Geithner Blocked IMF Deal to Haircut Irish Debt

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Was the US Treasury Secretary’s deep sixing of a plan by the seldom-charitable IMF to give the Irish some debt relief Versailles redux? By that I mean the Treaty of Versailles, the agreement at the end of World War I devised by the victors to dismember the German economy. Bear with me as I tease out this conceit.

When most people think of the punitive deal, which most see as the cause of economic and social dislocation in Germany that fueled the rise of the Nazis, they focus on the unrealistic reparation payments without looking at the specific provisions intended to strip Germany of assets and productive capacity. As John Maynard Kenyes, a member of the British Treasury department who quit the negotiations in disgust to write The Economic Consequences of the Peace, the treaty seized, along with coal-rich Alsace Lorriane, but any assets held by German nationals in these territories were expropriated. In addition:

The Allies ‘reserve the right to retain and liquidate all property, rights and interests belonging at the date of the coming into force of the present treaty to German nationals, or companies controlled by them, within their territories, colonies,possessions and protectorates, including territories ceded to them by the present treaty.

The provisions regarding German coal production were even more destructive. Keynes noted:

The provisions relating to coal and iron are more important in respect of their ultimate consequences on Germany’s internal industrial economy than for the money value immediately involved.

The German empire has been built more truly on coal and iron than on blood and iron. The skilled exploitation of the great coalfields of the Ruhr, Upper Silesia, and the Saar, alone made possible the development of the steel, chemical, and electrical industries which established her as the first industrial nation of continental Europe. One-third of Germany’s population lives in towns of more than 20,000 inhabitants, an industrial concentration which is only possible on a foundation of coal and iron. …It is only the extreme immoderation, and indeed technical impossibility, of the treaty’s demands which may save the situation in the long run….

Our hypothetical calculations… leave us with post-war German domestic requirements, on the basis of a prewar efficiency of railways and industry, of 110 million tons against an output not exceeding 100 million tons, of which 40 million tons are mortgaged to the Allies….Every million tons she is forced to export must be at the expense of closing down an industry….the surrender of the coal will destroy German industry.

Now what, pray tell, does this have to do with Ireland, and Geithner? Geithner is as doctrinaire and short-sighted a defender of bankers’ privileges as the Allied Powers were of their rights to make Germany pay for the costly and bloody Great War.

We had noted that the Irish could have stared down the EU and held out for a bailout of its banks only, and were mystified at the quick capitulation. Consider this section of a very instructive op-ed by Ireland’s highly respected economist Morgan Kelly in the Irish Times (hat tip reader disgruntled observer):

On November 16th, European finance ministers urged [finance minister Brian] Lenihan to accept a bailout to stop the panic spreading to Spain and Portugal, but he refused, arguing that the Irish government was funded until the following summer. Although attacked by the Irish media for this seemingly delusional behaviour, Lenihan, for once, was doing precisely the right thing. Behind Lenihan’s refusal lay the thinly veiled threat that, unless given suitably generous terms, Ireland could hold happily its breath for long enough that Spain and Portugal, who needed to borrow every month, would drown….

Ireland’s Last Stand began less shambolically than you might expect. The IMF, which believes that lenders should pay for their stupidity before it has to reach into its pocket, presented the Irish with a plan to haircut €30 billion of unguaranteed bonds by two-thirds on average. Lenihan was overjoyed, according to a source who was there, telling the IMF team: “You are Ireland’s salvation.”

The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US treasury secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are.

The negotiations went downhill from there. On one side was the European Central Bank, unabashedly representing Ireland’s creditors and insisting on full repayment of bank bonds. On the other was the IMF, arguing that Irish taxpayers would be doing well to balance their government’s books, let alone repay the losses of private banks. And the Irish? On the side of the ECB, naturally.

In the circumstances, the ECB walked away with everything it wanted. The IMF were scathing of the Irish performance, with one staffer describing the eagerness of some Irish negotiators to side with the ECB as displaying strong elements of Stockholm Syndrome.

