Thursday, 13 October 2011

Fascinating overview of the financial crisis - An American viewpoint

Fred Magdoff presented a view of the European financial crisis at the Desmond Greaves Summer School in Dublin.

This podcast is from the web site of Conor McCabe, author of Sins of the Father, his book on the background to the Irish financial crisis.

Conor will deliver the Raymond Crotty Memorial Lecture for 2011 in the Pearse Centre (27 Pearse Street), Dublin, at 2:30 p.m. on Saturday 15 October.

Wednesday, 12 October 2011

Emerging Economies to rescue Europe?

The emerging economies of Brazil, Russia, India, China, and South Africa—the so-called BRICS countries—which hold huge international reserves, are planning to come to the EU’s aid!

The Brazilian minister of finance, Guido Mantega, said that the BRICS states held a meeting on 22 September to discuss the co-ordination of an EU rescue plan. “We met in Washington to decide how to help the European Union to get out of this situation,” he said. The countries are considering substantially boosting their holdings of euro-denominated bonds in their foreign exchange reserves.

Tuesday, 11 October 2011

No cancer drugs for fiscal sinners

The reality of austerity

The European Commission has said that its austerity measures are not to blame for a decision by the pharmaceutical giant Roche to halt delivery of cancer drugs to Greek public hospitals. In a fresh example of how the EU austerity measures are having an acute impact on citizens, the Swiss firm has halted shipments of cancer drugs and other medicines to a number of public hospitals in Greece after years of unpaid debts. The company warned that Italy, Portugal and Spain might be next.

With Greek spending on health care accounting for 10 per cent of GDP, the EU, the IMF and European Central Bank have told the government to cut at least €310 million this year and an additional €1.43 billion in the period 2012–15. In February this year doctors and other health-care workers marched on the Greek parliament in protest over health cuts and scuffled with the police.

Meanwhile the European Commission is keen to wash its hands of the problem. “It’s a commercial decision from a company,” the Commission’s spokesperson on health, Frederic Vincent, said. “We would have to see if the countries make any specific request if this problem is conferred to Spain, Italy, Portugal,” he said.

It’s a question of budget management by the Greek authorities. “Greece has money,” he explained. “The financial assistance package decided one year ago covers the financial needs of the Greek state. Then how this is micro-managed is the full responsibility of the Greek authorities.” He added that the case would be the same if the drugs dry up in Spain, Italy, and Portugal—and presumably Ireland.

Monday, 10 October 2011

You are entering... tHe EuRo ZoNe...

Seven EU members that joined the European Union between 2004 and 2007 are concerned about an obligation to adopt the euro under the terms of their accession and could stage referendums to change their accession treaties, AFP has reported, quoting diplomatic sources.

Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania said the euro zone they thought they were going to join, a monetary union, may very well end up being a very different union, entailing much closer fiscal, economic and political convergence.

The new EU members that joined during the period 2004–07 are all obliged to adopt the euro under the terms of their accession treaties. Of these, Slovenia, Malta, Cyprus, Slovakia and Estonia have already joined the euro zone. Countries from previous enlargement waves are not obliged to adopt the single currency.

“All seven countries agree to state that a change in the euro zone’s legal status could change the conditions of their adhesion treaties,” which “could force them to stage new referenda” on adopting the euro, said a diplomatic source close to the talks.

Before the euro-zone crisis several new members that have been close to fulfilling the Maastricht criteria for joining the euro zone, including Poland and Bulgaria, had set themselves ambitious plans to speedily join the common EU currency. More recently, several Polish officials have stated that the country has shelved its plans for early accession to the euro zone, until it becomes clear what future should be expected for the common EU currency.

Last April, Hungary indicated that it would seek an opt-out from the euro. More recently the Czech president, the Euro-critical Václav Klaus, said that the EU currency club was a “failure” and that his country should get a permanent opt-out from its obligation to adopt the euro.

Sunday, 9 October 2011

Croatia finalises accession negotiation

Eight years after Croatia’s initial application to join the European Union, member-states have agreed on the wording of the 350-page treaty spelling out the legal obligations and rights stemming from membership.

Croatia will become the EU’s twenty-eighth member on 1 July 2013, provided ratification is completed in all member-states by then.

Unlike Bulgaria and Romania, which joined the bloc in 2007 but were kept under a ”safeguard clause” that could have delayed membership by one year, EU states “have full confidence in the Croatian authorities” in tackling corruption and organised crime and in upholding human rights, a source in the Polish EU presidency said.

But with general elections scheduled for 4 December, days before the official signing of the accession treaty, Croatian politics is already heating up, with the prime minister, Jadranka Kosor, in facesaving mode after her party’s accountant was arrested for corruption.

“This is an orchestrated campaign to minimise the [ruling party] HDZ’s chances in the upcoming election,” she said in a press conference. “They want to create the impression that we’re all the same, that we’re all dirty, that there are factions fighting amongst themselves in the HDZ.”

Saturday, 8 October 2011

Indebted states should be made “wards” of the Commission or give up the euro

Not from Holland with Love

The Dutch government has proposed that highly indebted states should be put into “guardianship,” with spending decisions seized from their elected governments and placed under the direct control of an unelected European commissioner.

If a state is unwilling to surrender its sovereignty in this way, then it would be forced to exit the euro.

“If a country repeatedly overspends in breach of EU stability pact rules, this commission overseer would be able to intervene directly in the running of the country, in a similar way to how a court intervenes in the running of a bankrupt firm put into receivership. We propose to take a great new step forward by forging effective rules to be strictly enforced by an especially appointed commissioner.
This is how we must safeguard the heath and viability of the euro zone and all its members for now and in the future.”

The commissioner would be given a “ladder of intervention,” under which the level of control of the state would be steadily ratcheted up and applied to this “ward” of the EU executive.

The first rung of the ladder would involve an outside auditor making adjustments to spending to bring down the level of the deficit. If this level of intervention is insufficient, binding measures would be imposed, or the commissioner could order a country to cut spending or to raise taxes.

The last rung of the ladder would see a country placed under “guardianship.” The auditor would then draft a budget for the country before sending it to the national parliament for approval. Such states, described in the paper as “notorious sinners,” would also lose their voting rights in the EU, and the delivery of European structural funds would be dependent on compliance with the orders of the commissioner.

Friday, 7 October 2011

From Russia With Love

Cyprus, a member of the euro zone, is seeking external aid in propping up its finances. But, unlike the EU and IMF bail-out packages, its loan is to come from Russia, with “no strings attached.” 

The minister of finance, Aleksei Kudrin, confirmed that Russia is at an advanced stage in negotiating the rescue package with Cyprus. “Italy has not approached us,” he said -

“Eurozone countries have not approached us in general . . . At the moment we are holding talks only with Cyprus. We have good progress [in the] talks. They will conclude within one month.”

