3 Eurozone Countries With Debt-to-Income Ratio Over 300%

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Forget the usual Debt-to-GDP ratio that is thrown about when discussing a countries ability to pay. A more realistic ratio is between its debt and its income since debt is paid from a governments income. When you consider this comparison, then 3 countries in the eurozone have  a ratio greater than 300%. Worse still is the US with a debt-to-income of 304% in 2012.

Ireland, Greece and Portugal are labouring under debt-to-income ratios of more than 300%, according to figures that expose the indebtedness of eurozone governments in relation to their government revenues.

The measure, intended to show governments’ abilities to pay debts, shows Ireland’s total debt in 2012 was €192bn (£163.1bn), or 340% of the government’s income. Ireland came a narrow second in the table to fellow bail-out recipient Greece, which has amassed an even worse debt-to-revenue total of 351%. Portugal – which has also received aid from the troika of the International Monetary Fund, the European commission and the European Central Bank – came third with a debt-to-revenue ratio of 302%, while Britain was sixth last year on the list of 27 European Union member states, with a debt-to-revenue ratio of 212%, according to calculations based on European commission figures.

 Debt figures are usually calculated as a ratio of a country’s national income and expressed as a proportion of GDP. But national income figures reflect activity across the whole economy, in both the public and private sectors. governments must pay debts from tax receipts and other government income, not the income for the economy as a whole. Some analysts argue a government’s debt-to-revenue ratio provides a clearer picture of its ability to fund annual debt payments once interest rates are taken into account.

The US is in even worse shape than Greece. Its $16tn (£10tn) debt is the equivalent of 105% of GDP, but more than 560% of government revenues. Washington’s debt payments are cheap after a plunge in the interest it pays on government bonds, but with revenues of only 14% of GDP compared with about 40% across much of the EU, its ability to pay is weakened.

Ireland, which is often commended for its recovery from the banking crash, has seen a sharp rise in its debt-to-revenue ratio in the last four years. In 2009 the ratio was 187%. A year later it had jumped to 262% before reaching 340% in 2012. However, the country appears to be in better shape when debt-to-GDP figures are used. It ranks fourth, with a 117.6% ratio, after Greece, Italy and Portugal.

Greece’s performance, by contrast, has improved. It has pushed through a huge clampdown on government spending and has seen its ratio fall from 402% in 2011 to 351% in 2012.

Some of Europe‘s strongest economies have jumped up the league table of indebted EU nations when the debt-to-revenue measure is used. Germany has a ratio of 181%, Malta’s is 178%, while France has a ratio of 174%, all higher than countries that are often cited as troubled and at risk of default such as Slovenia (120%) and Hungary (168%).

The healthiest economies according to the debt-to-revenue measure are the Nordic nations, where Sweden enjoys a 75% ratio, Denmark a 82% ratio and Finland a 99% ratio in 2012.

In the aftermath of the 2009 banking crash, the US investment bank Morgan Stanley argued that debt-to-government-revenue ratios should be included in any discussion of a possible sovereign debt default.

Analyst Arnaud Marès, who has since left the firm, said in August 2010: “Whatever the size of a government’s liabilities, what matters ultimately is how they compare to the resources available to service them. One benefit of sovereignty is that governments can unilaterally increase their income by raising taxes, but they will only ever be able to acquire in this way a fraction of GDP.

“Debt/GDP therefore provides a flattering image of government finances. A better approach is to scale debt against actual government revenues. An even better approach would be to scale debt against the maximum level of revenues that governments can realistically obtain from using their tax-raising power to the full.

This is a function of the people’s tolerance for taxation and government interference. Seen from this angle, the US federal debt no longer compares quite so favourably with that of European governments.”

In 2010, US debt to revenue was 365%.

Source: The Guardian

Ireland The Corporate Tax Haven

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Despite what Irish Taoiseach Enda Kenny says, IRELAND IS A TAX HAVEN how else do you explain the following:

Company Income Tax Paid Rate
Apple €17bn €8m 0.05%
Google €9bn €22.2m 0.25%
Facebook €1bn €3.2m 0.33%

Meanwhile Irish tax payers pay over 50% income tax (income +USC) if earning above €33k. Not only is income tax being increased by stealth (reducing tax credits and increasing numbers paying taxes) but also new taxes are being introduced such as the property tax and water tax. What a sweet deal the big corporates have.

Reggie Middelton: Irish Banking System Is The Next Cyprus

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Reggie Middelton has analyized the Irish Banking system and his findings are disturbing. Since 2008 not only were debts hidden and assets double counted for the stress tests but banks have had to pledge all assets to access the TARGET2 system which is completely abnormal. All the while, silence from the Irish media. It looks more and more like Ireland is going to “pull a Cyprus”.

More Oil Off Irish Coast

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Just like Cyprus, Ireland is strongly suspected to have huge oil and  gas reserves off the Irish coast. In fact many test wells confirmed such was the case but have been capped for a later date. A quick look at Providence Resources web pages confirm that discoveries as far back as 1981 have been capped for a later date:

The discovery well (35/8-2) was drilled by a consortium led by Phillips Petroleum (and included Atlantic Resources, the predecessor company to Providence) in 1981 and flowed c. 1,000 BOPD and c. 5 MMSCFGD from one of four logged payzones of Upper Jurassic age. Post-drill analysis by Phillips suggested that while the discovery could contain resources of up to 1.1 TSCFG and 112 MMBO, it was deemed uneconomic due to a combination of low commodity prices, high production costs and lack of gas infrastructure in Ireland at the time. Providence commissioned a series of independent reports which suggested that the field contains estimated contingent resources (2C) of 1.4 TSCFG and 160 MMBO with significant upside potential both within the field and in adjacent prospects.

Now Exxon is looking to exploit further its Dunquin field as reported in the Irish Independent.

Oil giant ExxonMobil kicks off a $160m-plus (€125m) drilling programme off the west coast of Ireland this weekend with hopes that confirmation of major fossil fuel reserves will transform the country’s economy.

The US company is planning to drill test wells over a four-month period at two prospects at the Dunquin licence area in the Porcupine Basin, 200km off shore.

Previous data has suggested that there could be over 300 million barrels of oil and 8.5 trillion cubic feet of gas between the two Dunquin prospects.

If they could be proven and then extracted, such finds would mark one of the biggest ever global discoveries of oil and gas and be a game-changer for Ireland’s economic fortunes.

Interestingly TPTB and the lamestream media like to spin it that its a long shot, as follows :

But despite the 200 or so wells drilled off Ireland’s shores in the past number of decades, only two have resulted in commercial fields – Kinsale and Corrib.

but the 1981 Spanish Point discovery does confirm that a lot of wells are being sat on until its commercially viable. It makes sense for the large oil companies to exploit the easy finds first or indeed to carve up deals to get access to other countries as spoils of war.

Also the Department of Communications, Energy and Resources estimates that a total reserve potential of over 10 billion barrels of oil equivalent (bboe) of the west coast of Ireland. The Corrib field alone is worth €9.5 billion. This does not even take into account the areas in the South, East or the disputed Rockall in the North which are long known to hold oil. SIPTU created a very interesting report as to Ireland’s potential.

Many other oil companies will be watching.

Located at a point in the Atlantic where the ocean is 1.6km deep, ExxonMobil’s drilling programme is being eagerly watched by oil companies from abroad and Ireland, including Petrel Resources, which has an exploration block just 35km away from the Dunquin prospect.

ExxonMobil controls 27.5pc of the Dunquin prospect, with Italian firm Eni holding another 27.5pc.

Spanish energy firm Repsol owns 25pc and UK-based Sosina has a 4pc interest. Irish exploration firm Providence Resources has a 16pc interest in the prospect. A major oil or gas find could catapult its shares higher.