The Stockholm Syndrome point is important. Banks who have engaged in widespread looting and reckless behavior have nevertheless managed to persuade the public that acceding to their demands is virtuous. In a narrow sense, that isn’t wrong, in that healthy communities depend on most people honoring their commitments . But how long will this widespread use of what amount to one sided agreements, where the financiers can break them with little in the way of consequences while ordinary citizens required to adhere to them, continue before the collateral damage engulfs the bankers? This repudiation of basic notions of equity will prove to be as corrosive to the foundations of our society as the German hyperinflation was, although it will take longer to play out. And the economic costs are increasingly evident (hat tip reader Philip Pilkington):

Update 3:15 AM: In an interesting bit of synchronicity, the New York Times has a front page story on Ireland’s economic woes.

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  1. ambrit

    Mz Smith;
    An interesting aspect of the present debacle is the near total silence regarding the social consequences attendant to the economic ‘dificulties.” (Where’s that dictionary when I need it?) The Versailles analogy is apt; Europe shooting itself in the foot again. But what about the Weimar experience, much less the Spartacist Regieme in Bavaria. The fighting there was carried out by WW1 vets who were sort of sorry to see it all end so soon. Now we have the returning Iraq and Afghan vets dumped into a contractionary ‘real’ economy. What’s a poor boy or girl to do? Lest you think me a bit too alarmist, next time you talk to anyone you know in the ATF or FBI, just ask them how many Branch Davidian style groups they are aware of, much less tracking right now. Toodles.

  2. RebelEconomist

    Amid the various stories about who blocked haircutting – Germany, ECB, now Geithner, it should not be forgotten that Ireland was the first country to give a blanket guarantee for all their banks’ liabilities. Setting that awkward precedent lost the Irish much sympathy in Europe.

    I dare say that a problem with haircutting the senior bondholders is that they rank pari passu with the depositors in the creditor hierarchy. More than three years after this problem surfaced with the run on Northern Rock, as far as I know, it has still not been resolved.

    1. Richard Smith

      “Financial crises may not be the best time to make friends and influence people, but the Irish guarantee is the most ‘in-your-face’ beggar-thy-neighbour provocation since medieval armies catapulted bubonic-plague-ridden corpses into the cities they were besieging.”

      From Buiter

      I presume the Irish inherited the pari passu ranking of depositors and bondholders from the UK. As far as I can see the ICB report has nothing to say about this either. A giant omission.

      1. RebelEconomist

        I believe that the pari passu treatment of bondholders and depositors is the case in the US and many other countries, Richard. This could be a landmine for Iceland, because they changed their law to give depositors priority only on the eve of the failure of Landsbanki. If the bondholders successfully challenge that change in Icelandic law on the grounds that it was ex post facto, it would increase the potential cost to Iceland of Icesave deposit protection payments.

        1. Lyle

          Actually if you look at the WAMU case the FDIC had priority over bondholders and the like. So effectivly up to the 250k (today 100k then) limit the depositors come first. Recall that it was the Bank inside WAMU that JPMorgan bought. The Holding company was left alone, and proceeded into bankruptcy. (In this case the way the deal was done all depositors were protected…) Recall that because the bank sub units are regulated more strictly than the holding company (OCC, State or OTS versus the Fed) a number of activities need to be conducted at the holding company level.
          To give an example of an operating bank. Most Wells Fargo branches are Wells Fargo Bank NA which is actually headquartered (legally) in Souix Falls SD. For JP Morgan Chase its JP Morgan Chase Bank NA of Columbus OH. You can go to the FDIC web site and find the names of the actual bank units.

        2. Paul Tioxon

          I can’t help but notice that GM bond holders and creditors did not make out as well as the UAW Pension and Health Care Fund, which were bankruptcy remote and beyond the reach of creditors. This speaks to the political clout of the formal organization of millions of union members, as opposed to bond holders who relied on the market mechanism. Our social order, to re-emphasize, is not a simple mechanism, floating in a sea of fecal corruption. Unions are not simple dues collecting societies, but formal organizations to acquire, consolidate and organize a growing network of affiliates in other industries, sectors, and geographic areas in the pursuit of political power. Ireland population on the other hand is less than 1/4 of American Union membership. Is a threat to no one geopolitically or economically.