The largest-circulation Cypriot newspaper, O Fileléftheros, reported earlier that Russia will give Cyprus a €2½ billion loan at an interest rate of 4½ per cent. A €1 billion tranche is to be paid in December, and two other payments are to be made by March 2012. Quoted in the Financial Times on Wednesday, the Cypriot minister of finance, Kíkis Kazamías, said the money will be used to plug the country’s budget deficit and to help refinance maturing debt, €1 billion of which is due for repayment in early 2012.

He said that the deal is “a friendly agreement, with no strings attached,” in contrast to the onerous austerity and reform measures demanded by the EU and IMF from other euro-zone bail-out states.

Thursday, 6 October 2011

Plans for an EU military command centre

Five of the biggest EU countries have tasked the EU high representative for foreign affairs and security policy, Catherine Ashton, with making plans for an EU military command centre, despite British objections (and Irish silence).

Foreign ministers of the group—France, Germany, Italy, Poland, and Spain—urged Ashton to

“examine all institutional and legal options available to member states, including permanent structured co-operation, to develop critical CSDP [common security and defence policy] capabilities, notably a permanent planning and conduct capability.”

They added:

“We would appreciate [it] if you present conclusions of the work . . . with a view to achieving tangible results by the end of the year.” 

“Permanent structured co-operation” is an EU treaty option that allows nine or more member-states to press ahead on a project without the others, even though it would use the structures of the EU institutions. The initiative is a long-cherished one by Poland and France, which wants to go beyond EU battle groups—temporary teams from two or three EU countries ready to be sent to hotspots at short notice—towards an EU army.

The United States has said in the past that it wants the EU to do more in managing world crises. But the group of five risk angering Britain, the EU’s biggest military spender, which forcefully criticised the idea.

Wednesday, 5 October 2011

Ireland has undergone first “audit” of national debt—results “truly frightening

An idea borrowed from developing countries and recently used to good effect by the Ecuadorian government has now been applied to the Irish debt.

Ireland has undergone its first “audit” of national debt—the results of which have been called “truly frightening.” The report, An Audit of Irish Debt, was commissioned by Afri, the Debt and Development Coalition and the trade union Unite and carried out by a team from the University of Limerick.

The report calculates a potential national debt of €371.1 billion. This figure includes a “conservative” estimate of the state’s contingent liabilities: money for which the state is on the hook in the event of a fresh collapse in the banking system. The €371.1 billion breaks down into €91.8 billion in direct Government debt and €279.3 billion in bank debt backed by the state.

Dr Sheila Killian of the University of Limerick, who led the research, said the audit “seeks to quantify and explain Ireland’s sovereign debt, both real and contingent, for which the Irish people have become responsible”. 

Frankly weird

The report concludes that the “constructive ambiguity” of the European Central Bank’s policy on bank bail-outs is “certainly not a concept consistent with transparency,” and it addresses what Dr Killian describes as “quite intricate layers of anonymity” in relation to bond-holders. The long-standing anonymity of bond-holders “has some justification” in normal circumstances; however, in times when bond-holders have influence on policy it is “frankly weird,” she said.

The €279.3 billion in bank debt includes €111 billion in guaranteed deposits and bonds under the Eligible Liabilities Guarantee Scheme, as well as €74 billion under the Deposit Guarantee Scheme. It also includes the €30.9 billion in promissory notes issued to Anglo-Irish Bank, Irish Nationwide, and the EBS, outstanding NAMA bonds with a nominal value of almost €29 billion, and a net increase of €34.6 billion in the national debt caused by emergency liquidity assistance provided by the Central Bank. The figures contain the caveat that a large part of the €91.8 billion raised by the Government was due to the banking crisis.

A crucial citizen's tool

Explaining the genesis of the audit, Neasa Ní Chasaide of the Debt and Development Coalition said that audits were “a crucial citizens’ tool” that had been used in campaigns against unjust debts in developing countries. In November 2008 Ecuador became the first country to undertake an examination of the legitimacy and structure of its foreign debt. An independent debt audit commissioned by the government of Ecuador documented hundreds of allegations of irregularity, illegality and illegitimacy in contracts of debt to predatory international lenders.

The loans, according to the report, violated Ecuador’s domestic laws, the regulations of the US Securities and Exchange Commission, and general principles of international law. Ecuador’s use of legitimacy as a legal argument for defaulting set a major precedent; indeed, the formation of a debt auditing commission sets a precedent in identifying illegitimate debt.

Subsequently, in June 2009 Ecuador announced that it had reached an agreement with 91 per cent of creditors to buy back its debt for 35 cents in the dollar.

If only!

Tuesday, 4 October 2011

Don’t try bunga-bunga with Standard and Poor’s!

Italy is the latest country to have its sovereign debt rating cut, further deepening the debt crisis. The rating agency Standard and Poor’s cut Italy’s rating from A+ to A, describing the outlook for the country as “negative.” The agency cited fears over Italy’s ability to cut state spending and bring its finances in order.

Silvio Berlusconi immediately attacked S&P, describing the agency’s actions as being “dictated more by newspaper stories than by reality.” But could there be any link to Berlusconi’s government having already taken action against the agency, with the Italian police raiding the offices of S&P last month?

Berlusconi’s move last week to reduce Italy’s deficit by €54 billion through a raft of austerity measures has done little to boost investor confidence and is increasingly unpopular with Italians, having triggered large street protests in Rome.

Monday, 3 October 2011

Good riddance, Herr Stark!

The unwelcome intervention by Jurgen Stark, departing member of the Executive Board of the European Central Bank, in Ireland’s budget debate, calling on the Government to cut public-sector pay and social welfare, displayed an extraordinary arrogance on the part of an unelected German official. His intervention met with an uncharacteristic rebuff from Éamon Gilmore that underlined the anger felt even in pandering Government circles. “Our agreement is with the institution,” Gilmore told reporters. “It’s not with individuals within it.”

Since the beginning of the year Ireland’s sponsors in Europe and the IMF have approved the release of loans totalling €30½ billion. Tens of billions more are to come. Stark warned that sentiment could suddenly turn against Ireland all over again. To guard against that, he said the Government should quicken its austerity drive and tackle no-go topics such as public and private-sector pay and welfare entitlements.

In doing so may simply have been a stalking horse for the EU and IMF—an influential man about to hand in his notice.

Nevertheless, this should be a timely warning for workers, welfare recipients, and their families, who must begin to resist the accelerating rounds of austerity that threaten to reverse the meagre gains of the last couple of decades and land us back in 70s-style poverty once again.

Sunday, 2 October 2011

Iceland out of the woods!

The New York Times reports that Iceland is no longer under an IMF programme. A report from the IMF pronounces that the “adjustment programme” was successful.

Iceland still has high unemployment and is a long way from a full recovery; but it’s no longer in crisis. It has regained access to international capital markets, and has done all that with its society intact.

And it has done it with very heterodox policies: repudiation of debt, controls on capital, and depreciation of its currency. And it has worked. We would be much happier with an unemployment rate that Icelanders consider high!

“We were told that if we refused the international community’s conditions we would become the Cuba of the north. But if we had accepted we would have become the Haïti of the north.” 

No-one told them there was a third option: default.