The Dunquin prospect – where the reserves are as deep as 3.6km under the seabed – is one of the most important exploration areas for Providence, which is headed by Tony O’Reilly Jnr.

Providence is also betting that it could have a major oil find on its hands at a site called Barryroe, which is close to the Kinsale field. The company reckons that there could be 280 million barrels of recoverable oil at the Barryroe prospect.

ExxonMobil has spent $20m to bring the exploration rig from west Africa to Ireland’s waters. The rig is owned by Norwegian group Ocean Rig. ExxonMobil will spend over $1m a day on the drilling activities, which are expected to last between 90 and 120 days.

The Department of Transport has already issued a warning to shipping in the area. It says that the semi-submersible rig, called the Eirik Raude, will be supported by supply vessels operating out of the port of Cork.

A 500-metre exclusion zone will be enforced around the rig for the duration of the drilling.

“All vessels, particularly those engaged in fishing, are requested to give the Eirik Raude a wide berth and keep a sharp lookout in the relevant area,” said the department.

The port of Cork is also hoping that it could become an epicentre for Ireland’s oil-and-gas industry if offshore reserves are proven.


Ultimately to understand how corrupt Irish politicians have given the countries reserves away, basically for free, the following link explains all.


Source: Irish Independent

Ireland to Sell 80Yrs of Harvesting Rights To Its Forestry, To Save 3 Weeks Of Interest Repayments

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As a condition of the IMF/ECB/EFSF “Troika”  loan for the amount of  €67.5bn Ireland must generate €2 billion from the disposal of State-owned assets and companies. As part of this, the government has plans to sell off the harvesting rights to the states forestry for the next 80 years.

The proposed €600 million that they will receive would pay off 0.4% of the national debt currently standing at €140bn, or to put it another way, 3 weeks loan interest on the national debt.  The Irish Timber Council said the proposed sale could lead to the closure of all ten of Ireland’s sawmills with the loss of 2,500 jobs. Coillte the public body in charge of the forests which accounts for 7% of the landmass of Ireland employes over 12,000 people whose jobs are at risk. The amount raised would potentially be only half of what the country would lose in lost earnings, redundancies and costs of replacing the trees.

How ironic that Labour, one of the government parties looks to have backtracked on another promise. In their election manifesto (p36) , Labour had a commitment to forestry as follows



Thank you IMF 😦


Exports Keep Ireland Alive For Now

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Ireland maybe on the verge of an EU deal to push out debt payments for 12 to 15 years but it has been its exports that have managed to keep the nation afloat. In fact exports make up to 106% of GDP which has enabled it help trade its way out of the crisis in spite of the harsh austerity that has been imposed.

Ireland will export as much as India this year, and more than Brazil, fruit of an industrial policy dating back to the early 1990s that has made the country a hub for global pharma, software, medical equipment, and financial services. It will rack up a very German current account surplus above 4pc of GDP.

Exports make up 106pc of GDP, compared to 35pc for Portugal, 30pc for Spain 30pc, 29pc for Italy, and 21pc for Greece. Ireland has a much higher trade gearing than Club Med peers, and that is what has kept the country afloat despite a 26pc collapse in domestic demand. Growth was 1.5pc in 2011 and 0.9pc in 2012, better than the EU average.

The export story is by now well-known. The global drug giants almost all have plants in Ireland, employing 44,000 people and producing half the country’s merchandise exports, though this may be losing its edge. The country is facing a “Patent Cliff” as a clutch of drugs – such as Pfizer’s statin pill Lipitor – come off patent in the US. It is the reason why Irish exports slipped 15pc in December.

Microsoft, Google, Facebook, Twitter, and a host of household names have regional headquarters in Dublin, whether drawn by a corporation tax of 12.5pc or by the critical mass of a high-tech skills. How much value is added to the Irish economy is an open question. Google rotates some 45pc of its global revenues through Ireland under transfer pricing schemes.

Even so, Ireland is clearly a different animal from the Greco-Latins. It never had a seriously misaligned currency within EMU. It had a misaligned monetary policy that set off a credit bubble. Real interests set in Frankfurt averaged minus 1pc from 1998 to 2007 (compared to plus 7pc in the early 1990s). As Irish eurosceptics foretold, the effects were ruinous.

The country has since deflated the froth. The gap in unit labour costs with the EMU-core has been closed again, at least on paper. “We have cut costs right through the economy with an internal devaluation of 15pc or 16pc,” said Mr Noonan.

One can quibble with the claims. Nearly all the gain in labour costs has been in the non-tradeable public sector – nurses, policemen, teachers – where wages have been slashed 14pc, with another 5.5pc to come. Productivity levels have been flattered by the annihilation of the building industry. “Private wages have declined only modestly,” says the IMF in its latest report.

Yet the point remains that Spain has not begun to see this level of deflationary shock. Were it to try with such a closed economy, it would tip into free-fall, push the jobless rate above 30pc, and cause the debt trajectory to spin out of control. As for Italy, its unit labour costs rose as fast as Germany’s last year. Its deflation lies ahead.

Ireland not out of the woods yet!

Club Med can take no comfort from Ireland’s success, but is even Ireland itself out of the woods? The budget deficit is still 8pc of GDP five years into the ordeal, and public debt is already nearing the limits of viability at 121pc of GDP this year.

Dublin has pencilled in a 3pc deficit by 2015, but dissidents say 6pc is more likely. The IMF warns that a “stagnation” scenario of 0.5pc growth a year into the middle of the decade would cause the debt ratio to spiral up to 146pc by 2021.

That is a serious risk as Europe persists in botching macro-economic policy, and US austerity threatens the fragile world expansion later this year.

Investment has collapsed to 10pc of GDP.

This is the lowest in recorded Irish history and the currently the lowest in the EU. “If this does not recover over the next couple of years, I’ll be worried”, said Rossa White from the National Treasury Management Agency.

Indeed, it is the crux of the matter. Spending has been slashed through the muscle and into the bone. This presumably is what Laszlo Andor, the EU employment commissioner, was talking about last week when he decried a slash-and-burn policy in the name of competitiveness that is tipping the crisis economies into a “downward spiral” and making it even harder to cut control debts. Are his colleagues in the Berlayment listening to him?

A mass exodus of 40,000 to 50,000 each year to the four corners of the Irish Diaspora have kept unemployment down to 14.1pc, but 60pc of those left on the rolls have been out of work for over year — the highest rate in Europe — and that is where the “hysteresis” effects of lasting damage bites hardest. It steals from growth from the future by degrading work skills.

Troika has done more damage to Ireland than the English ever did in 800 years.

Irish trade union chief David Begg was speaking with poetic licence last week when he accused the Troika of doing more damage to Ireland than the British Empire ever did in eight hundred years, snapping that the English had at least left some “beautiful Georgian buildings.” Needless to say, he has not forgotten the Wexford massacre and the potato famine, and nor have we at this newspaper. Yet he made his point.

“When we meet the Troika, we tell them that austerity is not working, and they tell us that it is. It is a dialogue of the deaf,” he said.

Mr Begg said he had come to realise that EMU is constructed in such a way that the “entire burden of cost adjustment” falls on workers if there is macro-shock. He is right. An internal devaluation is achieved by forcing unemployment to such excruciating levels that it breaks the back of labour resistance to pay cuts. It is the polar opposite of a currency devaluation that spreads the pain. Note that Iceland’s unemployment is just 5.4pc today, and Britain’s is 7.7pc.

“Such a callous disregard for distributional justice – which we have witnessed in this country over the last five years – is a fatal flaw,” he said.

“For much of its history, European integration has proceeded on the basis of a ‘Permissive Consensus’. European citizens thought it was a good thing, or at least did no harm. I doubt that view is still current. From what I hear in the circles in which I move, today’s labour movement is disaffected from the European project,” he said.

