talked for weeks about an impending German politicians Irish national bankruptcy. Ireland now has the European rescue fund to complete.
Lutz Getzschmann
Published in: Jungle World, 25 November 2010
http://jungle-world.com/artikel/2010/47/42155.htmlThe Irish government will have to take massive support in the claim to prevent the collapse of its public finances. On Sunday, finance ministers agreed the euro zone to a general commitment to taking the land under the "Euro-rescue." Ireland needs to estimates by experts 40-100 billion euros to get its banking crisis under control. The redevelopment plan obviously helps the Euro countries, the International Monetary Fund (IMF) and, from the EU budget, which will be supplemented by bilateral loans from the UK and Sweden. A week ago, the Irish government denied on financial aid from the European rescue fund need to be.
was compelled to take this step appeared to Ireland, not least by the German Federal Government. The fact that the rescue of the Irish banking system in danger of collapse, the government of Brian Cowen had brought in serious trouble, had long been known. The Irish government has taken over security for the ailing banking system of the country and therefore has a completely debt-ridden budget. Ireland is this year toward a budget deficit of 32 percent. The speculations of German politicians about a possible insolvency of Ireland appeared to put some momentum, which was finally no longer cope. Two weeks ago, had Irish Finance Minister Brian Lenihan also because the German government accused the sharp rise in risk premiums on Irish government bonds since the beginning of November was also due to statements of German politicians.
He referred to the vehement demands put forward by Chancellor Angela Merkel (CDU), in rescue operations for high-debt countries such as Ireland continue to use pull even bondholders. Merkel had taken hold in the EU summit in late October, a corresponding decision of principle. The German government has helped with keeping that interest rates for Irish and Portuguese government bonds had soared, said Greece Prime Minister Giorgos Papandreou on Monday in Paris. The German position on the question of who should be liable for the failure of a Euro-state, could drive a country into bankruptcy. The federal government insists that the end of the current "Euro-emergency parachute" in 2013, private investors are to be asked in a national bankruptcy to pay.
The prospect of defaulting States in the future hours of their debts or waived at all, have sometimes has led to a flight of Irish government bonds, which led to falling prices, driving yields higher. Since July, the interest rates on Irish government bonds with ten years Duration by about 1.8 percentage points higher, mid-November they were at nine per cent. Interest on the Portuguese government bonds rose during the same period from 6.1 to 7.0 percent. The returns are a measure of funding costs, that countries should expect the issuance of government bonds. did not record the debt of the Irish state is inevitable for the Irish Government to the "rescue" claim, but the speculation in Irish government bonds, which was triggered mainly by the federal government and at EU-level political support.
that the German government on its own its dominance within the EU plays out, pushes increasingly discontent. The German debt restructuring plans had made the bailout more likely from Ireland and Portugal, the Financial Times noted in the past week. When dealing with the German government heavily indebted EU countries it is also about the economic interests of major German banks. The FAZ reported that they hold over Irish borrowers around 138 billion dollars in claims.
But the demands of nationalizing Hypo Real Estate (HRE) from the Irish Central Government and local authorities would amount to 10.3 billion euros. In the first nine months of this year, the HRE further loss of 1.1 billion € has accumulated. Should now also in the event of bankruptcy, the Irish government debt is written off, this would be a disaster risk trophales testimony to the bailout policy of the CDU / FDP government. But many German banks are not yet available on the brink, hold large stocks of Irish government bonds.
likely also the federal government is also a strategic location for its handling of Ireland have financial crisis, as was observed already in the German attitude towards Greece. Federal Finance Minister Wolfgang Schäuble (CDU) had already before the EU Ministerial conference spoke of harsh conditions, be the subject of the restoration plan for Ireland am. European leaders had proposed an increase in corporate tax, which is 12.5 percent in Ireland so low that it has attracted in recent decades, many foreign companies, to the annoyance of other EU governments. This step has so far rejected by the Irish government, which fears for its appeal to foreign companies. Whether the government Cowen still in the position to be able to resist demands from their lenders, however, can be doubted. Realistic is probably also that there will be privatization of state enterprises and drastic cuts in the social system. Irish media reported that on Sunday adopted austerity program of the government include, among other things, cuts in child support, the minimum wages and unemployment benefits. By 2014 15 billion euros will be saved.
move fiscal policy in the euro countries on a narrow ridge The public debt increased in 2009 due to the various stimulus and bank restructuring in total to 79.2 percent of gross domestic product. In 2008 it stood at 69.8 percent. The federal government aims to trouble spots in Europe to get a grip and bring about the same time a dynamic neoliberal restructuring, which leads to a shift in political power relationships. The outright disenfranchisement economically troubled EU countries that will become economic protectorate of the EU and its main political and economic centers, France and Germany, is not only the fear of their own financial collapse due. This disenfranchisement is also part of a shock strategy, the highly indebted countries more than before dresseth to the needs of the economic center. In Ireland itself the humiliation that the participation of the "emergency parachute means" has led to a government crisis. For the population had this step as a shock, there was the first spontaneous demonstrations before the Irish Parliament. Several "analysts" look ahead, however, forward to the next potential crisis situations that have to reckon with in a similar manner urged by the German government and the EU under the "rescue" to be: Spain and Portugal.
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