If this comes into place and is retrospective, should that solve the sovereign debt issue? My understanding is the bank debt became sovereign debt but if that's removed, surely a massive burned is lifted off us the taxpayers?
If this comes into place and is retrospective, should that solve the sovereign debt issue? My understanding is the bank debt became sovereign debt but if that's removed, surely a massive burned is lifted off us the taxpayers?
Does anybody, anywhere have an answer to that legendz? I think that, in theory, the deal would take some of the sovereign debt burden from the state and put it back onto the banks. The problem is everything is so speculative: Finland and the Netherlands are unwilling to commit to the deal; Merkel (according to Drivetime on R1 yesterday) made a speech in parliament that suggested Germany would attach so many conditions to the deal that it would not be as attractive as people thought; and the 'markets' - the collective noun for a group of meddling, menacing, braindead, panicky a***holes - haven't yet had their usual meddling, menacing, braindead, panicky a***hole response.
Meantime, we live in hope.
The "Enda Did It" and "Ireland Did It" lines in the Oirish press drive me demented. It was no more driven by Enda or Ireland than my 10 month old's ability to fart.
It looks positive, but I'd wait to see the details. Politicians agreed it at the EU meeting, and then have to go and talk to their own constituents. I doubt the "conditions" that Merkel is talking about really apply to those countries already in a programme (who are working to severe conditions), but more at the Spanish and Italians who seem to want it condition free. Also I thought the Dutch and Finnish objections were to the support of the bonds rather than the seperation of the bank debt?
It's pretty clear we're too small a fish to drive this thing, but happy enough we're named as a potential beneficiary. The blanket guarantee of the banks was always the problem (and basically forced other states to do the same, thus helping cement the link between banks and soveriegn) - don't ever forget that legacy of FF when martin and co are out bs-ing.
It's good that bank debt and sovereign debt are now separated, and is the ultimate acknowledgement that Merkel's daft policy of channelling bank aid through state governments has failed.
But we still have a huge sovereign debt that has to be corrected on it's own. Therefore in the short term at least, there'll be no change to the austerity we're facing.
Part of the deficit is interest on the bank debt, so a separation of the bank debt will help that. Plus the separation would make it more likely we can exit the programme, which would give us more control (albeit still not free reign) over our budget process.
Did I read someplace this morning that the Irish are to be subject to "special treatment" by the Germans!! Run for cover....
It's not even clear if we've secured a deal in principle - saying that Ireland is "unique" and "a special case" is just diplomatic speak for "We know you're not in as much trouble as Spain or Greece", and Merkel cleverly managed to commit Germany to precisely nothing on Sunday. Hollande wants to federalise the debt problem, but can do nothing on his own, so amid the smoke and mirrors, we'll likely just see minor tinkering with the Anglo promissory notes in 2013.
Are we not in as much trouble as Greece or Spain? Here's a fairly worrying article which we're worse than them; essentially, we're just not as far down the line as yet. There are a fair few similar articles out there (you'll find links to a few on thepropertypin.com)
And there's as many contradictoary articles saying we're easily doeing the best of the PIIGS and we're likely to leave the programme first
If the pat 5 years has proven anything, its that economists are complete bluffers. Some will get it right, but more will get it wrong