“During the first Icesave elections we were told that if we rejected the deal to pay, all credit lines would stop, we’ll be isolated from international society, the sky would fall, and there would be chaos in the streets. This came directly from the government ministers. When we rejected, nothing happened.

“Second time around, this time we had the best deal we could possibly get and it would spark an international feud, we would go to an international court and be forever indebted should we reject. The finance minister did interviews warning us."
“We rejected again. Nothing happened. And the last time I heard, we taxpayers don’t have to pay anything close to what was said initially, maybe nothing at all!”

The IMF report says:  
“Over the medium term, moderate growth is projected, led by investment and consumption. However, uncertainty about the sources of growth continues to weigh on prospects. Iceland is endowed with abundant natural resources, but the use of these resources remains an issue of intense public discussion. There has been considerable interest in new investments in power-intensive sectors, but technical and financial obstacles remain a challenge.”

So now, what’s the difference between Iceland and Ireland? The answer might be that Iceland is not completely out of the woods but is getting there.

Contrast Ireland, which is saddled with odious bank debt for at least the next generation.

Don’t mind the ESRI!

Saturday, 1 October 2011

NAMA is a “laboratory” for the EU

The Fianna Fáil-Green coalition considered that NAMA “might prove to be a laboratory” for other EU states faced with banks on the brink of collapse, according to the latest diplomatic communications published by Wikileaks.

Ireland’s permanent ambassador to the EU, Rory Montgomery, made the comment to the US ambassador to Ireland at a meeting in Brussels in September 2009, revealing that the EU “was watching closely” the establishment of NAMA.

In a meeting with American diplomats an executive of the Central Bank, Billy Clarke, said the guarantee had to be introduced because a “perfect storm” of external events related to the credit crisis had dried up traditional sources of financing for Irish banks. Another official, Gordon Barham, said that impaired assets were mostly confined to loans to commercial property developers. When pressed, Barham said the media had exaggerated the problem assets.

A comment from an American official at the end of the cable accused the Irish of “being a bit optimistic in their assessment of the level of impaired assets.”

No wonder, then, that the general secretary of the ICTU, David Begg, recently warned the Taoiseach, Enda Kenny, that the EU-ECB-IMF troika is using Ireland as a “social laboratory” for testing its economic policies. He pinpointed the fact that “all the talk of reform” ignored the actions of the banks that had sparked the crisis in the first place. “It occurs to a lot of people that reform is for the little people: it is not for the powerful.” He pointed out that the troika’s “economic laboratory” was using Ireland to test its economic policies—policies that were not “evidence-based.”

Friday, 30 September 2011

Euro-federalists on the march!

The German chancellor, Angela Merkel, has suggested that there may need to be a change in EU treaties to ensure fiscal discipline in the euro zone.

“There is no rule so far to force the countries to comply with the Stability and Growth Pact,” she said. “Therefore, treaty changes must not be a taboo in order to achieve more commitment.”

She was supported by the Italian minister for foreign affairs, Franco Frattini, who said: “Different countries have different views on European federalism, but Italy is ready to give up all the sovereignty necessary to create a genuine European central government. We must work seriously towards the formation of a genuine European economic government.”

The chairperson of the Euro Group, Jean-Claude Juncker, joined the chorus, saying, “I wouldn’t exclude a treaty change in the coming months. In Germany there’s a growing awareness that treaty changes have to be envisaged.”

He added that a change in the treaties could help the euro zone become more flexible and respond better to any future crisis.

Juncker is considering putting forward a proposal for a permanent head of the Euro Group, meaning that he would concentrate on his role as prime minister of Luxembourg. And the outgoing managing director of the European Central Bank, Jean-Claude Trichet, chipped in, telling participants at a Paris conference that the bloc required a European “federal government with a federal finance minister.”

The reprobate warmongering Green, Joschka Fischer, capped it all, saying that “we need to hand over budget prerogatives to the EU . . . We need similar pension ages . . . We are going to have to draw all the threads together . . . [and] future integration steps need a political Europe."

The British chancellor of the exchequer, George Osborne, seems to agree. “I think it is on the cards that there may be a treaty change imposed in the next year or two,” he said, to “further strengthen fiscal integration” in the euro zone.

It appears that a proposal will be tabled next month that would see negotiations over an EU treaty change launched as early as December.

Watch out! The Euro-federalists are on the march.

Thursday, 29 September 2011

Euro rebellion heats up in Germany

 For the first time ever, a clear majority (60 per cent) of Germans no longer see any benefits in being part of the euro zone, given all the risks, according to an opinion poll published on 16 September. In the age group 45–54 this jumps to 67 per cent. And 66 per cent reject aiding Greece and other heavily indebted countries.

Ominously for the chancellor, Angela Merkel, 82 per cent believe that the government’s crisis management is bad, and 83 per cent complain that they’re kept in the dark about the politics of the euro crisis.

Wednesday, 28 September 2011

Irish austerity measures could threaten human rights

The Council of Europe’s commissioner for human rights, Thomas Hammarberg, says that budget cuts planned in Ireland “may be detrimental” to the protection of human rights.

The Government has pushed through nearly €21 billion in spending cuts and tax increases, equivalent to more than 13 per cent of gross domestic product (GDP). But, Hammarberg said, “it is crucial to avoid this risk, in particular regarding vulnerable groups of people.”

His comments come in a report following a recent fact-finding visit to Ireland. In the report he calls on the Irish authorities to “refrain from adopting budget cuts and staff reductions which would limit the capacity and effectiveness” of institutions designed to combat discrimination, racism, and xenophobia.

The Council of Europe, based in Strasbourg, represents both EU and non-EU states and, among other things, champions the rights of minority groups.

Tuesday, 27 September 2011

Conor McCabe - Raymond Crotty Memorial Lecture 2011: Rancher & Banking Interests in the Irish Economy. Pearse Centre, Dublin @ 2:30pm, Saturday 15 October.

Conor McCabe: Raymond Crotty Memorial Lecture 2011, Pearse Centre, Dublin @ 2:30pm, Saturday 15 October.

Sins of the Father: The decisions that shaped the Irish Economy - Conor McCabeRaymond Crotty Memorial Lecture 2011 - Conor McCabe: Rancher & Banking Interests in the Irish Economy

Dr. Conor McCabe will deliver the Raymond Crotty Memorial Lecture for 2011 in the Pearse Centre (27 Pearse Street), Dublin, at 2:30 p.m. on Saturday 15 October.

German Constitutional Court: no "constitutional blank cheque for further aid packages"

German Constitutional Court rejects challenges against bail-outs

The German Constitutional Court has ruled against the claims that the euro-zone bail-outs are illegal.

However, the court stressed that the verdict “should not be misinterpreted as a constitutional blank cheque for further aid packages.”

The court also ruled that, in order to conform to the constitution, “the Federal Government is in principle obliged to always obtain prior approval by the [Bundestag] Budget Committee before giving guarantees.”

