Tag Archives: austerity

Euro deal saves Ireland? Maybe…

It’s not clear that it does. I’m not sure it’s a seismic (Enda Kenny) or massive (Eamonn Gilmore) deal. And it happened because of Spanish and Italian pressure.

So far as we can see at present there are three parts to this. The Spanish banks will be recapped directly from the EFSF and later the ESM (assuming there is one…) which will not have formal super senior status but will be more like the IMF and have quasi senior status. The ECB will get an enhanced supervisory role. Crucially for Ireland the deal also suggests that similar cases will be treated similarly. But there is no explicit retrospection.

We have spent, in very rough terms, 30b on Anglo promissory notes, 20b from the then National Pension Reserve Fund in direct bank recaps and about 12-14b more in other recaps, bailouts etc which forms part of the explicit borrowing now subsumed under the troika bailout..

We will not get that 20b back. It’s gone. We might, but it’s not clear, get a deal on the prom notes, but the mood music is that at best this quasi state debt will be converted to very much state debt albeit repayable in a manner that costs less per annum than the 3b cost of prom note redemption. We might or might not get a deal on the 12b, but there is no “Irish state bond for recapping banks” out that can be redeemed. So this would have to be dealt with as part of a general state debt not bank debt deal, which seems not to be o n the cards.

It’s a soda stream not a champagne moment.

Proximity and distance

A powerful, erudite and timely polemic

Ireland after NAMA

This crisis is inherently spatial. Where should the axe fall? Where will sovereignty be located? What shape should society take now, or in the future? However, these questions of ‘whereness’ or spatial form are by no means the only spatial issues we need to consider. There are also all sorts of issues to do with proximity and distance. Take a story in today’s Irish Times. Christine Lagarde has been in Latvia telling the people there that their austerity has been worth it; that toughing it out is for the best. And in the process she’s telling everyone else – people far from Latvia, such as people here in Ireland – to look at their example and get on with the suffering.

Lagarde can easily say such things. She hasn’t (although please correct me if I’m wrong) had to endure much austerity in the last few years. Like her fellow IMF…

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