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Posts tagged ‘Irish Times.com’

Ireland’s bailout

By Dan O Brien

GREECE’S BAILOUT – Dan O’Brien (Irish Times, 17th Nov. 2010). …..Extract

 The best guide to answering questions (on Ireland’s bailout) is Greece’s bailout. Greece is the only euro area country to reach a point where it was unable to convince financial markets of its creditworthiness.Once Greece reached that point in early April 2010, it began discussions with officials from the EuropeanCommission in Brussels, the ECB in Frankfurt and the International Monetary Fund (IMF) in Washington DC. If Ireland goes down the bailout route, the same troika of players will be involved.

Economic affairs commissioner Olli Rehn confirmed yesterday that Ireland is already in talks with all 3 institutions. This suggests that this point is not distant.

There will not be an option for Ireland to choose among the institutions from which it takes help, not only because they will not place themselves in a position of being played off against each other, but also because the European countries could exercise their vetoes at the IMF if any direct Ireland-IMF arrangement were to be contemplated (which it won’t be).

The Greek package was agreed on Sunday, May 2nd after three intense weeks of pressure on Athens. In Ireland’s case the time-frame would almost certainly be even shorter, for a number of reasons. First, the bailout financing mechanisms are already in place, whereas in the Greek case ad hoc measures had to be hastily set up. 2nd Ireland needs fewer reforms than Greece. Finally, there may not be abundant ill will towards Ireland, which did existed towards Greece, owing to the manner in which it deceived its partners which made tying down the package even more difficult than it might otherwise have been.

 IN THE CASE OF GREECE, THE BAILOUT PROGRAMME COVERED A 3-YEAR PERIOD. DURING THAT TIME THE GREEK STATE’S BORROWING

REQUIREMENTS WILL BE MET BY THE BAILOUT FUND, RATHER THAN THE BOND MARKET OR OTHER PRIVATE SOURCES OF FINANCE.

3 years was the minimum period of time believed necessary to give Greece even a fighting chance of implementing the profound changes it needs to allow its economy get back on its feet.

A bailout for Ireland would almost certainly extend over a 3-year period.

RUNNING UP TO THE END OF 2011. FIVE

QUARTERLY PROGRAMMES FOR 2012 AND EARLY 2013 ARE TO BE SET OUT IN A REVIEW OF THE ENTIRE PROGRAMME IN SPRING 2011.

In each of these time periods, a detailed checklist of reforms is set down for implementation. Towards the end of each quarter progress is to be reviewed. Money will be disbursed to the Greek authorities for the following 3-month period only if the commission, ECB and IMF officials adjudge that all targets in the preceding quarter have been met and complied with.

In reality, officials from other member states providing the cash also have a say, as demonstrated yesterday when Austria announced that it would withhold further payments to Greece because it was unhappy with the implementation of the programme.

The terms of the Greek bailout package are set down in a very dense 32-page document. Ireland’s bailout document would likely be slimmer, largely because Greece is more dysfunctional than Ireland and needs more reform. That said, the Greek plan provides a good guide to the sort of conditions that any bailout – even one that is spun as a bank rescue – would include.

 The Greek package covers budgets and the machinery of budgeting; public sector reform; and a range of liberalisation measures designed to open sectors of the economy in which competition is hindered by incumbents or legislation.

There are many measures in the 32-page Greek bailout document that could easily be envisaged as conditions for an Irish bailout.

Regarding tax and spending issues, conditions include the reform or outright cancellation of welfare programmes that are deemed ineffective, privatisation of State assets, cuts in capital spending, an immediate increase in VAT and a widening of the VAT base, increases in excise duties, a widening of the property tax base and the imposition of a luxury goods tax.

On public pensions, reforms include the linking of the retirement age with changes in life expectancy, cuts in the highest pensions, the changing of the base upon which public sector pensions are paid so that they are linked to average lifetime earnings, the lowering of the ceiling on pension payments and the restriction of access to early retirement.Cosseted professions identified in the Greek bailout programme for liberalisation include lawyers, pharmacists, architects and accountants.Other miscellaneous measures listed in the Greek plan that could be also imposed on Ireland include a major shake-up of … CIÉ, a new system of medicines procurement to favour generic drugs, and a system of electronic monitoring of doctors’ prescriptions.

What about corporation tax? Among the greatest concerns for Ireland is that those EU countries who resent this State’s low corporation tax rate would insist on it being hiked as a condition for a bailout. That the Greek bailout included “crisis levies” on “highly profitable firms” can only add to concerns in that regard.

You want to know who I am?

This article was sent in this morning and I thought it might be of interest to some of you.

I know I recognize lot of this man’s current life’s problems.
The sordid intervention of derivatives in all of our lives will sometime soon have to be faced up to
We are approaching the event horizon of this apocalyptical event
Everything is been sucked in and when it has consumed everything we will see the mother of all bubbles burst. With the announcement of the Anglo Irish Banks half yearly results and the results of Irish Life & Permanent, there is no mention of their derivative positions and the catastrophic losses there are still hiding from the public (Proof Anglo Irish deals in derivatives (CFD,s) you only need to read this article in the Irish times )http://www.irishtimes.com/newspaper/finance/2010/0827/1224277688678.html?via=rel

with the full knowledge of the current corrupt government
you have been warned!