This means that the parliamentary budget committee will have to agree to any future bail-out packages or use of the EFSF, the euro zone’s bail-out fund. This is a big change from the present situation, where the German government needs only to reach a non-binding agreement with the budget committee over any bail-outs.

Additionally, the ruling seems likely to impose further restrictions on Eurobonds or debt mutualisation in the euro zone. The press release states that “the Bundestag, as the legislature, is also prohibited from establishing permanent mechanisms . . . which result in an assumption of liability for other states’ voluntary decisions, especially if they have consequences whose impact is difficult to calculate.”

This seems to suggest that any move towards Eurobonds would be unconstitutional, even with agreement from the Bundestag, though the ruling also hints at greater German control over the fiscal policies of other states that could circumvent such legal restrictions.

A comprehensive overview of the ruling may be found at

Monday, 26 September 2011

Greek government introduces household tax too

The Greek government has unveiled a fresh round of austerity measures, amounting to €2 billion, as pressure mounts on the country to deliver on its commitment to reduce its debt burden.

The minister for finance, Evángelos Venizélos, described the moves, which will involve a new two-year household tax and holding back a month’s pay from all elected officials, as a new “national effort.”

“We know that these measures are unbearable,” he said. “Our immediate priority is the full respect of the budget targets for 2011.” The European Commission, naturally, welcomed the announcement.

Sunday, 25 September 2011

EU Commission demands even further austerity

EU countries under market pressures must be prepared to swallow even stronger doses of austerity.

Most states have slashed tens of billions from their public spending plans already, but this may not be enough, according to an annual report from the EU Commission on the state of public finances in member-states.

The head of the Commission’s economy department, Marco Buti, wrote in a gloomy “editorial” that, “despite the fact that a return of GDP growth, a gradual withdrawal of the temporary support measures and the start of consolidation is starting to reduce deficits, debt is still expected to continue increasing for the next year or so in most cases.

“Once it has reached its peak, the issue is not over. It will not be sufficient to stem the increase; rather, additional consolidation measures will be required to reduce it from its new level .” He argues that Europe’s ageing population will add still further pressures on public finances in the coming decades as a result of the higher costs of ageing and lower growth as a result of the smaller number of people of working age.

Despite multiple rounds of austerity already imposed, Greece for its part will see its debt burden climb to 166.1 per cent of GDP in 2012, up from 157.7 per cent this year, while our own may reach 104 per cent.

The document goes on to say that while governments can reduce debt levels through spending cuts or increasing taxes or a mixture of the two, they should embrace cuts in preference to tax increases, as “evidence from the past shows that cuts have greater success, in terms of the effect that they have on the overall public finances.”

The future in the EU does indeed look gloomy.

Saturday, 24 September 2011

Hang our heads in shame and pay the German bondholders?

The EU commissioner for energy, Günther Oettinger of Germany, in an interview with the German tabloid Bild, suggested that the flags of countries with excessive deficits should fly at halfmast in front of EU buildings.

In his comments he referred to “deficit sinners,” who needed “unconventional” treatment to help them mend their ways— possibly through officials appointed by Brussels and imposed in recalcitrant capitals. “There has been the suggestion too of flying the flags of deficit sinners at half-mast in front of EU buildings. It would just be a symbol, but would still be a big deterrent.”

Would it? Really?

Another tactic for pulling a debt-stricken country out of crisis could be replacing “the obviously ineffective administrators” there, he said. Because Greek officials have failed at collecting outstanding taxes and selling state-owned assets as planned, Oettinger alleged, experts from other EU countries should be sent in to do their jobs instead.

Oettinger later denied suggesting that the flags of “deficit sinners” should fly at half-mast and said he was merely referring to a notion he heard in the office of a German tabloid. Asked how it had come about that Oettinger made such remarks, his spokeswoman said, “It just came out.”

But in a letter to the president of the Commission, José Manuel Barroso, 151 MEPs said that Oettinger’s comments “imply the symbolic humiliation of European nations. Mr Oettinger should retract and recant his words, or resign from the European Commission.”

Friday, 23 September 2011

The Government should come clean with the Irish public about the European Stability Mechanism Treaty

People's Movement welcomes call by elected representatives
The People’s Movement welcomes today’s wake up call in this morning’s Irish Times by twenty six Oireachtas members and one MEP warning about the implications of an commitment by the Government to a very significant diminution of the sovereignty of the State, hoping that it can sleep walk the country into it. We agree wholeheartedly with their demand that the issue must be put to the country in a referendum.
The Government should come clean with the Irish public about the European Stability Mechanism Treaty. Signing this Treaty last July Finance Minister Noonan committed the State to “irrevocably and unconditionally” contribute some €11 billion towards an Eurozone fund from 2013 onwards with the possibility of demands for further sums down the line.

The Fianna Fail Party should explain why it apparently supports the Government action and the amendment to the EU Treaties to permit the 17 Eurozone countries to set up a permanent bailout from 2013 to replace the current temporary bailout fund that was established in April last year for Greece and which has since been applied to Ireland and Portugal.

It is reasonable, given the state of our economy for people to know the full details of the cost and implications of this. Initially we will have to borrow €1.27 billion to pay into this fund and its proponents are happy that we should pay €11.1454 billion in the end.

What guarantee can they give us that the country will get any benefit?

Also if the State were to receive ESM assistance there are no limits to the “strict conditionality” provisions that might be attached in light of the fact that the Treaty formally subordinates Ireland’s interests to those of “the stability of the euro area as a whole” It would mean a regime of unmitigated austerity for decades to come.

And for whose benefit? Certainly not the people of Ireland.

Background Information

This initiative seeks to warn the Irish public about some of the consequences that can arise from European Stability Mechanism (ESM) and the Treaty to establish it which the Government has already signed up to and which it proposes to ratify in the near future.

The ESM Treaty follows the decision of the 27 EU States to amend the EU Treaties by adding a new clause to Article 136 TFEU taken under the new, so-called "self-amending" Article 48.6 of the TEU that was inserted by the Treaty of Lisbon.

This Article 48.6 permits the European Council of EU Heads of State or Government to amend the main policy areas of the Treaties without calling an intergovernmental conference, so long as the amendment "does not increase the competences" of the EU.

The proposed amendment to Article 136 TFEU reads: "The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality."

The Treaty commits the State “irrevocably and unconditionally” to contribute vast sums to a permanent Eurozone Fund, the European Stability Mechanism (ESM), from 2013 without any guarantee that it will bring Ireland any benefit, and which could be used to put the Irish State under a regime of permanent austerity by “stabilisation” measures such as the Euro Plus Pact.

The post-ESM Treaty Monetary Union would be based on the possibility of significant financial resources being transferred from richer Member States to poorer ones through loans, financial guarantees, debt buy-backs, remission of interest rates and relaxation of loan maturity terms, interwoven with provisions for "strict conditionally" and supported by the structure of rules and policy enforcement mechanisms that are set out in the Euro Plus Pact currently before the European Parliament.

