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Ireland crisis loan program choreography

Read more about: Economy, Europe     Print This Post

We’ll update this post as the day evolves, newer material first.

The IMF is lending under the Extended Fund Facility (EFF), and not the more common Standby Arrangement.  The EFF is meant for countries with serious medium-term balance of payments imbalances.  That’s the one thing that Ireland — courtesy of its strong export performance — doesn’t have.

Here’s our summary of the program: EU is telling us that you can have your banks or your public pensions, but not both.

RTE says the rate on a fully drawn facility would be 5.8 percent.

The EU finance ministers news conference should stream live here, Brian Cowen news conference streaming here.  Jean-Claude Juncker speaking now.  Statement is bland so far: staff-level agreement, 3 pillars — now the meat: immediate overhaul of banking, ambitious fiscal adjustment, 2015 for deficit target now?, growth enhancing reforms especially in labour market.  10 billion for recap, 25 billion for contingency, 50 billion fiscal.  NPRF and NTMA cash buffer is part of program.  UK, Denmark, Sweden will also lend.  IMF component is 22.5 billion.

[Older material below the fold]

Here’s the Irish government statement on the state of play prior to the European Union and Eurozone finance ministers meetings.  And here’s a statement from the European Council prior to those meetings –

In preparation of the meetings of Ministers of Finance this afternoon, telephone consultations have taken place between the President of the European Council Herman Van Rompuy, the President of the European Commission José Manuel Barroso, the President of the Eurogroup Jean-Claude Juncker, the President of the European Central Bank Jean-Claude Trichet, Angela Merkel, Chancellor of the German Republic and the Nicolas Sarkozy, President of the French Republic.

So the respective institution heads (although not the European Parliament) and just two heads of state in their own capacity, Angela and Nicolas.

Anyone doubt that Germany and France have shared the driving on this one from the start?

Highlight of statements from the arriving ministers: George Osborne saying that they have to “sort out Ireland”.

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7 Responses to “Ireland crisis loan program choreography”

  1. # Comment by Betty Nov 28th, 2010 21:11

    WE have turned everything off and tuned into Lyric–we are senior citizens that have both worked since we were 14 years and to think that a lifetimes work has been squandered in 8 years—we did not party in the celtic tiger, we did not buy a second home , we did not have bank shares and for the rest of our lives we will pay for the fraud ,corruption and lunacy of a few who are now going to retire on obscene pensions For a start all those who sat at the cabinet table since 1997 should be retired on the state pension, it won’t improve the situation but it would be a start on justice and that is important too.

  2. # Comment by Veronica Nov 28th, 2010 23:11


    Coincidence – I started working at 14 too. I lied about my age to get a part-time job in a local shop to save up to buy a coat that I’d spotted in a boutique. I worked all my school holidays that summer and through the Hallowe’en and Xmas breaks for 11s.6d for every twelve hours worked. But I got that coat!

    It’s hard to know what to make of this package until all the details are teased out. Of course the opposition have to rush to judgement since that’s what media pressures dictate. If they didn’t take up the airtime on offer, every nutjob in the country would swamp the airwaves with whatever take on it best suits whatever personal agenda they’re pursuing (some of them have been out and about and at it since early afternoon!), so escaping to Lyric FM may not be the worst idea in the world. The deal will be there tomorrow …and for the next four years.

    Will it work? For the eurozone, market reaction is the priority and tomorrow should tell a lot on that score. If the markets continue to pick off the eurozone, country by country – Portugal, Spain, Belgium in line – then the system will collapse anyway and Ireland might in this situation of Armageddon be better off than being next in the queue for a bailout.

    From Ireland’s perspective, it’s either this deal or no deal; in which case the country just goes bust. The four year plan, with a bit of tweaking here and there, is what any government here would have had to put forward anyway. At least there appear to be no extra demands from the IMF like closing hospitals or schools or firing half the country’s public servants. The rates at which finance for the continuing deficit will be available over the next three years will be cheaper than what’s available on the bondmarkets, so the opportunity for Ireland to work our way out of the problem is enhanced.

    The big issue seems to be around the NPRF and its use to recapitalise the banks (again). If it’s Hobson’s Choice,though, between overcapitalising the banks or frittering away the Pensions’ Reserve Fund on daft, so-called stimulus initiatives, then the banks may be a better bet.

    However, like you, Betty, I turned off the radio so we could have dinner in peace and enjoy our food and conversation. “What this country needs,” says the lifelong companion, “is a good idea. Something like a Nokia, like Finland came up with.”

    “Nah,” says the wise one, the clued in offspring who’s thinking about getting the hell out of this country because it offers nothing anymore to the young. “Irish people aren’t all that good at that technical stuff because this place is so small they can never see an application for it here. They have to go to America, like that Henry Ford. We’re good at the arts and literature, though. Maybe there’s something in that line we could develope?”

    Tomorrow might the day to really start working out what it is we’re good at. What it is we need to do in terms of the banks and our fiscal situation is laid out for us and beyond our control anyway. But how our political system needs to work for us as a people, and not just for those who crave power and pomp, remains very much in our own hands. How elites, from trade unions to fat cats in the professions, manipulate the system to their own personal benefit requires radical transformation. How social welfare leaves the most vulnerable at the end of every queue needs to be relentlessly opposed. Personally, I think there’s loads to be done over the next couple of years that will demand the best of us as citizens. But then I’m just a foolish old optimist.

  3. # Comment by Donal O'Brolchain Nov 29th, 2010 10:11

    I agree entirely with you that we have lots of work to do on the way in which our power is used politically. We need to design and implement checks and balances that limit the scope for excess by the powerful – elected and appointed, public and private – so that we can have government that is competent and moderate.

    Freedom of Information is one place to start

  4. # Comment by EddieL Nov 29th, 2010 13:11

    The big rip-off that IMF/EU have been preparing for the last ten years is now in place (as long as the war in Afghanistan). It started with the country being flooded with money (something the IMF/EU were completely unaware of as the money grew on trees). With the money we were encouraged to build all the essentials necessary for future prosperity like housing estates in the smallest villages to house non-existent people people with no jobs. The Government/EU/IMF were completely unaware that all this was happening. I gather that the Metro is still going ahead – an absolutely essential project to take all the emigrants to the airport.
    It appears that our government are doing a great job – They saved all the banks of Europe and Spain and Portugal will be saved from the penury we have signed up to, though how this is supposed to happen mystifies me and weren’t we supposed to be saved by Greece. Maybe Spain and Portugal will be saved by us giving every last cent we have to spare for generations to come including what little we have in the piggy-bank for the rainy day.
    But unfortunately of course the IMF will see to it that if it is necessary Spain and Portugal will have the same fate as us in order that the Euro does not have the cheek to challenge the dollar for primacy as a world currency.

  5. # Comment by EddieL Nov 29th, 2010 16:11

    By the way, on a personal note, my parents were among those who lost most of their savings in the Shanahan Stamp Auction – Paul Singer scam in tbe 1950′s. So I learned the hard way.

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