“What will happen when people eventually realise that they are trapped in a spiral of deflation and debt. We may reach the tipping point,” he said.

Europe’s labour movement is the dog that has not barked in this long crisis. Bark it will.

Source: Irish Independent

Your Banks Mess Up, But Its Your Fault

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Wolfgang Schauble, Germany’s Finance Minister is not one for holding back when it comes to pointing out the ills of other countries. Schauble has clearly laid the blame for Ireland’s bank collapse at the hands of the Irish. While partly this is true, he neglects the enormous part played by the ECB. It was the ECB’s interest rate decisions which Schauble’s Germany benefited from, that caused credit bingeing countries all their problems. He also neglects the ECB’s decision to force the Irish taxpayer to pay back gambling bondholders and help keep German banks afloat.
If that’s the best analysis Schauble can do regarding Ireland then God help the German taxpayers because I wouldn’t trust this lawyer to run my finances. When it comes to German banks exploding, Schauble’s attitude is, it’s never the banks fault. I woudn’t fancy been forced to bail out German banks along with bailing out the rest of Europe.
Wolfgang Schauble, Germany’s powerful federal minister for finance, has said it is all Ireland’s fault its banks collapsed, plunging the economy into a deep recession, and absolves reckless European bondholders of all blame.

In a frank interview for a new documentary called State Secrets and Bank Bailouts, Schauble dismisses claims that European bondholders should be made share in the responsibility for unsustainably pumping up Ireland’s banking system with billions.

“The cause in Ireland is something Ireland itself created – not Luxembourg, not France, not Germany, but Ireland – and it benefited from it for some time,” Schauble claims.

“Then everyone has to bear the consequences of a wrong-headed policy.”

In the documentary, presenter Harald Schumann, a former editor of Der Spiegel, asks Schauble to publish a list of the bondholders who cashed in from the German-backed decision by the European Central Bank not to make them bear the cost of banking recklessness but instead to shift this bill on to the citizens of peripheral European states like Ireland.

“Why don’t you publish a list of creditors so we can have an informed debate about it?” he asks. Schauble dismisses this view as being “naive.”

“[Banks are] very intermingled. And if one bank is not solvent anymore, then it will immediately trigger doubts about the solvency of the next bank because it may have credit at the other,” Schauble states.

“Everyone should solve their own problems. If everyone swept in front of their own door, the whole neighbourhood would be clean,” the German politician added.

“The Irish were very aware that their banks were less stringently supervised then the German banks,” he said.

Most economic common sense in Ireland unfortunately comes from independent politicians (the mainstream politicians are the best money can buy). In this case Stephen Donnelly easily dismisses Schauble’s argument.

In this major documentary, independent TD Stephen Donnelly disputes Schauble’s views of the Irish crisis, which are widely accepted in Germany.

“The gun was held by the European Central Bank,” Donnelly states, “The suspicion is that the European Central Bank said you will continue to pay these bondholders to whom you owe nothing or we will pull the emergency funding out of your banking system. Thereby collapsing your banking system, thereby collapsing your economy. To me, that is gunboat diplomacy.”

Former finance minister Brian Linehan backed up Donnellys claim before he died stating that Trichet made him bail out the bondholders. Even current finance minister Michael Noonan claims to have the letter from the ECB forcing Ireland to bailout the banks at the taxpayers expense, otherwise emergency liquidity would be withdrawn.

Source: Irish Independent

Economic Growth That Generates Poverty

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A very interesting concept whereby countries that generate surpluses end up causing poverty to its own people. Ireland being a great example of this. The Troika demand that goods and services generated, are exported all the while wage reduction and austerity are forced on the people.

The extreme form of what Adam Smith called a “folly” occurs when surpluses finance poverty and economic instability. Two infamous twentieth century examples were the German reparation payments after World War One, and the Latin American debt crisis in the 1980s and into the 1990s. In both cases, external powers pressured governments to generate trade surpluses in order make payments to foreign governments (in the case of Germany in the 1920s), or to foreign banks (the Latin American countries in the 1980s). The former led to Hitler and the latter to a generation of impoverishment.

In effect, these externally-imposed, government-generated surpluses take goods and services from residents and transfer them to foreign governments, banks and corporations. This type of trade surplus falls into the category of what Jagdish Bhagwati, the famous Indian economist (now at Columbia University), termed “immiserizing growth”, economic growth that generates poverty not improvement for a population. To put it simply, the country exports and the population grows poorer.

Armed with the ideas of “mercantilism” and “immiserizing growth”, we can have a look at the “Star Pupil”. The chart below shows why the Triad of the EC, IMF and German government (and the German opposition, it would appear) make Ireland the teacher’s pet. While the famous PIGS (Portugal, Italy, Greece and Spain) languish in stagnation or plunge into decline, Irish GDP has increased, by 1.4 percent in 2011 and one percent in 2012. Not great, but looks good compared to decline. More important ideologically, the Triad assures us that this growth shows that “austerity works”. It shows the PIGS the shining path to recovery.

Here is the logic of the Troika

In case we missed it, the path to recovery runs along the following road. Austerity forces down wages, lowering production costs. Lower costs result in export competitiveness, and the growth of exports rejuvenates the economy as a whole. The rejuvenated growth reduces the fiscal deficit by raising tax revenue that can be used to pay foreign creditors. If the residents in the PIGS would show the discipline of the Irish, the euro crisis would soon end.

Who benefits from Ireland’s surplus?

The exposé of this ideological story would not be complete without pointing to the recipients of the Irish export surplus, the major banks in Europe that hold the debt of the Emerald Isle.

Even if by some miracle a mega-importer appeared on the world horizon (think China), the Irish path would still represent a road to misery. The chart below shows three economic trends since 2001. Unemployment rose continuously after 2007 in the land of the star pupil, with economic growth brining no reversal (measured in percentage of the labor force on the left). This rising unemployment rate went along with increasing exports per capita, from less than six thousand dollars per head in 2007 to over eleven thousand in 2011-2012 (measured on the right hand vertical axis).

While exports per head increased, domestic national income per person, total national income minus the trade surplus, declined, from $35,000 in 2007 to 25,000 in 2012, a drop of one-third. Domestic income per head declined in both the years of positive GDP growth. This appalling redistribution from the Irish to the European 1%, aka a trade surplus, was not the result of austerity reducing labor costs. For over twenty years Ireland ran a continuous annual trade surplus with no austerity to “lower costs” Under austerity imports contracted in Ireland because of falling incomes of the 99%.

Ireland, the Star Pupil of Immiserizing Growth, 2001-2012


This is Bhagwati’s “immiserizing growth” in real time, unrequited transfer abroad of almost a third of national income. The star pupil fails the test of a decent society, to protect the welfare of its people. And if the cause does not jump off the page, have a look at the final diagram. The vertical axis measures Ireland’s export surplus per capita, and the horizontal one measures domestic income per capita (GDP minus the export surplus). From 2001 through 2004, more exports per person went along with more domestic income per person. Then came the bad news, more exports, less left over for the Irish population to consume and invest.

Ireland may be the star pupil, but for the sake of the 99% its government needs to find different teachers and perhaps drop out of school.

Ireland, Star Student of Export-led Impoverishment, 2011-2012 (thousands of dollars)



Source: social-europe

Irish Town Marches For 100 Weeks To Protest Odious Bank Debt

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The people of Ballyhea in Cork, Ireland have spent each sunday for 100 weeks marching in protest against the bank debt that Irish politicians have forced onto the taxpayers of the country. The bravery of this town has almost been completely ignored by the Irish Presstitutes but story went international as Aljazeera has reported on it. One community has woken up generating hope and energy for others to follow. 