If the State were to receive ESM assistance, there are no limits set in the ESM Treaty to the “strict conditionality” provisions that may be attached. There is no reason that loans or grants or overdraft facilities should not have attaching to them such conditions as that an Irish Government will introduce a balanced budget constitutional amendment here or whatever Germany and France require of it in the interests of safeguarding "the stability of the euro area as a whole". 

Related Link:
For further information, contact Kevin McCorry author email info at selisboninfo dot com author phone 086 3150301

Government plans to publish ESM bill, EU-IMF bill and household charges bill before the end of the year

The Government plans to publish a number of bills during the current Dáil session, including a number arising from the EU-IMF programme.

The Department of Finance will publish five bills in the coming months. The Fiscal Responsibility Bill will provide a statutory basis for a range of fiscal policy and expenditure management reform, while another bill will enable Ireland to ratify the treaty establishing the European Stability Mechanism. The European Financial Stability Facility (Amendment) Bill and Euro Area Loan Facility (Amendment) Bill will enable Ireland to ratify agreed amendments to the EFSF framework agreement and the Greek loan facility agreement, and will be introduced as soon as this week.

Among the other important bills to be published are two from the Department of the Environment. The Local Government (Charges) Bill will impose an annual household charge on owners of residential properties, while the Water Services (Amendment) Bill will establish a system for inspecting and monitoring the performance of septic tanks and other onsite waste-water treatment systems.

Thursday, 22 September 2011

No European Stability Mechanism Treaty by stealth - Irish electorate should decide

Oireachtas members and MEP call for referendum
Twenty-six members of the Oireachtas and one MEP, have joined in an initiative with the People’s Movement (which campaigned against the Lisbon Treaty in the two referenda) to demand that the Irish electorate have the determining say by way of referendum on the proposals to establish a permanent eurozone fund by Treaty amendments that will be binding on Ireland.

A letter from the Oireachtas members and the MEP, who include members of various parties as well as Independents, says that the Treaty formally subordinates Ireland’s interests to those of the stability of the euro area as a whole yet there has been an almost total media blackout on the implications and consequences of the ESM for the country.

In a statement last night People’s Movement spokesperson, Kevin McCorry, said that the Government should come clean about the European Stability Mechanism Treaty that Finance Minister Noonan signed in July, a Treaty that commits the State to "irrevocably and unconditionally" contribute some €11 billion towards an Eurozone fund from 2013 onwards with the possibility of demands for further sums down the line.

The People’s Movement is also calling on Fianna Fáil to explain why it apparently supports the Government action in amending the EU Treaties by stealth.

It is reasonable, given the state of our economy, Mr McCorry said, for people to know the full details of the cost and implications to the country of borrowing to meet Ireland’s initial €1.27 billion payment and the remainder of the €11,145,400,000 which all concerned seem happy enough to commit us to pay. What guarantee can they give us that the country will get any benefit?

Also if the State were to receive ESM assistance there are no limits to the "strict conditionality" provisions that might be attached in light of the fact that the Treaty formally subordinates Ireland’s interests to those of "the stability of the euro area as a whole" It would mean a regime of unmitigated austerity for decades to come.

And for whose benefit? Certainly not the people of Ireland.

The full text of the letter is as follows:

"The Government in the coming months will seek to push through the Oireachtas an amendment to one of the two Treaties on which the EU is based authorising the establishment of a permanent Eurozone fund, the European Stability mechanism (ESM), and the ratification of the Treaty that actually establishes the fund.

The Treaty which has already been signed but not yet ratified commits the Irish State to irrevocably and unconditionally contribute €11 billion in various forms of capital to the ESM when it is established in 2013 and possibly further sums after that at the behest of Eurozone Finance Ministers when contributions come up for regular review. This will have to be borrowed on the international market.

Weaker economies like Ireland would have to put up cash immediately to cover any short-fall of paid in capital that might arise while triple A rated economies like Germany and France would be put under less financial pressure by being able to fulfil their obligations by way of guarantees.

Assistance from the ESM will only be given on the basis of strict conditionality—these conditions being unspecified and potentially unlimited. If the Irish State were to receive loans or grants or favourable

borrowing facilities from the ESM, these conditions could require the introduction of a balanced budget constitutional amendment or dropping the objection to the harmonization of corporate taxes at EU level.

The Treaty formally subordinates Ireland’s interests to those of the stability of the euro area as a whole yet there has been an almost total media blackout on the implications and consequences of the ESM for the country.

The support of Fianna Fáil for the Government action has further contributed to the managed nature of the whole process. The ESM is part of a package of measures that can only lead to fiscal union in the EU, beginning with stricter controls on budgets and public spending starting with the so-called Euro Plus Pact and soon moving on to a harmonising of taxes.

We believe that the legislation to enable the State to license its establishment and ratify the Treaty setting it up should be put to the Irish people in a constitutional referendum and we urge the Government to let the people decide on this matter of crucial importance for the future of our country"

The signatories are:

Gerry Adams TD, Senator David Cullinane, Clare Daly TD, Dessie Ellis TD, Michael Colreavy TD, Seán Crowe TD, Pearse Doherty TD, Martin Ferris TD, Luke Ming Flanagan TD, Joe Higgins TD, Mary Lou McDonald TD, Finian McGrath TD, Mattie McGrath TD, Sandra McLellan TD, Pádraig Mac Lochlainn TD, Catherine Murphy TD, Paul Murphy MEP, Caoimhghin Ó Caoláin TD, Senator Trevor Ó Clochartaigh, Aengus Ó Snodaigh TD, Maureen O’Sullivan TD, Thomas Pringle TD, Senator Kathryn Reilly, Brian Stanley TD, Peadar Tóibín TD, Mick Wallace TD.
Related Link:
For further information, contact Kevin McCorry author phone 086 3150301 author email info at selisboninfo dot com

Wednesday, 21 September 2011

Important Conference - The EU in crisis: Prospects for regaining Ireland’s sovereignty. 7-8 October 2011

The EU in crisis
Prospects for regaining Ireland’s sovereignty.

Friday-Saturday 7-8 October 2011 in the Ireland Institute
27 Pearse Street Dublin 2

Friday 7 October 7.30pm
Was ‘Social Europe’ a con?

-- Speakers: David Begg, Gen Sec ICTU
Alex Gordon, Gen President RMT
Chair; Seamas Ratigan, Campaign for a Social Europe

Saturday 8 October 11.00am
Should Ireland stay in the Euro?

Speakers: Frank Keoghan, People’s Movement
Joe Higgins TD
Chair: Padraigh Mannion, PANA

Saturday 8 October 2.00pm
The EU’s emerging superstate

Speakers: Roger Cole, Chair of PANA
Declan Power, Security and Defence Journalist
Chair: Michael Youlton, Campaign for a Social Europe

Saturday 8 October 4.15pm
The struggle to regain Ireland’s sovereignty

Speakers: Alex White TD
Robert Ballagh, Peoples Movement
Aengus O’Snodaigh TD.
Chair; Mick O’Reilly, People’s Movement

Monday, 13 June 2011

Pat Cox for President?

