Wednesday, 27 July 2011

Viral or a very silly season?


Is it viral?
It seems that no sooner had the Junior Minister at Finance got the choices and facts facing Ireland about debt and the Euro completely wrong that his boss, Michael Noonan TD did the same thing, only worse, with even more bells and whistles.
Not content with the (by comparision) mild warnings of his Junior that we would have to "go back under Britain's skirts" if we did not pay every single cent owed  and that our debt would double INMMEDIATLY if we left the Holy Euro, Mr Noonan really gave us what-for. Russia! Russia! it will be Russia 98. We would rummage for food in the bins, old people would die by the hundreds and folk who had never contemplated knowing poverty would starve. Shades of Goody Proctor and an entire Hades, the over-kill in what is clearly concerted propaganda campaign has now become embarrassing.

It seems grossly unfair to be throwing a second brick-bat at FG in 24 hours ( first was on The Edmund Burke Institute website yesterday http://edmundburkeinstitute.ie/hayesreplyessay.php ) BUT they are the Government and this issue is to big to ignore. Also I have to confess a certain proprietorial interest in the matter: I don't remember a time when I was NOT an FG member and their particular wheel has a dent marked there by my shoulder so Lictores ire pacifice, hic loquitur de amore Romae.

That this is concerted propaganda is clear. As clear is that it is shockingly poor propaganda. What is not so clear is they are doing this.

Ireland is faced by a range, not so much off choices as forced marches. One scenario, listed among the BENIGN is that following a rolling default/restructure by Greece and a slightly sharper time-framed similar exercise by Portugal it would become politically impossible for any Irish (this Irish, we are talking moths here) to continue to pay all the debt, at least one third of which is quasi-sovereign Bank Black Hole.
Our bonds are junk & the markets are pricing default (reach for a word that is easier on your delicate palate if you are inclined) into our bonds because the believe that either we will not or cannot pay pack the debt burden. 
The truth is, however obvious, that nobody knows the future.
What we do know is that the debt crisis is far from over. on Thursday Italy had a 10 year bond sale (€2.7b) but yields points from 4.94% on June 28 to a whopping 5.77% and a few hours later Italian interest rates were at 5.81%.
We can speculate future scenarios but all of them must now take account that Greece is in the process of default. Yes it will be an organised vanilla flavoured one but the outcomes are the same: not all the money, not when it was agreed & next country up please. Portugal would seem to be that country, exactly WHEN the EU leaders will be meeting to agree a Portuguese "restructuring " is open to discussion but pre-Christmas looks like a safe bet.
If Portugal and Greece get write downs in Sovereign Debt why should Ireland continue to pay the all of the quasi-Sovereign Debt that is the Bank Black Hole ( or Lenehan's Poisonous Legacy)?
More to the point HOW can we?
Of course the order of the chaos could be quite different, there is lots of excrement to slap in to lots of air circulating devices but the end question for us is ALWAYS the same. How or why must we repay BBH/LPL?
The answer to that question will not be found in the crack-pot utterances of Mr Noonan and that is a very great pity. Concentrating on propagandising the domestic market is not a good role foe our finance Minister right now (and don't give job to Junior either) but the question must be WHY does he try?
Is it possible that Noonan himself can believe the utter rubbish he was spouting about the similarities between Ireland 2011 and Russia 1998. Noonan is a bright man with a record of believing extraordinary pieces of nonsense  but that is a stretch too far. FG have a religious belief in the sacramental nature of the European project and that certainly does not help but it still leaves me at a loss to know why, in the space of 48 hours, the FG people at finance should feel the need to propagandise so heavily for a position (NO DEFAULT! EVERY CENT! EVERY CENT) that is already lost. 
Is it the Holy Euro?  













Follow me on Twitter