The European Central Bank has rejected Ireland’s proposals to restructure some of the country’s huge debts.

The government wants to avoid paying tens of billions of dollars over the next decade to underwrite a failed bank.

But one community in southern Ireland is unwilling to accept the terms of the bailout, blaming the government and banks for the economic crisis.

Al Jazeera’s Laurence Lee reports from the town of Ballyhea.

Source: Aljazeera

IMF Tells Ireland No More Austerity Next Year

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In October the IMF admitted that its Fiscal Multiplier(is not 0.5 percent but really 0.9-1.7) used for justifying austerity measures was wrong and in fact the implication was that austerity doesn’t work. Now shortly after Ireland announced the 2013 budget, the IMF has asked that Ireland does not implement austerity measure next year. It was worried that Irelands growth which is already weaker than forecast may hinder its ability to re-enter the bond markets.

IRELAND should not impose further austerity even if growth targets are missed next year, the IMF has said.

The agency also called on Europe to honour pledges to help make Ireland’s debt more sustainable, in its latest review of the country’s finances.

It outlined fears that growth may be weaker than expected during 2013 – but does not advocate more austerity.

Instead it advises the coalition that if it is failing to reach economic targets next year, it should not rush to bring in any further cutbacks, for fear of damaging any fragile growth. Instead the economic targets could be pushed out until 2015 to help recovery.

The IMF made the statement as it approved its eighth review of the bailout programme, authorising the release of a further €890m funding under the bailout terms.

It said Ireland had so far shown “steadfast policy implementation” with the conditions of the bailout programme, despite slower growth this year.

It is predicting more gradual economic recovery with growth of 1.1pc in 2013 and 2.2pc in 2014. But with many economists forecasting growth of less than 1pc in 2013, there is a real threat to Ireland’s chances of getting out of bailout and back to the markets as planned in 2014.

The IMF says that if growth is weaker than forecast and economic targets begin to slip, the Government should not introduce extra cuts or a mini-Budget. Instead the Government should wait until 2015 before taking extra measures, in order to protect whatever growth there is.

IMF deputy managing director David Lipton said: “The program with Ireland has now been in place for two years and the Irish authorities have consistently maintained strong policy implementation.

“The authorities have demonstrated their commitment to put Ireland’s fiscal position on a sound footing, with the 2012 deficit target expected to be met even though growth has been low.

“Nonetheless, if next year’s growth were to disappoint, any additional fiscal consolidation should be deferred to 2015 to protect the recovery.

“Continued strong Irish policy implementation is essential for the programme’s success,” said Mr Lipton.

In what may be a reference to the ongoing negotiations on repayment of Anglo Irish debt, Mr Lipton called on European partners to deliver on pledges to help Ireland.

“Ireland’s market access would also be greatly enhanced by forceful delivery of European pledges to improve programme sustainability, especially by breaking the vicious circle between the Irish sovereign and the banks.”

The IMF also said that the banking sector needs to be reformed and shored up to help improve lending. “Vigorous implementation of financial sector reforms is needed to revive sound bank lending in support of economic growth,” it said.

Source: Irish Independent

Irishman Takes Government To Court Over Illegal Tax

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The Irish Minister for the Environment is being taken to court along with other government minister and civil servants over the illegal LOCAL GOVERNMENT (HOUSEHOLD CHARGE) ACT 2011. The man in question has refused to pay the charge and is assisted in his case by Fitzpatrick Financial Solutions of Portlaoise  and the Common Law Society. Apparently the “Act” is against the Irish Constitution and the link to the summons which outlines the legal argument is below.

For the Irish Government to lose the case would have huge ramifications and this case could be used by many to avoid paying a multitude of taxes. A case of this magnitude you would expect to be reported by the MSM but as usual the Irish “presstitutes” are silent on the matter.

by Gabriel Donohoe  (Fools Crow)

The hard-pressed people of Ireland have had enough! They will no longer tolerate corrupt politicians working for vested interests and against the interests of the majority of the Irish people. They will no longer tolerate venal politicians working to feather their own nests by subserving a powerful moneyed elite. And they will no longer lie down like good little croppies and take what their lords and masters care to dish out.

In an unprecedented move, one Irishman has asserted his sovereign rights by standing up to the tyrannical forces of the State, a bought and paid for government that would unlawfully impose its will upon him. A gentleman from the west of Ireland (unnamed for reasons of privacy), after receiving a summons from Mayo County Council for failing to register for the infamous Household Tax, decided to fight back by summonsing three government ministers to the High Court, Hogan, Shatter, and Noonan, along with certain others, to answer for their fraud and deceit.

In a welcome reversal of roles, this courageous Irishman is now the Plaintiff and the ministers, et al, are the defendants. The Plaintiff charges that the defendants…

“…did and are wilfully conspiring to unlawfully, illegally, unconstitutionally and immorally coerce and force me, against my will, to make a declaration, that which is precluded by Bunreacht na hÉireann and by LAW.”

The Plaintiff further charges that…

“The herein named Defendants are in breach and contempt of the European Convention of Human Rights, the Universal declaration of Human Rights, and their collective and individual acts and actions constitute an offence under “the Non-Fatal Offences Against the Person Act 1997”.

He goes on…

” The Household Charge Bureau in and of itself, is nothing more than a front for an illegal and highly organised criminal gang. Whose aim is to willfully mislead, misinform and misdirect ME and the People of the Island into making “self-declarations” that are NOT MANDATORY, solely for the purpose of fraudulently and illegally coercing People into paying money to them, under the guise of the aforementioned Act.”

This is in truth a dynamite legal action which will have repercussions for years to come. It is long overdue. Is this the beginning of the fightback by the People against a gang of tyrants who have sold us all out for their own selfish interests?

Congratulations are due to Fitzpatrick Financial Solutions of Portlaoise for assisting this particular gentleman in putting his case together and to the Common Law Society for the marvellous work they are doing in helping to educate and inform the people of their sovereign rights and how injustices are being perpetuated against them.

This case was discussed at the Lay Litigation Day in Moate last Saturday which was presented by the Common Law Society of Ireland (not even remotely related to the discredited Law Society of Ireland). One of the salient messages of the day was that anyone who has received a summons from their county council for non-registering or non-payment of the Household Charge can now advise the court that it would be unwise to proceed with the case because of the above-mentioned Constitutional challenge in the High Court to this illegal Act.

A text of the summons:  Phil Hogan Summons 051212.

See also:


Source: foolscrow

Troika Want More Made Homeless In Ireland

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“Throw them out on the streets” cries the IMF. The Troika in its latest Memorandum of Understanding with Ireland is pushing for more house repossessions. The only reason it hasn’t happened so far is because the banks aren’t able to cover the losses and the State would have to go back to the taxpayer to further capitalize the banks. The fragile housing markets also would not be able to survive the shock of an avalanche of houses hitting the market coupled with the inevitable property tax.

Of course the politicians have framed it so far, that they are protecting the people’s interest. The country can ill afford this move currently, as the Troika well knows, but is pushing for this because of a repeal of the 1964 Act (used for repossessions) with a new Act in 2009 meant due to a drafting oversight, it applied only to loans taken out after December 1, 2009. The timing is lousy just as the Economic and Social Research Institute (ESRI) announces that Ireland has the highest proportion of households without a working adult out of 31 European countries and more than double that of the euro zone average.

The EU-IMF Troika wants the Government to remove a legal impediment constraining banks from repossessing properties tied to bad loans.

In the latest revision of Ireland’s bailout terms, published today, the Troika says the Irish authorities must introduce legislation remedying a flaw in legislation governing property repossessions.

Last year, Ms Justice Elizabeth Dunne found a failure to save aspects of old legislation when the Land and Conveyancing Law Reform Act 2009 was introduced meant the only registered properties that lenders could repossess for failure to pay mortgages were those for which they had demanded full repayment before December 1st, 2009.

