Bank Guarantee - Most Catastrophic Political Decision Taken in Post-War Europe.

[ang]

Brian Cowens decision to Guarantee our Banks in September 2008 is the most catastrophic political decision taken in post war Europe according to Wolfgang Münchau:-

The anniversary of the collapse of Lehman Brothers was without a doubt the single most symbolic moment of the financial crisis. But, at least for Europe, it was not the quintessential turning point. That came on Tuesday, 30 September 2008, when Brian Cowen, the Irish prime minister, gave a blanket guarantee for the entire banking sector. His decision bounded the other eurozone leaders into following suit. The rest is history.

I would go as far as to classify the decision as one of the most catastrophic political decision taken in post-war Europe. This not so much because of the decision itself – it was necessary to stop the rot at the time – but because of a lack of action to embed the decision into a strategy to solve the problems of the banking sector – lack of capitalisation, abundance of toxic assets, poor management, and of course, excessive size. The consequences of that strategy will only become apparent in the years to come.

http://www.eurointelligence.com/index.php?id=581&tx_ttnews[tt_news]=2915&tx_ttnews[backPid]=901&cHash=5fc6365df5

[C. Flower]

Brian Cowens decision to Guarantee our Banks in September 2008 is the most catastrophic political decision taken in post war Europe according to Wolfgang Münchau:-



http://www.eurointelligence.com/index.php?id=581&tx_ttnews[tt_news]=2915&tx_ttnews[backPid]=901&cHash=5fc6365df5

Essential reading

Why not just default? History has shown that countries recover from default relatively quickly. But in Europe, default is considered such a gigantic blemish, that Europeans go to extremes to avoid it. Latvia marched through one of the most brutal economic depressions in modern history. A currency devaluation would have eased the pain, but it went against official dogma. Ireland and Greece, too, preferred to cripple their economies for generations to come in order to avoid the political blemish of a default, or even an agreed rescheduling of the sovereign debt. Both countries are fundamentally insolvent – if you assume, as I do, that there will be zero growth for five, or even ten years, with further steep declines in asset prices.

[Rich]

Yeah good stuff. We (as in the country "we") are still being sold a load of rubbish. Are we really so childlike that we cannot be told the full truth by our leaders.

[Xray]

Who is he?

[C. Flower]

Who is he?

He's a German economist who works for the Financial Times.

Was accused here yesterday of being eurosceptic, but no evidence produced so I can't say.

[Apjp]

He's a German economist who works for the Financial Times.

Was accused here yesterday of being eurosceptic, but no evidence produced so I can't say.

Wolfgang munchau? good read that lad.

[wickedfairy]

soz, have posted it twice, wandering around the forum like a lost sheep. Karl Whelan's blog, lot of comments on Gormley's interview last night with Vinb on the "McWilliams Guarantee"

http://www.irisheconomy.ie/index.php...lliams-option/

[PaddyJoe]

soz, have posted it twice, wandering around the forum like a lost sheep. Karl Whelan's blog, lot of comments on Gormley's interview last night with Vinb on the "McWilliams Guarantee"

http://www.irisheconomy.ie/index.php...lliams-option/

I heard some of that Gormley interview and it sounded like one long piece of self justification from start to finish. He very cleverly distances himself as far as possible from the blanket guarantee.
Once again, I notice, he nails the FF spin that the guarantee was a decision taken in the space of a few hours on the night of the 29th. The options had been discussed for several days beforehand. He is already on record as saying that there was a Cabinet meeting called the day before(Sunday) where the guarantee decision was agreed.

[TotalMayhem]

It only shows how clueless they were as to what was going on. Cowen took the same approach as he did when he was Minister for Finance, i.e. do nothing (it's not my job to interfere) and it will go away. The others were quite happy to sleep through the night. Let's guarantee the lot, someone will pay for it (and it's not going to be us, dare you touching our pensions, Taoiseach). Hopeless...

[TotalMayhem]

via broadsheet.ie

[d.vader]

Paul Sweeney has a good article in today's IT ('Major Investment Plan Needed for Recovery') where he opines that 'the real opportunity for growth policies can only come from renegotiation of the bailout deal and of the impossible burden of bank debt'.
Strikes me also that our new 'government' is a black joke. It's as if by spending the last whatever number of years it was on the opposition benches they decided that their opportunity has finally come to punish muintir na h-eireann for rejecting them for so long by inflicting the worst possible set of econimic policies imaginable on us.
http://www.irishtimes.com/newspaper/...310143268.html

[jpc]

Privatise the gains.
Socialise the losses.
That isn't the way capitalism is meant to work according to the text books.

[Baron von Biffo]

Privatise the gains.
Socialise the losses.
That isn't the way capitalism is meant to work according to the text books.

Neither is putting a lying drunk in charge of a nation's finances. We do things differently here.

[Sidewinder]

Neither is putting a lying drunk in charge of a nation's finances. We do things differently here.

Out of curiosity, when was the last time Ireland had a Finance Minister who wasn't a lying drunk?

[Baron von Biffo]

Out of curiosity, when was the last time Ireland had a Finance Minister who wasn't a lying drunk?

Besides Lenihan there was one other notorious drunk in the Dept of finance but I don't fancy spending a few days on the quays so I wont name him.

The damage wrought by some of the rest of them was done while stone cold sober.