Pat Cox is one of the elite steering group of the Spinelli Group.

They state as their aim; ‘We want to make a network of those who choose the European interest above their national interest, those who want to push the federal project in their respective environment".

Now we know why Cox wants to be President! Besides being a corporate pimp, he openly declares that he places EU interests before those of Ireland.

Do you think he’s a suitable person to be President of Ireland?

Sunday, 12 June 2011

The reward for default; why don’t we just get on with it?

The credit default swap (CDS) for the Icelandic sovereign has now dropped to 200 points and has not been lower since months before the banking collapse in October 2008. The CDS has been in constant decline since January and indicates growing belief in Iceland’s economy.

Meanwhile, the CDS spread for Ireland is 683 basis points.

So it seems as if defaulting on debts run up by greedy bankers (German and French with the assistance of their Irish acolytes) and letting your currency depreciate works better — even from the point of view of investors — than socializing private-sector losses and sticking with a fixed exchange rate – the Euro?

Tuesday, 24 May 2011

Anybody for President but Pat Cox!

Pat Cox, an Irish MEP for fifteen years (1989 - 2004) and president of the European Parliament for two years (2002 -2004) has now set his sights on the Irish Presidency. 

It is well to remember some of Mr Cox’s connections and just to remind you of some of them, have a look at this old blog on; 

Is this person suitable for the position of President of Ireland?

Anyone for a "Stop Pat Cox" Campaign?

Monday, 23 May 2011

What does it take?

Four short months ago Michael Noonan, called the IMF-EU deal “a downright obscenity”, now he tells us that “Europe has been very good to us . . . They’re actually treating us very well.”

The same Fine Gael that endlessly plugged five-point plan suggested that Ireland might have no choice but to “write down the value of the bonds in the Irish banks” now blithely informs us, via Noonan, that “that debate is over”, that ‘there is no stomach’ in Europe for burning the bond-holders.

And Joan Bruton and the Labour party are strangely quiet on the issue now that the ‘old guard’ of Labour have parked their rears in ministerial seats.

But, more ominously, the people are also very quiet as stealth tax follows stealth tax and the promised change from FG/Labour turns out to be a change for the worse. Do we get what we deserve in the end?

Saturday, 21 May 2011

Government determined to make working people pay

Believe it or not, the €70 billion we’re putting into insolvent banks is €38,000 for every person at work in the Irish economy. If we add €35 billion for NAMA, it’s €57,000 for every worker.

A worker on the average industrial wage will pay €260,000 in tax over a working lifetime. It would therefore take all the tax paid by more than 400,000 workers over their entire careers to pay for the bank bailout alone. Even if we’re wildly optimistic and assume that we’ll eventually get back half of the €105 billion; that still leaves 200,000 of us working our whole lives to save the euro and pay off the gambling debts of a private elite.

It simply cannot be done without reducing us to absolute poverty. The FG/Labour government is determined to make working people pay but we should shout ‘we can’t pay and we won’t pay’ – and call for a structured default now.

Friday, 20 May 2011

More broken promises – remember?

Irish voters were promised a special Treaty Protocol on (a) Neutrality, (b) Irelands right to decide its own company taxation and (c) the constitutional position on abortion, in the next EU Treaty.
At the time it was thought that this would be the EU Accession Treaty for Croatia or Iceland. Now to establish the ESM, (a) the Lisbon Treaty will be amended and the amendment ratified by all EU Member States and (b) The ESM will be established by a treaty among the euro-area Member States binding the EU Member States signatories.

The Government and the Opposition parties that foisted the Lisbon Treaty on the Irish people have an obligation to tell us why it is impossible for them to have the promised Protocol now. As well as this promised Protocol itself, the Government promised during the 2009 Lisbon Treaty referendum that it intended registering the agreement to give Ireland a Protocol with the United Nations in New York. Has this been done? If not, why not?

Thursday, 19 May 2011

Thousands protest in Madrid today over the economic crisis – but why are we so quiet?

Thousands of Spaniards have defied a ban on demonstrations and mounted a protest camp in the heart of the Spanish capital to express anger at political parties and the country's handling of the economic crisis.

The crowds packed Madrid's Puerta del Sol square this morning and pledged to stay there until after municipal and regional elections this weekend. The Madrid electoral board had banned the demonstration because it could influence the elections Sunday.
Similar demonstrations have been held in other Spanish cities.

The protests are a spillover from countrywide demonstrations last Sunday and have triggered a lively debate throughout the country, something that we badly need. 

Wednesday, 18 May 2011

I wasn’t asked ………

The European Union plans to open an office in Benghazi, Libyan town in insurgent hands, to facilitate assistance to the Transitional National Council.

Lo ha riferito il capo della politica estera dell'Ue, Catherine Ashton.
EU foreign minister, Baroness Catherine Ashton said; "Intendo aprire un ufficio a Bengasi, in modo da poter spostarci verso la gente... per sostenere la società civile, per sostenere il Consiglio nazionale di transizione", ha detto Ashton al Parlamento europeo, aggiungendo che il sostegno Ue include aiuti per il settore della sicurezza, riforme e istituzioni."I intend to open an office in Benghazi, in order to move towards the people ... to support civil society to support the National Transitional Council," Ashton told the European Parliament, adding that the EU support include aid for the security sector reforms and institutions.

But that could hardly mean any military involvement?

That’s why we need a referendum on the European Stability Mechanism!

The Community shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project”.
- Article 104b, Maastricht Treaty, 1992.

We have a Treaty under which there is no possibility of paying to bailout states in difficulty”.
  • German Chancellor, Angela Merkel, 1 March 2010.

And before the Irish ‘forced loan’ …..

The euro is in danger – if we do not avert this danger, then the consequences for Europe are incalculable, and then the consequences beyond Europe are incalculable.”
- German Chancellor, Angela Merkel, 19 May 2010.

We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers […] The consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank”.
- German Finance Minister, Wolfgang Schäuble, 18 April 2010.

There is a grave threat of contagion effects for other member states in the monetary union and increasing negative feedback loop effects”.
  • Bundesbank Chief, Axel Weber, 5 May 2010.

Portugal reaches deal with EU/IMF

Portugal announced that it has reached an agreement with the EU/IMF for a €78bn bailout spread over three years. The plan will include €12bn in financial support for the Portuguese banking sector as well as pension cuts, but it is not expected to reduce the minimum wage or cut education or healthcare spending.
The deal also gives Portugal more time to reduce its deficit than was previously planned. The government will have to cut its deficit to 5.9% of GDP, from 9.1%, by the end of the year and to 3% by 2013. Details on the interest rate and on the source of the bailout funds have not been announced. Both decisions are expected to be made soon.
José Sócrates, caretaker Portuguese Prime Minister, suggested that the EU/IMF had recognised that “the situation in Portugal is far from being as serious as in other countries”, a sentiment with which we in Ireland are familiar!

