Keep an eye on Ireland

On the fringes of the news, we learn via Zerohedge that Ireland seems to be engaging in open rebellion against the Obsidian EUnion order.
Following Europe's decision to leave Ireland out in the cold, due to the country's ongoing unwillingness to pander with unilateral concessions to the global banking syndicate, the Emerald Isle has apparently decided to call the EU's bluff.

Reuters reports: "Ireland's government wants to impose losses on some senior bondholders in Irish lenders to reduce the burden on taxpayers from a prolonged banking crisis, a senior minister said on Sunday...Analysts widely expect the government to impose losses on senior bondholders in nationalized lenders Anglo Irish Bank and Irish Nationwide because they have sold their deposits and are being wound down. Hitting any unsecured unguaranteed senior bonds in Bank of Ireland and Allied Irish Banks (AIB), which amount to over 11 billion euros, would be more controversial."

Yet most controversial would be the fact that the Eurozone is now unable to control its wayward son, which seems set on actually following the will of its people than that of the plutocrats. And just like Tunisia set a precedent to the MENA region with an act many thought was unthinkable, should Ireland follow through with this near-revolutionary act of a debt impairing chain-reaction, most other countries are set to follow suit, leading not only to the inevitable end of the one currency block, expected for so long by many euroskeptics, but yet another US taxpayer funded bailout, as was revealed on Thursday of last week, when we observed the upcoming "threat to the international monetary system" as predicted by the IMF.
As of tonight, the MSM news in our small, damp corner of the world is that Ireland is still negotiating for more favourable terms (NL) on emergency financing by the EUnion and IMF to prevent 'emergency sell-offs' by Irish banks, precipitating a fresh round of bail-outs for which the Irish tax-payer will be made to assume ownership.

Actually, ZH is the only source I've read referring to the Irish defiance of the EUnion, so your mileage may vary, as they say. But I tend to agree (and hope for) the gist of the post: It Ireland imposes a haircut on senior and junior debts alike, banks and governments all over Europe will have to re-assess their posture.

Elsewhere, Irwin Stelzer of the Wall Street Journal, is having a field day with the newly arrived at European Stability Mechanism, comparing the lala-land resolve of the dedicated eurocrats to reality on the ground.
Greece and Ireland combined will cough up or guarantee €31 billion. That's right—the two countries that are on euro-zone life support. Portugal, soon to join them, is expected to contribute €18 billion. Spain, although doing a bit better, is exposed to €77 billion of Portuguese debt, the credit ratings of 30 of its banks have just been downgraded, and so remains in the sights of the bond vigilantes: It is counted on for €83 billion. Belgium, its credit standing already being questioned because of its governmental chaos and high deficit, is to drop a cool €24 billion into the collection box in cash and guarantees, and Italy, hardly the gold standard of sovereign debtors, another €125 billion.

Oh, by the way. This bailout mechanism doesn't become available until mid-2013. That means that Portugal, a government-free zone, its banks dependent on the European Central Bank for funds, its economy contracting, its ratings cut again by Fitch and by Standard & Poor's, almost out of cash and facing debt repayments of €10 billion in April and June, will have to rely on the existing bailout fund. No worry: There is enough to finance a Portuguese bailout, even without the agreed increase (how the boost is to be funded has not been decided) in the current European Financial Stability Facility (EFSF). But to be eligible for the bailout money the new government will have to adopt an austerity program of the sort Portugal's parliament has just rejected.
Mr. Stelzer also notes something we huddles grey masses of the EUnion would do well to remember: None of these defects will be addressed by the economic government Mr. Sarkozy has in mind. Instead, that 'economic government' is only meant to cement the hold the EUnion has on our daily lives, without local state governments running interference with old-fashioned notions of democracy and sovereignty.

Be that as it may, keep an eye on Ireland the coming days. After the shameful perversion of the 'vox populi' in the two referenda (see here and here), the Emerald Isle may yet prove to be the undoing of the EUnion.

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