          As far as the Versailles Treaty analogy. Unless Tim Geithner is trying harm the Irish, as Great Britain tried to break the German people as an industrialized nation state, and reduce them to agrarian economic irrelevancy, who would no longer challenge the other great powers of Europe, it is worse than a conceit. They were stripped of coal to strip them of their industrial capacity altogether, not just to rob them in an economic sense. And as Franz Neumann points out in his book on the Nazi Economy, “Behemoth”: p.14
          ” What if Versailles and Moscow had been the two major factors in the making of National Socialism? Would it not have been the task of a great democratic leadership to make the democracy work in spite of and against Moscow and Versailles. That the Social Democratic party failed remains the crucial fact, regardless of any official explanation. It failed because it did not see that the central problem was the imperialism of German capital, becoming ever more urgent with the continued growth of the process of monopolization. THE MORE MONOPOLY GREW, THE MORE IT BECAME INCOMPATIBLE WITH POLITICAL DEMOCRACY.”

          When I see business minded economists, including you Yves, failing to see the simple politics, because you are all too busy counting just how much money is being stolen, I can see clearly that our politicians are better economics than any of you seem to be at politics. You really do know the price of everything and the value of nothing. Pick a side.

          1. attempter

            This speaks to the political clout of the formal organization of millions of union members, as opposed to bond holders who relied on the market mechanism.

            So you’re comparing those who actually work to parasites who do nothing but leech. I don’t see where there’s even a conceptual basis to begin a comparison.

            Talk about knowing the price of everything and the value of nothing.

            But the part about the parasitic creditors relying on “the market mechanism” is just adorable. (Not to mention the political clout of business unions.)

  3. Dirk77

    One difference was that the threat of physical force was explicit behind the Treaty of Versailles. With the Irish it’s just coercion on top of a thick layer of foolishness (coming back to the post on libertarians and coercion earlier this week).

    Interesting that, as Kelly argues, that straight defaulting won’t help given the decisions of Lenihan then Honohan. Economics: a little learning is indeed a bad thing. Everyone has this envy of theory in physics. They sadly don’t seem to also know that apart from rare cases, theorists in physics usually don’t get very far without experimentalists.

  4. Ransome

    You didn’t finish the metaphor. How did Germany pull out of the crushing debt? They defaulted and printed new money. It was very successful and after the war, they did exactly the same thing again.

    There something inherently toxic about economic contraction and money based on debt. Credit excess becomes an insurmountable debt hangover. This is worldwide problem as banks are now aggressive profit centers. They market credit on commission and at terms that are almost fraudulent. It is a new form of overprinting money backed by gold and has a worse outcome because bad money is simply money lost. Debt never goes away and continues to compound.

    There was a process call manumission where slaves worked at outside jobs or sold food to buy their freedom. Over time an amount was accrued, just as old age was setting in. The slave was freed and the master now had enough money to buy a young slave and start the process over again. Perhaps Geithner was a master in a former life.

    Ireland can become debt-slaves to the banks for eternity or leave the Euro behind and print their own currency and issue it prudently from a non-profit State bank (Ellen Brown-style). I think the German money was interest free (debt free). It worked for Germany, twice, resulting full employment. To get the money into the economy you start public works programs that can be sustainably privatized. People need to save and maintain a budget rather than live beyond their means.

    1. Three Wickets

      Not sure the Weimer Republic printing money was a “successful” experience. The resulting hyperinflation had people pushing around cash in wheelbarrows. Then they went to the other extreme, got super strict about price controls and external trade, began the national socialist movement, built a huge army, and began invading other countries for their human and natural resources. Oh and they began scapegoating Jews in a big way. Can’t forget that. Some similar dynamics in North Korea today. Voluntarily cut off from the rest of the world, prints money at will, has built the fourth largest standing army in the world, executes shopkeepers for ignoring price controls. Not exactly a solution.

