsson in his remarks about “ordinary people”. However, FBJ did remind us that “ordinary people” in Ireland were just as much responsible for the mess …..
#21 by Victor on November 30, 2010 - 8:57 pm
Isn´t a controlled default what the Eurozone/Ecofin just approved for bonds after 2013?
A credible reform is better than a “fancical” revolution.
#22 by Bruno Waterfield on December 1, 2010 - 11:16 am
@french derek
The reason why Ireland has been forced into the bailout is because of the ECB and wider exposure, it’s a kind of protectionism in fact. This why an orderly default for senior bank debt and economic restructuring remains, note that word, the answer to the economic crisis. The EU’s position on banks – which essentially defends the big countries – has driven Irleand into penury and destroyed its sovereignty. Irish people did not cause the crisis – that’s a bizarre reading of events – owning a mortgage or living in a country where there is a asset bubble (driven by low euro zone interest rates) doesnoy make individuals responsible. FBJ obviously believes in a kind of economic original sin.s
@Victor
The ESM is very far from haircuts, and the steps are convoluted, but better than nothing, I suppose. It is also for sovereign debt in 3 years time (defered to an indefinite future) not senior debt in banks now, evading the problem which is driving the crisis. We get back to the beginning banks need take a hit, not total destruction (see Iceland) so the economy and public finances are not burdened to breaking point. Let’s have some creative desturction not the moral hazard of cowardly, subsidy seeking euro-capitalists and banking oligarchs.
#23 by Freeborn John on December 1, 2010 - 12:22 pm
Bruno: You will not find a stauncher defender of democracy than me, but democracy is only useful in choosing between morally legitimate courses of action; it cannot legitimate the immoral. Signing a mortgage deed to borrow money and then later deciding not to pay back ‘the greedy bank’ when the investment turns sour is wrong. It does not matter if 50%+1 of Icelanders vote not to pay back the money they borrowed from overseas banks. Theft is theft, and voting for it does not make it right.
The sole purpose of Ireland leaving the euro, devaluing and converting existing debt and assests into the new currency should be to restore growth to the Irish economy, and eventually solve the negative equity problem that is the mirror image of the NAMA bad bank debt. Staying in the euro means a decade of deflation just to catch up with previously lost competiveness, then matching all future rises in German productivity indefinitely while carrying a burden Germany does not, i.e. the 20% of the tax take that must be spent on interest alone. That would actually leave the NAMA bad debt problem untouched, and likely make it worse if house prices were to fall further under the implied austerity conditions. Better the debt be converted into a new Irish currency and the domestic inflation that undoubtedly exists in Ireland be harnessed to watering down the negative equity / NAMA debt over time.
#24 by Betterworld Now on December 1, 2010 - 1:06 pm
At 6.7% interest and in the context of a shrinking economy, the Irish debt is not only unpayable, it is uncollectable. Default is inevitable, the only question is timing.
The German and British banks will be better able to accept the shock if it happens soon, the longer they wait, the more unstable the Euro will become and the less credible their declared capitalisation appears.
Trichet is in denial about the issue hoping to “kick the can down the road”. But the markets aren’t buying it. They know that, at this interest rate, default is inevitable and carries with it unknowable consequences for the Euro.
If the ECB were to reduce the Irish interest rate to, say, 3%, then there might be some credibility that default could be avoided. Trichet can sell this as part of a Euro stability measure – and include all other Eurozone countries in the same interest rate deal, in effect initiating “quantative easing” in the Eurozone.
That should be enough to calm the markets and remove the threat of a domino of sovereign defaults.
The Irish deal is a bad mistake by the ECB which is new to the sovereign bailout process. At least the IMF are aware of the issue (having learnt from past failures) and are charging considerably less interest than the ECB. The ECB still thinks that the German economy is its primary concern, when the real game is the Euro.
This is a thoroughly abysmal performance from Trichet who’s days have got to be numbered.
Remember that, with an Irish general election possible at any instant, Irish voters are poised, ready and only too willing to deliver the shock that the ECB is unwilling to contemplate. The election of a radical left wing government composed of Labour, Sinn Fein, Left Alliance and Independents is entirely possible under these conditions. The traditional Irish neo-liberal centre-right landscape was only sustainable under conditions of increasing, or the promise of increasing, prosperity. That cosy paradigm has been undermined by Trichet’s arrogance and denial. The obedient Irish voters have consistently done whatever Trichet and his neo-liberal elite have told them to do on the promise of jobs, stability and prosperity. Trichet has double-crossed them and condemned them to tin-pot third world status. He can’t expect sympathy. In the privacy of the ballot box, he is unlikely to get anything but untrammelled anger.