According to the Central Bank’s latest figures, there were 167,000 mortgage accounts with €35 billion of debt in arrears at the end of June 2012.

At the same time, some 265 orders for possession were granted by the courts in the first six months of the year, down by almost 32 per cent on the same time last year, when 390 orders were granted.

The Central Bank’s head of banking supervision Fiona Muldoon recently criticised the banks for their slow progress in tackling mortgage arrears cases. saying the scale of the problem showed that “wait and see” had become the strategy of choice for lenders.

The latest update to the Troika’s memorandum of understanding with the Government states the authorities must move to remedy the flawed repossession legislation once adequate protections for debtors and their principal private residence were enacted via the proposed personal insolvency legislation.

The document also obliges the Irish authorities to publish banks’ reported data on loan modifications, including defaults of modified loans, “to permit analysis of the effectiveness of alternative resolution approaches”.

The bailout programme review also called on the authorities to halt overruns in health spending and to keep overall health expenditure below €13.6 billion next year.

Source: IrishTimes

Ireland: Taking €5bn From The People To Give to The Banks

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ireland toxicbankLater on today Ireland will deliver its 2013 Budget. The Minister for Finance, Michael Noonan will stand up in front of the Dail  and outline how it will take €3.5bn in new taxes and cuts and at the same time will deliver €5bn to the banks. That €5bn (including interest of €1.9bn) is for  paying Anglo Irish Bank’s debts. That same bank, while it primarily only lent to developers and wasn’t important to the Irish economy, was wrapped up years ago and doesn’t exist anymore. Yet, two successive Irish governments have insisted the Irish taxpayers still pay back the banks debts.

On top of that, this Irish Government has insisted that the Irish taxpayer pays €1.1bn into the big fat pension fund of the banks in AIB. This bank went bankrupt and had to be fully taken over by the state but the Government wanted to do the right thing and look after them.

So to sum it up, the Irish taxpayer cuts shafted in the budget to the tune of €3.5bn and the Government hands over €5bn to its banker buddies that doesn’t need to be. Now thats what I called “Dumb-ocracy”.

Stephen Donnelly (T.D.) put it a little better than I could.

You could do a lot with €3.5bn – like doubling the number of teachers in our schools, or building seven state-of-the-art hospitals. You could reduce income tax by one-quarter, or bring corporation tax down. If you were feeling all Fianna Fail, you could just give €2,500 to every household in the country.

But that’s not what the Government is going to do with its €3.5bn.

They are going to take it out of your pocket and give it to Irish Bank Resolution Corporation Limited, IBRC. That’s the company created to wind down the assets and liabilities of the former Anglo Irish Bank and Irish Nationwide Building Society, INBS. The €3.5bn coming in Wednesday’s Budget 2013 will go some way to the total of €5bn that they are due to give IBRC in 2013.

It is true that the headline figure looked at by the troika will fall by about €800m. But due to some accounting wizardry, a full €3.1bn of the €5bn to be paid to IBRC isn’t included. When you add that in, the deficit will in fact grow, by a whopping €2.3bn.

So on Thursday morning, when you’re poring over the papers trying to calculate how much less money you will have next year, remember this – whatever the amount, every single cent of it will be poured into the former Anglo and Irish Nationwide, to cover their losses.

How on God’s earth could this be? Here’s a quick reminder of what happened. Over the course of 2010, the Fianna Fail Government invented a loan from the people of Ireland to Anglo and INBS. They essentially wrote a €31bn IOU, promising to pay it to the bank and building society over the following 20 years. In 2013, we are due to make our third payment on this, of €3.1bn.

But it gets worse. Now that we ‘owe’ them this €31bn, we must also pay them interest. This amounts to an additional €17bn over the 20 years. In 2013, the interest payment is €1.9bn. So contained in the 2013 forecasts is a payment of €5bn to Anglo and Irish Nationwide – two dead casinos, both under investigation on numerous fronts.

We may, in time, get some of this money back. And the Government is in negotiations with the ECB on the promissory notes. It hopes to lower the payments, possibly by spreading them out over a longer period of time. We don’t know how this will pan out. We do know, however, that Budget 2013, and the €3.5bn ‘fiscal consolidation’ coming our way, assumes the full €5bn will be paid.

This is madness. It is immoral. It is economic lunacy, and it should not be paid. I don’t say this lightly. Not paying has consequences. The ECB would likely stamp its feet loudly. The troika would undoubtedly grumble. They may take actions to hurt us. So be it. There comes a point where you have to say ‘stop’. Surely we have reached that point in Ireland.

One in 10 children is now living in food poverty. Unemployment is high and static – it is more than one in three for those under 25. One in eight mortgages is in arrears. Our universities are being decimated. Two-thirds of adults now have less than €100 left at the end of each month after bills are paid. Surely, at this point, political leaders are meant to say, ‘We are simply not prepared to take €5bn from these same people to give to these failed banks’.

If you take this step, recovery seems possible. And there’s more. To the €5bn, let’s add the €1.1bn that AIB used to top up its pension fund. This €1.1bn is our money, after all. And according to the Taoiseach, it’s being used to ensure that the 2,500 planned redundancies at the bank can be voluntary.

Why? It’s a failed bank. And in failed companies, people lose their jobs. Harsh, but do you see the Government topping up the pension funds of other companies with your money? A small tax on financial transactions, mooted by many, including the European Commission, Labour MEP Nessa Childers and economist Paul Krugman, could raise €750m in Ireland. So between the promissory notes, AIB’s pension top-up and a Financial Transaction Tax, that’s over €6.8bn from the banks.

And there are other options for raising revenue. Tax exemptions amount to over €11bn in Ireland. Excluding just one-10th of this would raise a further €1.1bn. A tax on high-sugar, high-fat foods, while not to everyone’s taste, could raise nearly €200m.

On the expenditure side, there are numerous options for saving money that do not lead to worse public services. In some cases, they will lead to an improvement.

The Comprehensive Expenditure Review identifies over €1.4bn in spending reductions for 2013. Just three of these measures would cut waste by over €600m. These are the better use of procurement (€150m), increases in charges for private beds in public hospitals (€270m) and better use of generic drugs (€220m). It also seems reasonable not to pay out the €170m in public sector pay increments planned for 2013.

These measures amount to about €9bn. That’s with no cuts to child benefit, no household charge, no water charge, no reduction in the capital budget (for roads, schools, etc), no reduction in social welfare or income tax rates, no cuts in public sector pay.

The various pre-Budget submissions by opposition parties and civil society groups like Tasc and Social Justice Ireland contain a number of relatively low-cost ways of raising money and cutting spending. Measures like better tax enforcement and raising DIRT, capital gains and the excise on tobacco.

There are opportunities on income tax, the capital budget and high-end public service pay, and a raft of other efficiency measures throughout the public service. Between all of these, there could be another €1bn to 1.5bn. But let’s leave all of them out, for the sake of simplicity. Let’s just stick to our €9bn. Using €3.5bn of this to hit our troika target next year still leaves us with €5.5bn to invest.

Where would you like to start? Increase the microfinance fund from €90m to €1bn. Build a network of innovation centres for entrepreneurs. Get the next generation of broadband into the cities and ensure companies get all of it they need, affordably. Invest €1bn in our universities, reversing the decline in rankings and standards.

Get the career guidance counsellors back into our secondary schools and reduce teacher-pupil ratios. Increase support hours for students with learning difficulties and reverse the cuts to the Deis schools. Build the primary care centres. Reverse the cuts to home-help hours. Start hiring teachers, nurses and gardai again. In short – stimulate job creation, brush down the education system, support at-risk groups and reduce inequality.