      1. Yves Smith Post author

        We’ve written about this before. It takes particular conditions to produce hyperinflation, not just money printing but also destruction of a lot of productive capacity. That’s what grabbing a lot of Germany’s coal output did, it killed the industries that depended on it.

      2. F. Beard

        Voluntarily cut off from the rest of the world, prints money at will, … Three Wickets

        Please inform us who should print a government’s money but that government?

        Or should governments be compelled to rent their money supplies from private interests?

        Jesus, a Jew, gave us the solution to the money problem nearly 2000 years ago – separate government and private money supplies in Matthew 22:16-22.

        Our monetary problems stem from ignoring that command and insisting on a combined government/private sector money supply.

    2. F. Beard

      Ireland can become debt-slaves to the banks for eternity or leave the Euro behind and print their own currency and issue it prudently from a non-profit State bank (Ellen Brown-style). I think the German money was interest free (debt free). Ransome

      What is “prudently”? Yes, Ireland should issue its own debt free currency but that currency should only be legal tender for government debts, not private ones. That way, if the Irish government over-issued then it would only hurt itself, not its private sector.

  5. Three Wickets

    So who are these foreign bondholders of Irish debt. Probably banks and investment firms mainly in Germany, Britain, and the US who are managing assets of high net worth individuals. It’s not like our pension or endowment funds would be investing overseas, at least hope not. Maybe some insurance companies. So Geithner is standing up for rich Americans, at the expense of Irish workers. Quelle surprise.

    1. RebelEconomist

      One of the largest holders of Irish debt now is reportedly the ECB, and by implication, the taxpayers of the eurozone, thanks to the ECB’s disingenously presented “Securities Markets Programme” (ie that is even without counting their potential exposure via repo collateral). In my opinion, it was always a mistake for the EU or eurozone to lend to troubled countries and thereby put relatively healthy countries increasingly at risk. It would be better to just subsidise their interest payments until they either get out of difficulty or give up the fight, as I explain in more detail here:

  6. attempter

    You know it’s bad when the IMF is saying “Enough already.”

    (Once again we see what side Obama’s on, by full premeditated intent. Any cultists want to dispute that? Want to explain why he allowed Geithner to do something so gratuitous and egregious?)

    In a narrow sense, that isn’t wrong, in that healthy communities depend on most people honoring their commitments.

    It would be an extremely narrow sense if it wants to unilaterally honor commitments to those who have completely broken theirs.

    By now the fact is that not only do we have no obligation to honor commitments to the banks, corporations, or governments, but on the contrary a citizen has an obligation to his fellow citizens to repudiate all such “commitments”, since those were all unilaterally abrogated by the criminal elites themselves.

  7. Sufferin' Succotash

    Just a note about Keynes. He dashed off his brilliantly angry essay before the Allied Reparations Commission actually wrote the fine print of the reparations settlement. What Keynes described as technically impossible–payment in coal–was not part of the deal. Not for the right reasons, though; France’s coal industry was very unhappy with the prospect of all that German coal flooding the French market and effectively vetoed the idea.

  8. jenahill

    After reading only a few sentences of this post I started getting queasy. There is some kind of personal problem, that I’m addicted to reading about the U.S. actions here and abroad to help the most destructive organized crime wave in our history. You are too kind Yves, yes the banks do make agreements that are clearly in their favor and break those agreements when circumstances change. But more disturbing is how they have purchased legal and regulatory authority to create laws, regulations and policy in their favor, that legitimize their actions. So even when individual agreements are incorrect, faulty or fraudulent, the courts and other legal authorities have little or no means to protect the citizen. For example, there is only three days to cancel a mortgage. That is not enough time for citizens who have been in many cases denied the facts about the true value of the properties they have purchased, and the legitimacy of the contract they are signing. Banks claim these mortgages should be iron clad, and to obtain any relief for these crappiest of deals the standards seem high,once well settled issues such as chain of title are now rewritten by banks, and citizens have few, weak options for relief. These are just a few example of how the system increasingly favors the banks, creditors and how the citizen must be prepared to fight these infinitely well funded entities with our measly incomes and representation to obtain any economic justice. When we are fighting our own leaders for equity its a problem (women and minorities are experienced in this area). When all the rules are in the banks favor its a problem. We are the next Russia.

