Ireland demands debt relief, warns on EU treaties

Europe's plans for treaty changes to enforce fiscal discipline in the eurozone may fall foul of popular anger in Ireland unless the EU creditor states agree to share more of the pain.

By Ambrose Evans-Pritchard, in Dublin
7:53PM GMT 23 Nov 2011


The Irish government has suddenly complicated the picture by requesting debt relief from as a reward for upholding the integrity of the EU financial system after the Lehman crisis, though there is no explicit linkage between the two issues.

"We carried an undue burden for protecting the European banking system from contagion," said finance minister Michael Noonan.

"We are looking at ways to reduce the debt. We would like to see our European colleagues address this in a positive manner. Wherever there is a reckless borrower, there is also a reckless lender," he said, alluding to German, French, British and Dutch banks.

Mr Noonan hinted that Dublin is asking for some of interested relief on a €31bn EU promissory noted linked to the Anglo Irish fiasco, among other matters.

Mr Noonan said Ireland's public mood has turned very sour.

"We have indicated to Europe's authorities that it will be difficult to get the Irish public to pass a referendum on treaty change," he said.

The EU's new fiscal rules would be legally binding and "justiciable" before the European Court, he said. This raises the likelihood that Ireland's top court would insist on a referendum.

The Irish voted `No' to both the Nice and Lisbon Treaties, before being pressured into repeat ballots, and would certainly some form of quid pro quo in this case.

Ireland took on the bulk of the debt from its oversized banking system in 2008, resisting a chorus of calls for the country to follow Iceland's example and walk away from private bank liabilities. Had Ireland done so, it might have set off a catastrophic chain reaction across Britain and Europe.

The fateful move has saddled the taxpayers with colossal losses from Anglo Irish and other banks, and will push public debt to near 118pc of GDP by 2014. There is a widespread resentment in Ireland that taxpayers were sacrificed for the greater cause of Europe without receiving any acknowledgement from the EU's creditor states.

Ireland was ordered to pay a penal surcharge of 300 basis points on the orginal EU loan package, which Mr Noonan described as a "piece of foolishness" that has since been abandoned. "Bank shareholders were wiped out already so they had their sharp lesson in moral hazard."

Ireland has imposed haircuts on the junior debt tranches of rescued banks. Mr Noonan said this may now be extended to Bank of Ireland debt to help cover €350m of fresh capital it needs by next month. The state holds 15pc of the bank's equity.

Mr Noonan said Ireland is sheltered from the storm blowing through the eurozone since it does not need market funding until 2013, but the crisis cannot be allowed to drag on. "Some way will have to be found to create a firewall. The role of the ECB is a matter of debate. There may be legal difficulties in it operating in the same way as the Federal Reserve.Whether the ECB has a role in working with the IMF or EFSF (bail-out fund) is under discussion," he said.

Ireland has no "detailed contingency plans" for a eurozone break-up. "Obviously, we have thought about it, but it's a very remote possibility," he said.

Mr Noonan said the country will stay the course with unbending austerity, even though nominal gross national product (GNP) has already contracted by 22pc. Public wages have fallen 12pc on average under Ireland's "internal devaluation" policy to regain competitiveness within EMU. There are likely to be further wage cuts in the December budget.

"We have to face reality. There is no painless way, no soft option: we're going to cut spending drastically, but with social cohesion. We don't want situation we see in Greece with people on streets and the foundations of state under threat. We're not going that route."

Ireland demands debt relief, warns on EU treaties - Telegraph

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O sea, que Irlanda pidió el rescate (con el consiguiente coste social y recortes aparejados) para evitar que hubiera efecto dominó de su quiebra bancaria hacia Inglaterra, Francia, Holanda y Alemania; y ahora ve sorprendida porque no se hace lo propio (imponer un rescate oneroso) para evitar el contagio de las crisis de deuda pública en Hispanistán e Italia, donde el BCE ha salido a torear para salvar la partida (cosa que no hizo con Irlanda, lo que hubiera evitado su rescate), sin mucho éxito porque el riesgo de contagio sigue aún latente.

En otras palabras: Irlanda no está contenta con no ser un país "too big to fail", y amenaza con vetar las reformas de los tratados de la UE que propone Merkozy si no se le mejoran las condiciones del rescate financiero que le fue suministrado. (Hay que recordar que los Irlandeses ya han dicho "No" en algún referéndum anterior sobre tratados de la UE, y el Gobierno irlandés podrían no poner toda la carne en el asador para revertir esas tendencias en la opinión pública en caso de futuros referéndums sobre nuevos tratados.)


Mi opinión: esto viene bien, es otro palo en la rueda del proceso decisorio en la zona Euro, y nos acerca a la ruptura de la misma. Esto nos acerca al guano. Y el guano, hamijos, es necesario para purgar el sistema.

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Irlanda es un 0 a la izquierda, no importa a nadie.Que les dén.

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Irlanda podría haber hecho quebrar a la banca inglesa y francesa si hubiera hecho "el islandés". Es decir, podría haber acabado con el Euro.

Si eso no es nada...

Ahora imagínate que Irlanda se sale del Euro y entra en la libra esterlina. Imagínate que eso quiebra a Francia pero no a Inglaterra. Imagina que ves caer la Eurozona como consecuencia de la caída de Francia (estando Italia ya tocada).

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¿Y donde están los neolibs que salieron a cantar las alabanzas del modelo irlandes y lo bien que les iba con la aujteridad?

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