We could even use some of the €5.5bn to accelerate the closing of the deficit, bringing us closer to financial independence and possibly alleviating some of the political fallout from not paying IBRC.

The difference between what I’ve outlined here and what’s coming on Wednesday is just one thing – the banks. Leadership during crisis involves tough choices.

Right now, here they are: do we tax and cut to continue paying the debts of Anglo and Irish Nationwide, for fear of the ECB? Do we pour public money into bankers’ pension funds for fear of compulsory redundancy? Do we shy away from a sensible tax on financial transactions for fear our bankers will flee to London? Or do we make a stand and begin to do things differently?

For four years now, two subsequent Irish Governments have consistently put the interests of banks and bankers ahead of the interests of the Irish people. This is down to a combination of incompetence, political cowardice and legitimate fear.

Spanish philosopher George Santayana famously said that those who cannot remember the past are condemned to repeat it.

On Ireland’s predicament, history is unambiguous – an austerity-only approach to this crisis has not worked. It isn’t working now. It won’t work in the future.

Sadly, I expect Wednesday’s Budget will show that the Government hasn’t yet learned the lessons of economic history. Only by taking a stand against the banks, and against the orthodoxy of the ECB, can we disentangle ourselves from the mistakes of the past and set ourselves on a path to recovery.

Source: Stephen Donnelly, Irish Independent

Time For Ireland To Default

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David McWilliams writes of Greece’s latest debt deal and how the smart option for Ireland now is to default. Of course when the country is run by school teachers and ex unionists there is no chance, as their only focus is securing funds to pay public sector wages as well as their own.

McWilliams has consistently argued against Irelands odious bank debt which lets face it is just being paid back for bondholders who gambled badly. Now is the time to push for a debt deal. Unfortunately the Presstitutes refuse to debate openly the merits of reneging on payments to bankers. Equally discussion of pulling out of the euro has been muted least it catch on.

ireland toxicbankGreece has defaulted again, and the financial markets have shrugged their shoulders. The euro remained unchanged versus the dollar. The Greek stock market even rallied. What does this tell us? It tells us that, as this column has argued again and again, the markets have no memory. Because it improves the overall position of a country, a debt restructuring will be welcomed since it adheres to the golden rule: a broken balance sheet is made better by less debt not more debt.

The media is reporting this as a “deal” in Greece. It is not, it is yet another default from a country where the economy is destroyed and needs to be nursed back to health rather than punished.

The big news for Greece and for us is that the troika has accepted that the country must be healthy in order to pay debt. This logic applies to Ireland too. Before we focus on the implications of the latest Greek default for us, let’s look at the broader picture. And before you think that I am advocating we follow the Greek route, I am not, I am simply pointing out the reality of the global economy and the realpolitik at the centre of Europe.

Effectively, the troika and the Europa group of Greece’s creditors have “agreed” (rather they have had their hands forced) to restructure their bailout loans. Interest rates will be lowered and even deferred to give Greece breathing room.

The crux of the agreement is that Greece’s debt-to-GDP ratio should reach 175pc in 2016 and 124pc in 2020. So 120pc has become the new sustainability.

It has also calculated that this is how capitalism works. In a crisis, the debtor and the creditor suffer, they both lose out and that’s how the system works. It is called co-responsibility.

The eurozone’s economy is in tatters, carrying too much debt, unable to grow. Italian consumer confidence has fallen to a record low this month. It is now at the lowest level since the series began in 1996. The only countries that seem to be keeping their necks above water in Europe are Bulgaria, Romania and Poland. This is hardly a reassuring picture, is it?

As the great deleveraging continues and unpayable debts can’t be paid, it would be surprising if Athens is the only government to choose to face down its creditors.

This all brings us here to Ireland as we continue to squeeze the economy dry, foisting austerity upon austerity and the local economy falters. Next week will be more of the same. We have been at this for five years now and there is no sign of recovery. It is increasingly clear that the Irish domestic economy will not recover as long as the crushing debt burden on the country’s young workers is not lifted.

And as we all buy and sell to each other in the local economy, your spending is actually my income and my spe- nding is your income. And if we all stop spending at the same time and the Government exacerbates this by slashing spending simultaneously, who is spending? And if no one is spending, who is earning? And if no one is earning, who can possibly be saving without earning?

So you see that what sounds good for the individual, such as “I am saving”, is only good for me if others continue to spend; if we all save at the same time, there is no income.

Now as these macro-economic targets that the Government and the troika set themselves are always debt expressed as a percentage of income, if our income is falling because no one is spending, then debt expressed as a percentage of income will be rising, not falling.

Now is the time to push for a debt deal, instead of the excuses pushed by the government for nearly two years as to why they haven’t.

This is why there has to be a debt deal for these hundreds of thousands of mortgages underwater. We already have 128,000 mortgages in arrears. This figure is rising consistently. There are 400,000 tracker mortgages which will only get more expensive as interest rates eventually rise over the course of the mortgage. These people will face default when this moment arrives and our banks will be bust again.

Now is the opportunity, when the EU is doing deals all over the place, to propose a big bank solution for Ireland’s mortgage debt. Such a deal would aid the Irish recovery, the EU would have the victory it so craves and ordinary Irish people would have the debt relief they so desperately need.

This would allow the economy to breathe again and it could be made the centrepiece of Ireland’s EU Presidency in the next six months. The EU President sets the EU agenda for the period when it has this role. Let’s not miss this chance.

Otherwise Ireland will become known as the country that never misses an opportunity to miss an opportunity. The Greek deal is an opportunity; let’s not throw it away.

Source: David McWilliams

Ireland Are The Lab Rats

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An article on Max Keiser that I couldn’t agree more with from a reader Mick O’Kelly regarding how the elites use countries like Ireland for their experiments.

Over the course of my life I have become convinced that we Irish are lab rats in an island laboratory undergoing experimentation.  As a people we have been serially used and abused by oppressors ranging from monarchs,  church,  state and banksters.  After the 1840s famine experiment the Irish ‘bailout’ model of the time,  including parish structures etc., (related to religion of choice),  was tested first in Ireland and subsequently rolled out over the rest of the British Empire.
In the 1950′s Archbishop Mc Quaid with Fianna Fail collaborators, who at his wish refused to protect women and children (Noel Browne’s Mother and Child Bill),  simultaneously presided over numerous orphanages and  industrial schools which in reality were state funded concentration camps for poor children specialising in torture through rape and abuse.
What’s less well known is that the same asshole gave ethical approval to fluoridation of drinking water through the “Guild of Saints Luke,  Cosmas and Damian” . This led to the Health (Fluoridation of Water Supplies) Act 1960, which mandated compulsory fluoridation by local authorities.  Another experiment in saving on state dental bills.
Health concerns associated with adding fluoride to water has seen it’s use discontinued in many European and other countries. The Irish Medical Board now claims that fluoride in the water here is not a medicine but a cosmetic.

In the mid 1980′s Broadcom,  in a somewhat positive experiment,  was  developing European telecommunications infrastructure and put in place phone lines/exchanges that could cope with Internet data in Dublin,  Athens and Lisbon.  Internet was not rolled out for general use until the 90s as it’s social impact was unknown and feared.
Interestingly /coincidentally,  from the onset of the Financial War in 2008,  Athens, Dublin and Lisbon have again been the laboratory.  My octogenarian mother describes the true reason behind the experimental system of reckless lending during the housing and credit bubble like this:

Make people desperate for a home or whatever, give them loans they can never repay so they will pay interest in perpetuity. Thus they become debt slaves and then as the debt is sold on, this becomes the modern equivalent of the old buying and selling of slaves on the slave auction block.

A step on from this is the concept of asset stripping and buying and selling whole slave nations.