    1. Smirnovka

      “We are the next Russia.”

      In soviet Russia, people had dascha, people owned apartment.
      In modern America, after collapse, people won’t eat, people won’t have place to live.

      1. Comrade Ripped

        This is accurate – a comparison during the time of ‘Gorbey’ was that everyone in Russia basically was housed, a state priority. Not shit housing either, but a home everyone actually owned.
        In the US, we had examples of independant nation states in notorious Cabrini Green or Robert Taylor complexes, whole groups of people essentially isolated in access compared from the rest of society.

      2. peejoBOODLY


        Soviet Russia also had a lot more inventory stockpiled than America. Given the lack of consumer culture and goods I imagine Soviets were also more resourceful as individuals, specifically in producing necessities out of scarce resources. Most people in America don’t know how to make what they need with their own hands and there really isn’t much on the shelves once the supply line stops.

        Oh, and Soviets had vodka. That always helps in a situation like this.

  9. Schofield

    Clearly the lesson for human societies is that when you foolishly adopt Neo-Liberal ideology (that markets substitute for democracy) and allow your non-government sector’s credit (money) creation process to be placed in the hands of individuals only concerned with their own benefit (profit) you will subvert true democracy (the formation of the common good).

  10. Philip Pilkington

    The fact that the stockholders sided with the Euroboys is less surprising than you might think. It’s a class thing.

    You see, there’s a certain class of people in Irish society who worship power. They consider themselves above and beyond the great unwashed that make up the rest of the population. They often identify with whoever they see as an outside power. Crude as it might be, these people used to be referred to as ‘West-Brits’ or ‘Castle Catholics’.

    That’s where I think the mentality comes from: the colonial experience. But it runs deep (trust me, I’m related to some of these people…).

    It is — and has always been — a very self-destructive class dynamic. And it continues to be through to this day. The psychologists used to call it ‘identification with the aggressor’ and I think that sums it up nicely.

    A few years ago eXiledonline ran a very funny satirical piece that, among other things, dealt with this cultural phenomenon. Here it is:

    Incidentally — and just for some shameless self-promotion — the Versailles meme has been bumping around Ireland for a few months now. I think I might have started it off with a polemical piece I wrote to get the lefties in Ireland stirred up:

    1. kievite

      You see, there’s a certain class of people in Irish society who worship power. They consider themselves above and beyond the great unwashed that make up the rest of the population. They often identify with whoever they see as an outside power. Crude as it might be, these people used to be referred to as ‘West-Brits’ or ‘Castle Catholics’.

      There are two additional terms that might also be useful:

      “Comprador bourgeoisie” is long known phenomenon and is usually defined as a section of an local middle class allied with foreign investors, multi-national corporations and bankers. Allied with Western masters against their own population if you wish.

      Lumpenbourgeoisie is a similar term attributed to Andre Gunder Frank who in 1972 described a type of a middle class and upper class (merchants, lawyers, co-owners and part of staff of joint companies etc.) which that has little “national” self-awareness or “native” economic base.

      The term is most often used in the context of Latin America but is applicable to Russia and all post-Soviet countries. In Russia such people are often called “liberasts”.

  11. rps

    The War Guilt Clause of the Versailles Treaty was Europe’s punitive Ad victorem spoilas. The lesson past generation learned was Not to strip a nation/citizens of their country’s assets and beggar them. Thus the emergence of a vengeful charismatic leader shepherding a nation into world war chaos.

    The bankers manifesto of “pass the gravy boat” and Geithner’s dripping allegiance will again parent world consequences. The looting of the world’s labor and asset-stripping via a rigged-game of win-win banker outcomes will climax. Thus triggering the deconstruction of societal Collective Social-Safety Systems domino style. As the financial destitution of world populations rises it will coalesce a hungry populace in search of and emergence of many apocryphal messiahs.

