Dutch finance minister Jan Kees de Jager sent a further chill through markets, saying "holders of subordinated bonds in Irish banks will have to bleed" under the Irish rescue. The comment touched a neuralgic nerve, heightening fears that investors may be treated harshly under the bail-out terms for any other country needing a rescue.EURef's Richard North is gleefully cackling "Burn, baby, burn!" and who can blame him? It is just for kicks that KV is sporting a new badge (right hand side column top).
Meanwhile Tim Worstall notices a peculiar phrase uttered by Frau Merkel in What you desire may not be what you get
I will not let up on this because the primacy of politics over markets must be enforcedTo which Mr Worstall answers:
[T]the really important point is that while politics can influence markets, when it comes right down to it markets do have primacy over politics.A point well worth to remember (and live by!). Helen Szamuely also has a point to make about the situation viz.-a-vis Germany and Ireland : They WOULD pick the wrong argument.
No, not because of some lack of will, not because of some lack in the political regulation of markets: simply because all of the people acting as they wish is more powerful than telling people how they should act is. If 500 million of us, the population of the EU, decide that something is so, there’s pretty much nothing that politics or politicians can do about it.
In Ireland the effects of the crisis are already making themselves felt in a not so surprising way. Via ATW we learn of increased emigration from Ireland, with a nifty graph showing that 2010 was the year when the best and brightest are leaving Ireland in their own pursuit if happiness. One more added knock-on effect of the assassination of Ireland by Van Rompuy and his henchmen.
Elsewhere, Bloomberg is advising Ireland to take the lumps like men: Bust Is Better Than a Bailout for Irish Patient.
It might sound like madness for a drowning man to refuse a lifebelt. But the decision the Irish make in the next few days will shape the future of their nation for a generation.(h/t Witterings from Witney).
Ireland would be better off going bust than taking a loan. The conditions attached to a rescue aren’t worth it: Once it takes EU money, it will never get off the hook. And the Irish banks aren’t worth saving anyway.
And the latest, from Zero Hedge: It's Official: There Is Not Enough Money To Bail Out Spain.
[I]f and when Spain is bailed out, other bail outs will be irrelevant, as at that point the vigilantes will focus squarely on Germany. At that moment, nothing less than a complete dissolution of the currency union and an unmitigated monetization ala Weimar will save what is left of the productive powers remaining in Europe.Oh. Happy. Days...