At 5/15/11 09:24 AM, lapis wrote:
Like Ireland and every other European country, Iceland signed a treaty that forced them to pay a certain amount of insurance to depositors when a bank in their country collapses. The idea is to prevent a domino effect where each banks in Europe falls after the other because they all loan each other money. Since the state guarantees that the depositors will get at least some of their money back, the threat of a bank run is mitigated.
This works when gaurantees are 100% - however that's neither reasonable nor possible and large account holders WILL run on a bank that's smelling fishy. While that's not a complete bank run, it can hurt a bank alot as this further reduces investor condifence but also reduces the amount of currency at their dispsal.
Nationalisation is a different issue: the Irish government could have just taken over the insurances and let the banks fall after that. I think the banks were nationalised to prevent scores of Irish people losing their pensions, and the EU didn't push Ireland to do this.
The pensions are getting hammered, though. My parents are looking at theirs aghast and I'm sure alot of people are. So that was a big expensive thing that didn't work, buying the pensions probably would have been cheaper.
In any case, do you really care so much about the fact that the ECB defends the case of German banks or are you just pissed off at the fact that your tax money is used to pay off foreign depositors?
Not only that it defends the German banks but that it defends its own actions. You infer the ECB is centralized later on in this discussion and you claim that they can't micro-manage. And if that's true, then why the hell didn't they ask the German banks what they wanted all this money for? These sums were not small change and the lack of transparency of the whole affair reeks of shit, to be blunt.
Because if Ireland has not joined the European Economic Area (which requires deposit insurance) and not guaranteed any money to foreign depositors, Irish banks would have been much less competitive than their less risky European counterparts and the prosperity during the past 20 years would have been reduced.
Yes, we would have grown slower. We also wouldn't have fallen as hard. This feast-fast system isn't good for my metabolism. We attempted to implement economic models that couldn't fit Ireland too quickly, and mostly because Ireland hadn't grown beyond Primary Industry. Putting us in Europe meant we couldn't really rely on Farming or Fishing (They made sure of that) but we had neither the infrastructure nor the number of qualified people to start the "Smart Economy" model. France, England and Germany do well from it, sure, but we goofed the shit out of it.
We decided that the best industry to make loads of money from was housing, and decided that maybe people would liked to own second homes and such sillyness. Maybe everyone on the Dole would like luxury condos in Dubai on a man made island shaped like Parnell's muttonchops.
Both options had their risks and in hindsight it's always easy to judge which choice would have been the best. Ireland is mainly hit harder than other European countries because of a housing bubble and the shady business practices of the Anglo Irish bank. If Ireland had not been hit so hard and Icelandic banks had owed Irish depositors 200 million euros then I'd guess that you'd also want them to pay it back.
Not really, I'd say that industry can be responsible for itself. The fact that we've allowed a system where the state depends on the well-being of certain private bodies is our own fault and that nows a good time to fix it. We are owed money, incidentaly, just the individuals involved are both Irish and more or less obsolved of their sins.
Meh, you owe the fact that you can still take loans at all to the ECB. Had Ireland simply said to all foreign depositors of Irish banks "big deal, buyer beware" then no money-holding entity in thw world would have loaned you any money unless you paid murderous interest rates -
I love this one. Let's do this one. So we refute our 270 billion debt at 4% annual interest - I'm lazy so let's call this 320 billion as we discover a horse breed that shits the most valuable resource on the market at the time in 2014.
Now let's say we bail and we become a sort of Africanised "High Risk" body. We're talking 20% interest rates here - fucking HUEGGG. And let's say we need 400 million every year to keep our heads above water with cutbacks, and let's assume it takes 10 years for Price & Price to forgive us for our sins.
So that's 4 billion + 20% for 10 years. According to a handy internet CIC that's 24.77 billion.
So, which is it? 280 Billion or 24.77 Billion? U gaiz choose. Hell, double it by buying pensions. Add 10 billion to buy Eircom (who are about to shit their pants and die...again). It's still better.
Right, but some of the money that they made went to the Irish government who in turn (partially?) financed your education. You did profit from them, and by extension I don't find it so unfair that you have to carry some of burden now that they've fallen.
I paid VAT, my parents payed tax. I'd say my family and I payed for my education. We didn't pay enough tax for every teacher who thought me. But for 1/30th? Yeah, easily. I don't think even the poor MAKE money from a government during good times. As much as I hate media rhetoric it's fair to say this : The wealthy are the only ones to tangibly benefit from both the Celtic Tiger and the Crisis - it's a buyers market in many senses right now.
Then blame your parents instead of the EU.
I also blame the electorate, they get mad when I say it though.
That'll be one Hail Mary for each euro your country owes to foreign depositors.
Call me Bleeding Gums Mary.
They can't possible be expected to carefully investigate all economic acticity in the entire Eurozone. I'm all for decentralising this sort of control and having each member state make sure it's own back yard is clean.
What about just the biggest loans? Like the ones they made to Germany? It seems like the ECB was for decentralisation, they just did it in an informal process that lead to noone keeping an eye on anything. Ever.
Eh. The system is sick, but massive reform is unrealistic. Ireland (and the whole of Europe for that matter) is part of a global market and you'll have a tough time reaching agreement on market reform with the US, let alone with China or Russia.
No one is saying anyone will agree, I'm just here to make the arguement until governments are too impoverished to argue against it. China is probably your best bet at the moment, since all those dollars they bought are devalueing and every time they try and buy something else with it everyone else starts buying it - vicious cycle. Could kill China or even the dollar.
By the way, I'm kind of busy doing holiday-related stuff at the moment - it already took me three days to find the time to respond to this thread - and since I'm leaving the country tomorrow, don't be surprised if I suddenly bump the topic after a week or something.
Pacific Coast? Enjoy!