Apparently, former Taoiseach Brian Cowen was none too happy with the two nude paintings of his corpulent frame hung by a “guerilla artist” in the National Gallery in 2009. Our nakedness can be a great leveler, and how quickly the veneer of unchallengeable respectability fades away when an image is planted of you naked sitting on a toilet gripping loo-roll.
We are presently seeing a slow striptease by Minister for Finance Michael Noonan of the impenetrable and seemingly interminable promissory note negotiations. We still don’t know who is negotiating on behalf of Ireland, though apparently it’s employees of the Department of Finance, the Central Bank and the NTMA.
But the shield of “technical and complicated reengineering” of the debts shouldered by us all in respect of the promissory notes given to three institutions, including Anglo, is slowly being lowered as we get a sinking feeling that negotiations, that have been ongoing since September 2011 at least, are going no-where.
The view on here towards the negotiations has always been skeptical because it was never established who would be the counterparty to whatever benefit was coming our way. Nobody has told the Germans or the Finns that they might be expected to part with money to dig us out of a hole. And should the ECB ease the terms of the promissory notes in any meaningful way, then Spain, Portugal, Italy, France, Slovenia, Cyprus and others will be pointing to An Taoiseach’s game-changer last June when the EU summit communiqué said “similar cases will be treated equally”.
So what are we negotiating with? Two years ago, our hard negotiating chips were unilaterally reneging on the terms of the promissory notes or stopping the payments to bondholders in our bust banks. Since then, we have paid billions to the bondholders and there is presently very little left to be paid at what were Anglo and INBS. There are still billions due at the other banks, PTSB, AIB and Bank of Ireland, but these banks have been embraced as “pillar” banks and any default would have more serious consequences. We don’t want to deploy the hard negotiating chip of threatening to renege on the promissory notes because we fear the ECB might withdraw €70bn of funding to Ireland banks, and thereby collapse the economy.
So, all we have are the soft negotiation chips and they are as follows:
Europe needs a success story. Or what? And when? Europe, or rather the PIIGS periphery will definitely produce a success story. In time. Even Greece will work its way through its problems, its debt and deficit. It may default (again), have a civil war (again) but in the long run, it will reach some sort of sustainable economic equilibrium, even if it means the immiseration of its people. Italy is arguably a success story already because the price demanded by borrowers for its bonds is now around 4% long term, partly as a result of the ECB promising to “do whatever it takes” to support the euro. So, little old Ireland, with 2% of the EuroZone’s population and total economy, looks a little tragic on the periphery claiming Europe needs us to be successful.
We saved Europe, so where is the quid pro quo. Did we really save the EuroZone, because we didn’t allow any of our banks go bust which might have had a negative contagion effect throughout Europe? Or did we, contrary to the wishes of most of our partners in Europe, provide a comprehensive guarantee to our banks, and did some of us not even crow about the guarantee, trying to tempt depositors in other partner states to transfer their cash to us? And even if we did save Europe, what class of eejits were we not to get commitments up front? And having repaid most of the bondholders in banks, even unsecured ones in the zombiest of banks, now, NOW we want our reward. This scale of naivete is breath-taking.
The Coalition will collapse if we don’t get a deal. And the implication is that the subsequent political turmoil will jettison us back to massive deficits, will lead to a breach of the bailout terms and may even lead to a messy default. Think about that for a moment. In fact here’s some photographic diversion to help you.
If Europe couldn’t give a rat’s ass about the political turmoil in Greece, the riots, the knife-edge votes in parliament, the austerity, the suicide in front of the parliament building, murdered policemen, strikes and four prime ministers in as many years, then on what planet does this Government think our partners will be concerned about transition from one centrist government to another. In any event, despite the broken election promises and the savage budgets, Fine Gael is still tops in the polls with 26-28%. FG. FF and Labour command over 60% in the opinion polls and even if Sinn Fein or the non-so-united Left or Independents came into power, would our partners be all that concerned? After all, they stood by as a rabidly neo-Nazi party took a grip on Greek politics.