I don’t know whether Main Stream Media in Ireland are part of the overall experiment but it continues to fail the public and constantly preaches it’s litany of ‘we must keep our good name and repay the fraudulent bankster gambling debts because we are a good moral people who pay our way’.
We are told we must kiss the ring of the new Financial archbishops and ‘morally’ pay tithes to these self styled immoral bankster overlords.

The banksters and their parliamentary minions are no doubt currently writing the finance act to be announced at next week’s budget, while in the  media  Punch (Phil Hogan, Minister for Environment, Local Govt. and Housing) and Judy (Joan Burton,  Minister for Social Protection) fight it out over which of their coalition  parties will take the bad opinion poll hit after the next round of austerity measures, which will include bankster archbishop led ‘reforms’ aimed at making the citizenry more divided, suicidal, ill and hopeless than ever before.
The big pieces this year are the introduction of a controversial property tax which last year 50% of the population did not pay, and the moving of all responsibility for Social Housing (including 93,000 people who are currently temporarily housed) from the Dept of Social Protection to the Dept of the Environment which is hemorrhaging funding from all quarters due to domestic economic failure. The other big ‘reforms’ include kicking people people who having diligently paid their enormous universal social charge,  off  unemployment benefit after 9 months  and putting them onto a means tested allowance in a country that is ‘means test central’ of the EU. All in an environment of economic contraction and epidemic unemployment. Child and pension allowances are set to be cut with the new property tax to be taken directly from benefits. Bankster welfare and pensions are of course to remain untouched.
Meanwhile corporate and high paid earner tax loopholes are staying in place. Recently I came across a personal story of a highly paid Doctor who was so appalled by the fact that under the current regime their wealth was increasing, while their patients were presenting with all manner of austerity related ailments, that they paid an enormous chunk of their own earnings to a social charity in a self imposed tax measure.

Compared with the Icelandic approach you can see clearly that governments have a choice whether they protect the financial elites or the ordinary citizens of their country.

In an interview with Der Spiegel the Icelandic Minister for Finance Steingrimur Sigfusson explains how to quickly overcome a financial crisis and get back to growth.

‘We are not going to preach to Europe that we have found the cure all. But it was important that we didn’t wait, but that instead we reacted immediately to symptoms of the crisis. In order to remedy the deficit, an increase in taxes to raise revenue was unavoidable, but savings measures were also necessary. We needed a mix of both and the strong conviction in preserving our welfare system.

SPIEGEL: What can you recommend to countries in crisis like Greece?

Sigfusson: First security for society. Then the lower and middle income classes must be protected from austerity measures. Their purchasing power must be maintained so that their consumption can contribute to the revitalization of the economy. Internationally that is often overlooked.’


Mexico To Restrict Cash Transactions

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Another country has joined the list for limiting cash transactions by it citizens. Mexico has signed into law, a ban on large cash transactions carrying a minimum penalty of 5 years in prison.

Large Cash Transactions Banned In Mexico … Outgoing Mexican President Felipe Calderon has signed into law a ban on large cash transactions. The ban will take effect in about 90 days and it is part of a broader effort to control monetary flows within the country. Under the law, a Specialized Unit in Financial Analysis operating within the Attorney General’s Office will be created to investigate financial operations “that are related to resources of unknown origin.” For real estate transactions, cash payments of more than a half million pesos ($38,750) will be forbidden and, for automobiles or items like jewelry, art, and lottery tickets, cash payments of more than 200,000 pesos ($15,500) will be forbidden. The law carries a minimum penalty of five years in prison. – Forbes

and as the Daily Bell put it

The power elite intends to lock down the world, it seems, in order to track every monetary transaction of any significance.

We wrote about this trend previously in “Spain Bans Cash.” Here’s an excerpt:

… As we have long predicted, the phony “sovereign debt” crisis in Europe is being used to justify all sorts of authoritarian measures.


these national bans continually pressure more and more freedoms, including the freedom of shielding one’s wealth from prying eyes. And that’s just the point …

In the last 2 years the following countries have made similar restrictions.

Source: The Daily Bell

Celtic Tiger Comeback My Arse

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Yesterday Irish Taoiseach(Prime Minister) Enda Kenny returned home empty-handed as yet again no bank debt agreement was reached during the EU summit. Many times since his party FG and their coalition parties Labour have come to power, they have promised to take on the bullies in Europe. Indeed Labours leader Eamon Gilmore came to power shouting “Labour’s way or Frankfurt’s way “. Embarrassingly for both parties it has been Frankfurt’s way.


The message from Merkel and Germany is clear. Thanks for bailing out German and French banks but its too late now for a deal, so just pay your debts.


Despite the Irish Government’s propaganda concerning the economy (including Enda Kenny appearing on front cover of TIME magazine), Eddie Hobbs (economists) writing in the Wall Street Journal summed it up best. 

Prime Minister Enda Kenny recently graced the cover of Time magazine. But according to data from the International Monetary Fund, Ireland has displaced Japan as the world’s most indebted economy. Government, household and nonfinancial company debt add up to 524% of Irish GDP. (The Central Bank of Ireland uses a different basis for calculating the debt of nonfinancial firms; its estimate for total debt would be lower than the IMF’s.) Funding this gargantuan load at an average cost of 4.5% would swallow nearly 24% of GDP—in other words, Ireland’s entire industrial output.

Yet still a Celtic comeback is prophesied. There are three huge problems with this myth:

• Irish taxpayers are still paying for the mistakes of Irish banks. Having started the crisis with a sovereign debt-to-GDP ratio approaching 20%, Ireland will have added another 100% before it’s over. And in a perverse reversal of democracy, two-thirds of this load was foisted on the Irish under pressure from the unelected board of the European Central Bank to save German, French and British banks—together with a panoply of other bank bondholders—from the consequences of their investment decisions.

Nowhere in the euro zone have so few citizens been asked to carry so much to save the union. But even today, with Ireland having met all the targets its creditors have set, there remains stiff resistance, especially from the ECB, to restructuring this part of Ireland’s national debt.

Relying on soft diplomacy, the Irish government seeks to sell its shareholdings in the functioning banks it saved to the new bailout fund, and to ease the punishing burden of repayments on the emergency liquidity provided to Anglo Irish Bank by extending the loan term to 40 years. The total plowed into banks is €64 billion, about 40% of Irish GDP.

• Irish household debt is still unsustainable. According to the IMF, household debt, which currently is as large as Ireland’s national debt, will stand at 185% of disposable income in 2017. The Irish are expected to arrive at this level from a peak of 210% by saving 14% of their income, nearly half of which would have to be redirected into debt repayments. So a decade after the crisis began, Irish household debt will arrive at a level well above the starting point of other crisis economies.

One in five Irish mortgages is in arrears. Yet four years into the crisis the Irish government has failed to introduce a modern, balanced and dignified insolvency regime, relying instead on a mishmash of laws, many of them Victorian and one of them, the Sheriffs Act, dating back to the 13th century.

Modern insolvency legislation would at the very least provide timelines to work through distressed debt. But such reform is being stiffly resisted behind the scenes by the banking lobby and the ECB. The result is a fiasco for Irish families, as the great game of “extend and pretend” continues. The urgent introduction of a standardized insolvency process matched to the scale of bad debts must also be supported by the European Stability Mechanism if fresh capital buffers are required.

Irish labor costs—especially in the public sector—are still too high. Since 1987, the Irish Parliament has callowly transferred wage-setting power to labor unions via the “social partnership” process. But a 2010 deal with public-sector unions, signed amid a brutal period of layoffs and pay cuts in the private sector, goes farther still by fixing pay and pensions for government workers at extraordinarily high levels through 2014. The agreement was named after Ireland’s largest secular temple: Croke Park, headquarters of the Gaelic Athletic Association, where the deal was struck.