Increasing doubts in Iceland

Iceland’s Finance Minister Steingrimur Sigfusson has voiced opposition to Iceland’s bid for EU accession saying, “Iceland is probably better off with other forms of agreement and connections with the EU than full membership…I am still very sceptical when it comes to the overall benefits of membership”

CGT union warns of discontent at ‘pact for the euro’

Bernard Thibault, head of the CGT, France’s biggest trade union said European unions would be stepping up their protests against the Franco-German “pact for the euro” adopted by eurozone members last month. Te pact aims to strengthen economic co-ordination in the eurozone, including proposals on wage restraint and pension policies.

The pact is negative for workers and counter-productive for economic growth. It has made labour costs the mechanism for exiting the crisis. The systems of social protection are not the origin of the international financial crisis – it is totally illusory to think that increasing social vulnerability will facilitate recovery,” Mr Thibault said.
The European Trades Union Congress, which brings together unions in 36 countries, including Ireland, would “debate new perspectives of mobilisation” at its congress on May 19, Mr Thibault said, including co-ordinated protests.
Meanwhile, widespread protests have erupted in Greece in a violent reaction to government plans for €76bn of fresh cuts and nationalisations. The protests and strikes, which shut hospitals, grounded flights and stopped docking ferries, were timed to coincide with a mission by IMF and EU officials to the country. Demonstrators shouted "Take your memorandum and go" in a marked contrast with Ireland where they walk unbothered around Dublin.

The country's biggest public sector and private sector unions backed Wednesday's general strike, the second this year, to protest against planned sales of state assets; a similar sale in Ireland is assured by the conclusions of the recent McCarthy Report. It was also reported that Greece was close to agreement for "supplemental" EU/IMF loans of €50-60bn to meet its financing needs in 2012 and 2013.

‘Founding Father’ waiting for a miracle

Robert Schuman, an early architect of the European Union, has hit an obstacle on his way to becoming a Catholic saint due to the lack of a miracle.

Schuman, a former French foreign minister was in 1960 dubbed a "founding father" of the Union by the European Parliament in a title recalling the "fathers" of the Catholic church such as St Augustine and St Gregory. The Institut Saint-Benoit, a foundation in Montingy-les-Metz, France, where Schuman spent much of his life, was set up in 1988 to promote his candidacy for sainthood. The foundation believes that Schuman is an "exemplary Christian" both in terms of his personal life and the "holiness of his politics".

The Vatican's embassy to the EU in Brussels has said however that: "We are still waiting for a miracle. One miracle is required for beatification and two for sainthood." Recently Johanna Touzel, a spokeswoman for Comece, a Brussels-based liaison bureau between the Catholic church and the EU institutions, has pointedly said "it has certainly helped" in past relations that the three top men in the EU capital are Christians.

EU will speak with one voice at UN – Ireland’s independent foreign policy………!?

UN General Assembly has voted to give the EU enhanced Observer Status. EU Foreign Minister Catherine Ashton said ‘the resolution will in future enable EU representatives to present and promote the EU’s positions in the UN, as agreed by its member states’.
The change means the EU can address UN meetings through its own officials, rather than the country holding its rotating presidency, but does not give it voting rights. The EU has been working to upgrade its status at the UN since its member state governments approved the Lisbon Treaty in 2007.

Would you believe it - Euro-federalists financed by US spy chiefs?

Declassified American government documents have shown that the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement. One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services (OSS), precursor of the CIA.

The documents were found by Joshua Paul, a researcher at Georgetown University in Washington. They include files released by the US National Archives. Washington's main tool for shaping the European agenda was the American Committee for a United Europe (ACUE), created in 1948. The chairman was Donovan, ostensibly a private lawyer by then.

The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA's first director, and a number of ex-OSS figures and officials who moved in and out of the CIA. The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years. In 1958, for example, it provided 53.5 per cent of the movement's funds.

The European Youth Campaign, an arm of the European Movement, was wholly funded and controlled by Washington. The Belgian director, Baron Boel, received monthly payments into a special account. When the head of the European Movement, Polish-born Joseph Retinger, bridled at this degree of American control and tried to raise money in Europe, he was quickly reprimanded.

The US role was handled as a covert operation. ACUE's funding came from the Ford and Rockefeller foundations as well as business groups with close ties to the US government.
The head of the Ford Foundation, ex-OSS officer Paul Hoffman, doubled as head of ACUE in the late Fifties. The State Department also played a role.

A memo from the European section, dated June 11, 1965, advises the vice-president of the European Economic Community, Robert Marjolin, to pursue monetary union by stealth. It recommends suppressing debate until the point at which "adoption of such proposals would become virtually inescapable". And that policy has been adhered to ever since!

More expensive electricity - courtesy of the EU?

A single EU electricity market could end up leaving Irish consumers facing extra costs, according to the Economic and Social Research Institute (ESRI). A Review of Irish Energy Policy points out the EU is moving rapidly towards an integrated electricity market, and warns such a development could create extra costs for Irish consumers.
The report’s says that an integrated market will mean greater interconnection between the Irish and other European electricity networks and that; “There is a danger that EU rules could see Irish consumers paying for interconnection, which might end up raising their price of electricity.”

Dail watch on Europe Day

The following extract from a contribution by Sinn Fein TD Pádraig MacLochlainn delivered to the Dail on‘Europe Day’ seems to succinctly outline the party’s position on the EU.

Sinn Féin is proud to be a euro-critical party. While it believes Ireland’s place is at the heart of Europe, it also believes it is the responsibility of Government and Opposition to play a full part in EU affairs and to this end, Sinn Féin has long advocated greater attention to EU affairs in public and Oireachtas debates. However, what marks out Sinn Féin as distinct from the other major political parties in this House is that while we support those aspects of European Union policy that are in the interests of the people of Ireland, we are not afraid to oppose those policies which we believe are bad for Ireland. We do not believe that opposition to aspects of the EU project, whether in the form of directives, Council decisions or treaties, makes us anti-European. Indeed, Sinn Féin argues that when it critically opposes aspects of EU policy, it is on the grounds that these policies are bad for both Ireland and the EU as a whole.
Richard Boyd Barrett of People before Profit Alliance pointed out that;
If this gathering were truly to reflect our current relationship with the European Union, Jean-Claude Trichet of the ECB would be sitting in the Taoiseach’s seat, flanked by the heads of the Bundesbank and the other big European banks, and all the public representatives in this Chamber would be bound and gagged.
Next day, Boyd Barrett was ordered to leave the Dáil chamber after a row with the Ceann Comhairle. Boyd Barrett shouted that it was "abuse" when he was told to sit down during questions to the Taoiseach.