    1. Smirnovka

      U.S. military is too strong. In future, only richest oligarch and 4th world slave to richest oligarch.

  12. LillithMc

    Giving bond-holders a 30% haircut is very tempting for some states and some families who see their quality of life dropping dangerously. Geithner’s job has always been to keep the wealthy whole. The people being destroyed were never in the casino, but might be happy to see the casino shut down.

  13. Jim

    >Geithner is as doctrinaire and short-sighted a defender of bankers’ privileges.

    And more: the bankers Mole in Treasury. And as a mole, capable of enormous destruction. The real question: Is Obama stupid or is he wholeheartedly, eyes- open, encouraging this fundamental evil?
    Lenin had 3 Rules for regime change. 1. destroy the middle class, impoverish them and make them dependent, 2. coddle the very wealthiest and hold them close and feeling grateful, 3. destroy the currency and thus the economy.
    Anyone seen anything like this lately?

  14. Thomas Barton, JD

    The Irish situation may well be catalyzed by the LibDems absolute defeat in the polls. Clegg will be seen by up and comers in his party as weakened and vulnerable to open mutiny. If these elements act in concert and with venom then the gloating Cameron will have won the battle and lost the war. The LibDems need to embrace their voters anger and if they do so then the Daily Telegraph monograph on Sir Fred’s disastrous rise to power will be replaced with a proper accounting and this will enhance the Greeks and Irish to throw off these surly bonds of Junkerian fantasy. I read a VoxEU report by none other than its president and founder… he wrote on may 1 (i believe) that the Irish may merely be waiting for the Greek Cauldron to boil over and then they can default, sorry Restructure , and look sober and sound in the bargain.

  15. Dark Markets

    THANK YOU, NakedCapitalism, for QUOTING Keynes CORRECTLY, and IN CONTEXT.
    The thieving GS/JPM/Fed banksters who are Timmy Geithner’s puppet-masters (Bob Rubin, Larry Summers, & the other Rubinites) have disgracefully CONFLATED “GIVING ‘bailouts’ MONEY TO BANKSTERS” with “KEYNSIAN STIMULUS.”
    As you point out, Keynes QUIT his Job as a Senior official in the British Financial Ministery, to PROTEST the DRACONIAN terms of the Versaille treaty which you highlight here – he was a LIBERAL, with COMPASSION, the “Of, By, & For Golddamn-Sachs Rubinites” are wages-crushing, jobs outsourcing, enviro polluting, pensions raiding, subprime-mortgage enticing, social safety net slashing, Treasury Looting radical right-wing Neo-Cons – the DIAMETRIC OPPOSITE of “Keynsian liberalism.”
    (The Neo-Conservatives have CONFUSED this designation as well, “Neo-Conservative” and “Neo-Liberal” both mean the same thing.)
    However, the Financial Class REPEATEDLY INTERJECTS THEMSELVES BETWEEN govt DEFICIT SPENDING, and MAXIMIZING the bang-for-buck of those government contract dollars, by hijacking AS MUCH MONEY for FINANCE as possible.
    (Here’s a clue: President Roosevelt’s top economic advisor was NY/Wall St. billionaire “investor” BERNARD BARUCH, and his GOLD CONFISCATING Treasury Secretary was HENRY MORGANTHAU.) It was NOT the NEW DEAL with ultimately prove Keynsian “DEFICIT SPENDING CAN STIMULATE THE ECONOMY” correct – it was __WWII__ production, the vast “arsenal of democracy” that created, literally, fleets worth of ships, trucks, tanks, airplanes, guns, and the supplies and equipment to move & maintain above – funded NOT with some magic pile of gold discovered after Dec. 7, 1941 (the Japanese attack on Pearl Harbor, and thus start of US participation in war), no, the Government SOLD BONDS (DEBT!) and used DEFICIT SPENDING… but the key here, is with STRICT LIMITS on Financial “profits” and a top tax rate in wartime near 90% !!