Its effect, hardly sporting, is to privatize job losses from the recession and crowd out essential public services. In Greece, Portugal, Spain and Ireland, government employees already enjoy among the EU’s highest pay premia over workers in the private economy. But pay within the Irish public sector is also well above EU levels.

Pay for hospital consultants, teachers and nurses is singled out as especially high by the IMF. Local Irish county managers are paid more than most European prime ministers. Brendan Howlin, the minister in charge of reforming the public sector, is himself a former teacher and trade union activist. The inner cabinet of the Irish government—which comprises the prime minister, the deputy PM, the minister for finance and the minister for public reform—brings the intellectual firepower of three secondary-school teachers and a trade unionist to bear on Ireland’s crisis. All support the public-sector cartel.

The Irish government points to a reduction in public-sector numbers due to a recruitment freeze—as if those who take early retirement are abducted by aliens to a planet beyond the galaxy, and not into Ireland’s Ponzi pension scheme, which quadrupled its liabilities to €120 billion over the past decade while losing most of its assets to the bank bailout.


So while Time magazine and others eulogize the plucky leader of the Irish people, the truth is that Enda Kenny leads a Vichy government—captive externally to creditors that still insist on loading bank debt onto the sovereign, and internally to a tribe of insiders led by union godfathers in a deal that protects the government’s own excessive pay and pensions while bankers lean over its shoulders to rewrite insolvency laws.

This isn’t just crony capitalism. It’s crony democracy.

The funny thing is, in Ireland the Government and MSM have shut down any constructive debate on the economy. Certain economists and critics of the economic decisions of this and the previous government have almost been completely silenced.  As Eamon Gilmore says “put on the green jersey“, but isn’t the “patriotic card” always played when a Government is up to no good.

Source: Wall Street Journal

Irish Public Sector Outdoes Greek Public Sector

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In a view to cutting back on the €1.4 Billion the Irish Government spends on allowances to public sector employees, the minister for Public Sector Reform Brendan Howlin has achieved a total saving of €3.5 million. To put another way, of 1100 allowances, he has manged to get rid of 1. To put that in context, the minister from the Labour party is himself a former teacher (public sector worker) and the party of course benefits massively from public sector union donations and it’s not in their interest to touch the unions.

Hear are some of the better allowances

Chester Beatty Library Box making Allowance: The business case for retaining the allowance said it is necessary for the continuing “housing and conservation” of collections in the library in special boxes. Staff members receive up to €20 for each box.

National Museum of Ireland camera allowance: For the operation of all security equipment in the camera room on a 24 hour basis in the museum on Kildare Street. It was argued that the duties attached to this allowance do not form part of the core duties for science and arts attendants. No amount was given.

National Museum of Ireland lock up allowance: Staff members receive this allowance for the daily lock up of the Kildare Street site and security checks. It was argued that the duties do not form part of the core duties for the majority of science and arts attendants. No amount was given.

Inland fisheries eating on site allowance: This is described as compensation for lunch breaks taken away from the “designated base”. In return for this allowance, the Government receives the agreement of operatives to take their lunch break away from the base. The department is working on revising their rotas and are hoping to eliminate the payment. No amount was given.

Civil service footwear allowance: This agreement was made in 1990 when staff agreed to wear black or navy shoes along with their uniform. The cost of this allowance is €65. Only a relatively small number of staff qualify for it.

Bus allowance for CSO staff: Given to six full-time tourism enumerators at Dublin Airport with a daily rate calculated at €4.40. The Central Statistics Office said the case was “hard to justify” as it paid the Dublin Airport Authority for parking facilities at the airport. But ceasing the allowance “might cause some Labour Relations issues” and “affect the level of co-operation from enumerators.”

Delivery and footwear at chief state solictor’s office: A “special” allowance of €47.92 weekly is paid to service officers for the delivery of post before 9.15am, so that staff have received it before going to court. Four service officers also receive a €65 annual footwear allowances to attend the post office and assist in moving legal files in and at court.

Tourism Ireland directors travel allowance: The perk entitles the three staff who currently receive it to claim €4,952. As a result of the Financial Emergency legislation of January 2010 this was reduced to €4,556.

Tourism Ireland unsocial hours allowance: This is a form of overtime payment. It is most usually claimed by staff for weekend work at events.

Civil Service forklift allowance: An allowance for driving a forklift. “This duty is necessary. Very few officers across the civil service are in receipt of this,” the argument for its retention states. No amount is given.

Civil Service paperkeeper allowance: When the Paperkeeper grade was abolished, staff who worked alongside the former Paperkeeper “were unhappy about not getting the increased pay”. The duties of the former Paperkeeper included “the control of supplies and stationery”. No amount was given.

Chief state solicitor’s allowances: €5,617.16 is paid annually to a member of the office. It was argued it represents good value for money as the Office provides a legal service to the AG and Government which requires contact with staff outside normal working hours.

Some of the other hilarious allowances are

Source: Irish Independent, Department Of Public Expenditure and Reform

ECB’s Threatening Letter to Ireland To Be Released

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The Irish Minster for Finance is talking of releasing the letter the ECB sent to Ireland which threatened to remove all ELA assistance unless Ireland agreed to a bailout. So much for euro nations being sovereign when an unelected official has that power. Its quite clear that the banks run the show.

Finance Minister Michael Noonan has said a secret “threatening” letter from the European Central Bank to his predecessor Brian Lenihan, which forced Ireland into the troika bailout in 2010, should now be released.

The letter has to date remained top secret and both the Department of Finance and the ECB have repeatedly refused to make it public.

Now Mr Noonan has said he favours it being made available, putting him on a potential collision course with the ECB, which is adamant that it remain “strictly confidential”.

The controversial letter from the then ECB president Jean Claude Trichet to Mr Lenihan dated November 19, 2010, is said to have threatened the withdrawal of emergency liquidity assistance (ELA) to Ireland if the then government refused to accept the bailout, that included a ban on burning bondholders.

In the past two weeks, there has been growing pressure from within the Government, the opposition and leading economists to have his department release the contents of the letter.

Ireland should have pulled an Iceland and told the banks to cover their own debts but the Irish Finance Minister of the time gave in to the threats. Instead, no bondholders were allowed to be burned and the Irish taxpayer forced to prop up the euro least foreign owned banks have to take a hit or collapse under their losses.

Speaking exclusively to the Sunday Independent yesterday, Mr Noonan said that he had seen the “very direct” letter which left Mr Lenihan with “little or no option” but to admit defeat and lead Ireland into the €85bn troika programme.

It is now beyond doubt that Mr Lenihan was threatened directly by Mr Trichet, and that Ireland was bounced into the troika programme by unelected officials at the ECB.

In another example of how politicians clearly run the country for vested interests, the letter which confirms what a lot of people suspected was covered up for nearly 4 years by politicians.

Mr Noonan said he had no authority to order the release of the letter, given the decision of the Freedom of Information unit in his department to withhold it.

“The FoI unit is totally separate from the political side of the department, and it was decided that this letter was not releasable.”

But Mr Noonan, who returns to his office on Monday from his holidays, has said that the letter should be made available to whatever banking inquiry is established by the Government in the coming months.


Source: Irish Independent


How Ireland Deals With New Taxes!

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Want to know what to do when your Government introduces new taxes to pay bankers for the debt they racked up?

The office responsible for collecting the Household Charge have gone up in flames.

Eyewitnesses said the entire building on Dublin’s Ormond Quay has been evacuated.

The fire began on the floor occupied by the section of the Local Government Management Agency responsible for collecting the Household Charge.

Several units of Dublin Fire Brigade are in attendance.

Flames have been seen coming from the office and firemen have broken several windows.


Source: The Sunday Business Post

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