Perfidious Albion has been replaced by Perfidious Europa. Reap the whirlwind.
#25 by Roger Cole on December 1, 2010 - 2:20 pm
As one of those Irish people that FBJ and French Derek I understand where they are coming from. However, if they had lived in Ireland over the last decade or so, I am convinced they would not say what they did. It is only by living in Ireland can one be aware of the total dominate control of the Irish political/media elite by EU Empire Loyalists (the DT only sells 1-2,000 copies) that was exemplified by their decision to force the people to reverse their decision to reject the Lisbon Treaty and the Taoiseach’s call upon those that did not agree with them to go and commit suicide. The political elite of Fianna Fail were responsible to the banker and speculator who paid their election expenses. Ordinary Irish people in Ireland excluded from power. The polls however now show that the upcoming election will see the virtual destruction of FF, and I assure you that if the incoming FG/Labour Party are not successful in ensuring that the rich Irish elite (40% of the wealth in Ireland is owned by 5% of the people) and bondholders do not shoulder some of the burden as BW then a much more radical government in inevitable.
#26 by Victor on December 1, 2010 - 6:25 pm
How exactly do you propose to finance then the outstanding Irish structural budget deficit after defaulting?
The cuts that are being asked of Ireland are not more onerous than the ones imposed on Latvia and Romania (which are outside the eurozone).
As for the the whole default argument, again:
Default in Today’s Advanced Economies: Unnecessary, Undesirable (IMF Staff position note)
http://www.imf.org/external/pubs/ft/spn/2010/spn1012.pdf
Markets Significantly Overestimate Risk of Advanced Econ Default
http://imarketnews.com/node/18592
For the causes and levels of Irish deficit:
http://www.taoiseach.gov.ie/eng/Government_Press_Office/Government_Press_Releases_2010/The%20National%20Recovery%20Plan%202011-2014.pdf
#27 by french derek on December 1, 2010 - 6:57 pm
@Roger Cole I accept what you say about not living in Ireland. It is always easier to look over the garden wall and comment on a neighbour’s failings than to look on your own. All that I was comparing was the comparative difficulties of gaining a mortgage in Germany or France with those of Ireland (as reported).
Perhaps the real problem is that the solutions to the banking crisis were politically driven rather than economically driven. But then, so were the causes: ie too loose controls on the banking system (as Ireland and the UK).
In other words, the size of the current economic problem is “home-grown”. Ireland are not alone in that, though.
#28 by Alan on December 2, 2010 - 9:10 pm
What “logic” are you applying? We’ve had two prominent EU politicians call it an empire (Jose Manuel Barroso and Otto von Habsburg). The government is styled exactly like the governments of the USSR and PRC, i.e. apart from the one-party system; the Commission (appointed; compare Politburo) makes all the laws and passes them (no separation of powers) and the unicameral Parliament (compare actions of Supreme Soviet and National People’s Congress) acts as its rubber stamp and has no legislative initiative at all. Logic points to this being an authoritarian empire, especially when the application of their decrees is fleshed out.
The monism is explicit in the phrase “ever closer union” found in every accession treaty (this technique of using treaties came straight out of Bismarck’s playbook; he also grew the German Empire by a succession of treaties) and in the EU slogan “Many tongues, one family”. The Charter of Fundamental Rights bears yet another similarity to the Soviet Union, where the rights are given by the government and can be taken away by the government at will, instead of the rights residing with the people. Note further how the EU outlawed such basic rights as habeas corpus by allowing trials in absence. Also, the treaties force one type of economy (the Soziale Marktwirtschaft) and a single currency on everyone (which is why I mentioned Dr Walther Funk earlier).
#29 by zeleneye on December 13, 2010 - 10:13 am
You’ve almost got it right Bruno. However, your frothing, rabid opinion on the EU blinds you to the real cause of TINA, which has nothing to do with “the EU” as an entity.
The cause of TINA – as you elude to – is a corrupt political elite that is in the pocket of big business (in the case of this crisis in the pocket of the banks). This political elite has been democratically elected in all of the member states, so it is not your bogeyman EU that is to blame.
Merkel, Cameron, Sarkozy…these are the people who created and perpetuate the TINA doctrine. Until we recognise that – and find a way of dealing with it (i.e. by ensuring these people are democratically removed from office and not replaced with more of their ilk) – we cannot move forward.