By John Mele :
You want to know who I am? First, I’ll tell you who I was.
I joined the Marines when I was 18, went to Vietnam when I was 19, was an 0331 machine gunner, survived a tour of duty in heat and humidity in the mountains of northern South Vietnam near the DMZ. My rear base, the Rockpile, was the most remote base in Vietnam at that time, or so we were told. I survived that war and when I got home I used the GI Bill to get into the Boston Architectural Center, a night school of Architecture. I worked days a few years as a construction laborer and then as an office boy in an architectural office. I got married, was accepted to the University of Oregon and got my BA in architecture in ’77, worked, moved a few times (due to recessions), had two beautiful daughters, raised my family, etc.
After Nam I straightened out, as they say, and sailed a pretty solid course even when the seas of the economy were rough. We had our ups and downs, weathered financial recessions, lost one home and built another, finally settled in Knoxville, TN where I had my own architectural business mainly because I couldn’t work in a cubicle with 400 other architects.
But in ’09 that all changed. This is who I am now.
I am a former Marine, Vietnam war veteran, mad as hell and about to lose my home again. As far as I could tell, our entire financial system collapsed. I mean take forty to fifty years of “economic progress” and just dump it. That is in essence what happened. Many are still clinging to it, hoping for its revival. Something will recover but that something will never be what it was before. In ’09 they changed all the rules. The jobs disappeared, gone to China and India. Guys like me and those before us built this great land and were no longer needed. The bridges, the skyscrapers, the industrial centers, the homes, highways, dams and byways, all built by us, was now thrown away as the “financial system” did not need us anymore. Things called “derivatives” took our place. The US auto industry was on the ropes, banks were collapsing, Wall Street was in chaos, and millions saw the future as a place of unemployment or low paying jobs, if one was available.
So, I decided not to follow the same path I’d been on. With no prospects for work and a boiling anger about–what I felt–was a stolen future for me and my country, I decided to take some alternative actions. I had not failed, the system had failed me and I was determined not to give up but also not to be a fool. I was 60 and soon no matter what I did age would get me. Do I go down playing by the ever-changing rules of financial insanity that I was being forced into? Do I take any job and try to keep the home I spent a lifetime working for? In short, do I suck it up again, go to where I must and start over again at 60 and keep my mouth shut and show up for work and do this until I am dead?
Hell, I’d rather charge up a hill and give it my all to save my “SPIRIT”, because that is the most precious part of any of us. Think “Geronimo” and replace it with “Whitehorse” and you get an idea of WHY I planned this. One last gasp, one last charge, one last mission till the forces of my destiny would overtake me. Would I die trying, if so I was willing to face and accept that? Would Whitehorse save me? I had no idea. I had no idea! It all started with a joke I said to my wife. After repeating it a few times it made more sense than what I was seeing around me.

The inequalities of life invade all our lives. In essence we all make decisions within the confines of the hand we are dealt. At age 60 I decided to challenge that hand one last time and in doing so set my SPIRIT FREE.

I am cycling to Whitehorse, on a bike with a 65 pound pack, a 3700 mile trip…I’ll see you there, if I last…

More challenges to NAMA

A HIGH COURT challenge has been brought to the decision of Anglo Irish Bank to appoint a member of Nama’s board of directors as receiver to a number of properties in Co Clare.

Two businessmen have alleged Brian McEnery has a conflict of interest arising from his being both the receiver over their properties and being on the Nama board.

Mr McEnery was appointed last April as receiver arising out of some €15 million unpaid loans obtained from Anglo which, the businessmen allege, are “bound for Nama”. The appointment raises issues of public law, it is claimed.

It is claimed the role of a receiver, if he opts to sell the properties, is to get the best price available for the assets. As Mr McEnery was appointed last December to Nama’s board, his appointment as receiver could lead to a perception of bias even if no actual bias occurs, it is claimed.

There is no issue with Mr McEnery himself and he is a person “of the highest integrity”, the court has been told. It is also accepted Mr McEnery has not made any decision yet in relation to the properties.

Leave to have the appointment judicially reviewed was sought by businessmen John Flanagan, Ballyvara House, Doolin, Co Clare, and Gerard Lillis, Alva Cree, Kilrush, Co Clare, and two companies – Atlantis Development Ltd and Liscannor Properties.

Mr Justice Michael Peart yesterday granted leave to bring the proceedings against Mr McEnery and Anglo, with Nama as a notice party. The case was adjourned to October.

In seeking leave, Gerard Hogan SC, for the applicants, said Mr McEnery should not be appointed receiver to the properties because of his role in Nama.

The plaintiffs were concerned, due to Mr McEnery’s presence on the board of Nama, that the loans may be acquired by Nama at a cheaper price.

Mr Hogan also argued, given Anglo is now in public ownership, that Mr McEnery’s appointment raised issues of public law.

The bank had a public duty to ensure no risk of possible bias even when there was no actual bias, Mr Hogan said.

Mr McEnery is a former president of the Association of Chartered Certified Accountants and is a senior partner with Limerick-based accountancy firm Horwath Bastow Charleton, where he specialises in corporate finance and insolvency.

The applicants are seeking orders to quash the bank’s decision to appoint Mr McEnery as receiver. They also want declarations that Anglo Irish Bank, now it has been nationalised and is publicly owned, and Nama, as a public body, are both amenable to judicial review.

The applicants are subject to other proceedings before the Commercial Court, arising out of Anglo’s decision in March and April last to call in a number of loans relating to various sites around Liscannor, Co Clare, including a park-and-ride facility to service the Cliffs of Moher.

source Irishtimes.com

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