  16. Mike M

    Rarely do I hear mentioned that Ireland is also the most Catholic of European countries, maybe the world. As a failed Irish catholic myself, I can understand how they have let their deep seated guilt take hold of them and submit to the “Stockholm Syndrome”. It’s almost as though the whole country has run to the confessional and now been told to do ten to twenty years of contrition for their sins, whatever they were, and they are accepting it with the same resignation they would a slap and ear pull from their nun in middle school.
    Let’s not even go near the fact all of this is happening at the same time in history that their church is being rocked with allegations of great great sins by their priests and teachers. Very tragic.

    1. shtove

      Ireland hasn’t been catholic for a considerable period.

      The people still show plenty of devotion, but the state has been pretty much a standard socialist organisation since the early ’70s. Now it has a massive public sector stuffed with people who graduated with sociology degrees. No need for a “national” church when the state looks after everything.

      1. alex

        “Ireland hasn’t been catholic for a considerable period. The people still show plenty of devotion …”

        If the people aren’t the country, then what is? If tomorrow there was a revolution and a entirely new form of government was installed, the people and the land would still be there, so it would still be Ireland. Governments are an accessory, or perhaps more accurately a necessary evil, for a country, but they are not to be confused with the country itself.

        P.S. Not that I necessarily agree with Mike M. This seems more like the medieval practice of self-flagellation than the ordinary penance one may be told to pay after confession.

  17. FatCat

    FatCat! speaking, so all drunken lazy Irish had better listen up or else.

    Let me make one thing clear: you are going to pay ME with interest the last eurocent you owe ME. If you won’t, not only will I crush your drunken country back to the Third World where it was until 15 years ago, but I will make things so bad on your pathetic island, your potato famine will seem like a feats.

    Is that clear?!

    Oligarchic FatCat!

  18. Dark Markets

    @ Mike M:
    ” As a failed Irish catholic myself, I can understand how they have let their deep seated guilt take hold of them and submit to the “Stockholm Syndrome”. Let’s not even go near the fact all of this is happening at the same time in history that their church is being rocked with allegations of great great sins by their priests and teachers. Very tragic.”
    yes, thanks for that. Someone commented elsewhere that the Irish are, and have been for centuries, caught between a rock & a hard place: their ruthless, brutal WASP English overlord neighbors & conquerors (and, today, City of London loan-shark debt lords), and that “great hairy spider” of the church, and all its (legions) of powerful, abusive officials.

    1. FatCat

      You forgot to mention ME. I am one of Ireland’s (and the whole world’s, for that matter) greatest oppressors.

      I am FatCat! Oligarchic Wall Street FatCat, to be more specific!


    2. alex

      “their ruthless, brutal WASP English overlord neighbors & conquerors (and, today, City of London loan-shark debt lords)”

      You’re forgetting the enemy within. Many of those brutal landlords were Irish to the core, and the banks are also genuinely Irish.

  19. Allen C

    The Versailles analogy came to my mind with the announcement of the bailout terms.

    The ultimate resolution path is to prosecute the bankers and their corrupted government officials. A country has a basis then to restructure these punitive bailout terms.

    The developed world lacks a critical mass to demand some basic law enforcement. Restoration of law and order is nowhere to be found amongst the emerging presidential platforms. Few seem to question why.

  20. Francois T

    If Time Geithner does not come down as the worst Sec of the Treasury in US history, I give up. The man is a constant menace to the real economy!

  21. Francois T

    If Tim Geithner does not come down as the worst Sec of the Treasury in US history, I give up. The man is a constant menace to the real economy!

  22. Jeff N

    Germany offered to pay huge interest rates to foreign banks (who were all too happy to collect this high interest not as easily obtainable elsewhere during the depression) to get financing, so then these foreign banks lobbied the Allied governments to go easy on Germany with the reparations so that the banks could get paid.

    Kid gloves for the banks as not to wreck the economy. Sound familiar?

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