investmentweek.co.uk/investment-week/news/2029232/irish-election-result-derail-recovery
This is our leverage
We need a tough negotiating stance based on the desperation of our position.
Indeed. The government must not rule out burning the bondholders. For any negotation to be effective it must be backed up by a significant and credible threat.
It really a big game of Chicken, isn’t it?
It’s the fear that after burning the bondholders we’d have no where to turn for our day-to-day funding that’s preventing us from playing the card confidently, though.
Why am I seeing a picture of Enda humming the tune ‘Burn baby burn’ ? Have I heard a sketch in the distant past or something…
This is the issue - damned if we do, damned if we dont.
Then let’s burn the feckers and be damned. We need to go Lethal Weapon Crazy on their asses (remarking under our breaths that Riggs never actually blows anyone’s head off 
).
Our position is desperate. Sadly, the chances of Ireland not paying another paying in debt evah would not even derail the Irish recovery (when it starts to happen in the multi-nationals) never mind the european recovery.
It is a laughable last stab in the dark by investment managers who have bet the wrong way.
The realisation is growing that Ireland is not systemic to anyone other than Ireland…
Indeed. The country is bankrupt as a result of nationalising the bank debt. The only possible way of us getting are selves on the road again is to restructure the debt. This means haircuts and rescheduling of all debt.
true, but anything conceded to ireland must be conceded to other countries too. FG have been elected on the promise of changing the way Europe works
Yep, I agree to that. Indeed, it works the other way too… anything conceded to another country…
All we’re looking for is the same conditions as Greece; which has done fuck all to fix its problems, while we’ve already started to make massive cuts.
TBH, I’d rather not end up like Greece - perma-stagnation…
Cutting the deficit is good for us, it puts us in a stronger bargaining position. Bailing out ALL the banks, remind me again who benefits?
It also overlooks the underlying problem that Ireland spends vastly more than it earns.
Borrowing was easy in the good times but I’d bet that we wouldnt be far off our current position if the banks hadnt been bailed out; at least the position wouldnt be as urgent.
What is happening now is that many are conflating the deficit, the (erstwhile) national debt and the ‘banking’ debt.
That is what the EU is up in arms about and what they wont budge on. IMO, rightly so.
Ireland has a spending problem and it needs urgent fixing.
Any pan european debt reduction would have to be balanced by permanently ceding partial financial control; ever closer union.
The deficit is actually quite fixable because it is easily quantifiable.
We simply cut spending to match incomings.
The real problem is that we have taken on an unknown amount of bank debt that is ever-increasing and repaying this (with interest) will suck money out of the rest of the government finances meaning that the spending cuts to manage the deficit will have to increase to pay back the bank debt too.
The solution is very simple. Taxpayers are not liable for the delinquent lending of Anglo-Irish et al or the European bankers who loaned money to them.
We need banks to function so a debt-equity swap is on offer for BOI/AIB bondholders. Everybody else can sit & spin.
Sovereign debt never actually gets paid back. It’s like an interest only loan. When the term is up it simply gets swapped for more debt. What you’re interested in is GDP growth which erodes the cost of servicing the debt. Provided GDP growth is > interest rate + new deficit debt you’re OK. Of course that’s not the case at the moment.
You’re 100% correct on rest.
Ah good jaysus, of course, you can reduce the national debt, that myth of debt / gdp is swallowing the FF playbook theory whole…
We took a conscious choice, to keep the national debt static when we could have used the surplus to pay it down.
We then took a conscious choice, or rather our betters did, to load the bank debt onto the national debt.
But which of the mainstream countries has?
The reality is that it’s against right-wing economic thinking.
NOTE: I don’t agree with it but that’s the way it.