Independent TD Luke Flanagan doesn’t mince his words!
I often said in the last few weeks that I could not understand who is and who is not a socialist, but at this stage I know who is not a socialist. The Members on the other side of the House are not socialist. One does not talk about there being some type of moral hazard in an individual defaulting on their debt while simultaneously believing there is no problem with a bank offering money to people it knows could never repay it if anything went wrong.
21% of people in this country, or 735,000, have €70 per month after they pay for everything. Will they be all right in the next couple of years after they pay the new water charges that will be introduced and the new housing tax to be imposed on us by our friends in Europe and the IMF? Our friends in Europe are also talking about increasing interest rates by 1% or, in their language, 100 basis points. That is only another €1,000 gone from one’s income.
Apparently, the difficulties in which we find ourselves are not the fault of Fianna Fáil or the previous Government of which it was a part. Our problems are due, it seems, to the worldwide financial crisis. It did not take those opposite long to turn into the same beasts - and they were beasts - as those who served in government before them. They should be ashamed of themselves.
And an important question from Pádraig MacLochlainn the following day;
The Taoiseach will acknowledge that it will be rather difficult for us to deliver on the goals we set ourselves in the national reform plan while, at the same time, implementing the austerity programme from the EU, the IMF and the ECB. The Tánaiste has announced the diplomatic initiative. Does that initiative involve engaging with the Governments of Greece, Portugal and, potentially, Spain on a counter-offensive to the narrative that exists in northern Europe that the bailout is a result of the recklessness of the peripheral economies when, in reality, the recklessness of major financial institutions in the core states being allowed by the ECB and IMF to lend banking institutions in the peripheral states was the cause of the crisis? What engagements have taken place with those Governments?
Enda Kenny’s less than encouraging reply can be read at;

More lies from Juncker!

Criticism of Jean-Claude Juncker, Prime Minister of Luxembourg, who heads the Euro Group of finance ministers, for lying about a secret meeting of select EU finance ministers to discuss the worsening Greek debt situation, was widespread last week.

Ministers and their spokespeople across the eurozone had first denied or refused to comment on a widely repeated report which appeared in Spiegel Online revealing that a secret meeting of senior EU officials was held in Luxembourg to consider a Greek exit from the euro.,1518,761201,00.html

The same officials later confirmed that the meeting took place, but that Greece returning to the drachma was never on the table. Juncker it appeared had invited finance ministers from France, Germany, Spain, and Italy, ostensibly under the aegis of the EU members of the G20 (although the UK, a G20 member, was absent), along with Greece, the European Central Bank and Olli Rehn, the EU economy commissioner. Juncker's spokesman was quoted by Reuters as saying: "I totally deny that there is a meeting, these reports are totally wrong." Later, Enda Kenny said in the Dail that he had ‘not spoken to Mr. Juncker, who called the meeting in Luxembourg at short notice,’

The development comes after Juncker had admitted the week before during a Brussels conference on economic governance that over the course of his career, despite his Catholic upbringing, he often "had to lie" in order not to feed rumours and that economic policy was too important to be discussed in public. "I am for secret, dark debates," he quipped, according to an EUobserver report. German press agency DAPD has quoted him as saying: "When the going gets tough, you have to lie."

Austrian daily Der Standard attacked Juncker as a "master of lies, while Germany's influential Suddeutsche Zeitung meanwhile complained that no one can believe what EU leaders, but particularly Juncker, say regarding the stability of the eurozone any more. Meanwhile, the Greek prosecutor has contacted German counterparts, requesting assistance in tracking down those responsible at Spiegel Online for the initial report.

Blueprint for a federal superstate?

Speaking in Berlin on the occasion of ‘Europe Day’, EU Internal Market Commissioner Michel Barnier said that “one day, [Europe] will need an EU President” incorporating the functions of European Council and Commission President, arguing that “Europe needs a strong face and a strong voice.” Barnier also called for the creation of a single representative allowed to speak on behalf of eurozone countries and for a common EU defence policy. Barnier said that the EU diplomatic service should be called the European Ministry for Foreign Affairs.

On defence he pointed out that ‘we need to move towards a truly European defence policy. 60 years on, work on a European defence community needs to be restarted, if necessary through the “structured cooperation” which is now possible under the Lisbon Treaty. A true military staff structure is required, systematically bringing together research efforts and resources, and favouring European products when purchasing equipment. All of this goes far beyond the necessary, but insufficient, cooperation between France and the United Kingdom, or between Germany and Sweden.

The EU needs to set up a permanent capacity to plan and carry out operations in the way suggested by Poland, Germany and France. All in all, the objective must be that Europe is ready to take responsibility more and more for its own collective defence, but also become a robust and credible partner for the United-States.
The EU has legitimacy in the area of defence, as it does in other areas. This is the belief that has led France, under President Sarkozy, to take up its full role within NATO. Everyone who, like me, believes in the North-Atlantic alliance needs to understand that the balance, credibility and strength of the NATO/EU relationship depend on the political impetus which will be given to European defence. It is an issue of trust, and I would recommend that nobody on either side of the Atlantic underestimate this requirement.

The new Europe needs to be a veritable “Federation of Nation States”. It needs a strong identity and a strong voice. One day a future president of the European Union, whoever he or she will be, should both preside over the European Council and chair the European Commission.

The drafters of the Lisbon Treaty were careful not to rule out this major and symbolic step forward. The individual who would become president of the European Union on a proposal from the heads of state and government could have their power vested in them by a Congress comprising both the European Parliament and representatives of the national Parliaments. 

Irish banks continue to issue bonds to themselves in order to gain ECB loans!

Irish banks’ controversial issuance of ‘own-use’ bonds is set to continue. ‘Own-use’ bonds are issued by the banks to themselves, but are guaranteed by the Irish state, and then posted as collateral to take cheap loans from the ECB. In the past week Irish banks have issued €12bn of these bonds in order to roll over the original ‘own-use’ bonds until August, highlighting ongoing problems in the Irish banking sector.

Is €1.9bn pension levy the first step in pension fund grab?

Financial advisors have warned that the Government's target take of €470m a year from retirement funds would wipe out savings. The ICTU, pensions provider Irish Life and industry experts warned €1.9bn grab was an attack on average earners. The ICTU called for a small levy on top earners as a better prescription.

Latest CSO figures show that among occupational groups, ‘Clerical and secretarial’ (89%) workers were most likely to have an occupational pension and that they were more common among younger workers. Of those workers aged 25-34 who had a pension, 85% had an occupational pension, this compares with 64% of those aged 55-69.

Jerry Moriarty of the Irish Association of Pension Funds (IAPF) said the €1.9bn bill could see the start of bigger levies. "We just see it as a tax on working people saving - that's what pension funds are," he said. "The Government thinks that it is just a pot of money and that 0.6% is not a lot, but this is money that people have saved for retirement. It could be the start of something bigger. It's a wipeout, there's no question."
The IAPF said there are fears this is the first step in a line of additional levies on savings including credit union accounts. Mike Kemp, Irish Insurance Federation chief executive, said the levy was onerous, and added: "This levy does not penalise those that are well-off, but ordinary middle income earners."

New laws will be brought in to allow fund administrators to impose the tax, although the IAPF warned legislation may be open to challenge under laws on constitutional property rights.

As we pointed out in our last issue, Irish savers have about €75bn in private pension plans and €93bn in deposit accounts, both of which present the opportunity for a government smash and grab, in yet another move to appease the bond-holders and our masters in the EU/IMF.