Now that the referendum smoke has cleared, we are left with the ESM fog. The signals from Hiding behind a poster and one or two other posters, and echoed in some of our Sunday papers, show the outline of the Government plan. It looks to me to go like this:

Spain's banks are in danger of going down. They are TBTF. The ESM steps in. It lends cheap and long to Spanish banks. Ireland then puts its lámh suas. Ireland asks to be remembered for being good, for taking on bank losses with gusto. We did it for the euro. It's payback time. So please can the ESM take this burden from our back. Refinance the tens of billions of odious debt that is weighing us down.

If that is the Government plan, it faces some obstacles.

- The current ESM treaty says the ESM can only lend to countries, not banks. Treaty change would need German consent.

- The ESM has no money. It does not even have notepaper - the ESM does not exist. It is supposed to exist in four weeks. If and when it comes into existence it needs to move fast, going from Zero to €500 billion in warp speed. To assemble its fund, it needs to first get in money and irrevocable sovereign pledges from member countries totalling €700 billion. €83 billion of that is to come from Spain.

- Having gathered in the cash and pledges, it then has to persuade bodies to lend it six or seven times its cash pile. This is our old friend leveraged borrowing.

- If it pulls that off, it then gives the borrowed money to the bust banks, who promise to pay it back, with interest.

That does not look like a great plan but I am surely missing something. Does anyone think it will work for Ireland, and if so how?

/MOD/ Edit: Sync: Merged with this thread: Enda Kenny and his quest for political justice /MOD/


Edit, in view of merger, to add Enda Kenny's statement:

There is a strong case for political justice to be seen in respect of facilities being given to one country and another.

Originally Posted by He3

Now that the referendum smoke has cleared, we are left with the ESM fog. The signals from Hiding behind a poster and one or two other posters, and echoed in some of our Sunday papers, show the outline of the Government plan. It looks to me to go like this:

Spain's banks are in danger of going down. They are TBTF. The ESM steps in.

My opinion is that passing the Treaty buys us time - we are still in the Troika program but we have bought an insurance policy which I would still hope we won't need to use. We are out of the firing line, Spain and Greece will move to centre stage, France & Germany will do a deal on an investment program, sometimes being a small country has its advantages.

SF The ULA and their associated loon-bags are guilty of treason, nothing new there.

The above referenced gimps constantly attempted to undermine the State and the 'hands it holds' during the referendum.

The Spanish solution will enforce an Irish Gift, the No's would have wiped such an opportunity.

This government couldn't pull a decent pint of Guinness, never mind having any kind of plan.

Oh wait, I'm sorry, they do have a plan. It's called do sweet f*ck all and get out with the large pensions intact.

Originally Posted by Phil Maker

SF The ULA and their associated loon-bags are guilty of treason, nothing new there.

intgeresting that, which parties was it that voted to make bank debt sovereign debt ?

Originally Posted by artfoley56

intgeresting that, which parties was it that voted to make bank debt sovereign debt ?

This help??

Originally Posted by Phil Maker

SF The ULA and their associated loon-bags are guilty of treason, nothing new there.

The above referenced gimps constantly attempted to undermine the State and the 'hands it holds' during the referendum.

The Spanish solution will enforce an Irish Gift, the No's would have wiped such an opportunity.

You are joking i hope when you think that what happends in Spain will help us they wont get any deal, the euro is on its last legs we dont count .we paid off the bond holders that all the ecb cared about .

Originally Posted by Ulster-Lad

This help??

knew already UL was just trying to see how asking to use their democratic right to vote no, but loading bank debt onto sovereign debt isnt

- The current ESM treaty says the ESM can only lend to countries, not banks. Treaty change would need German consent.

The ESM specifically allows for loans to states to re-capitalise financial institutions:

ARTICLE 15
Financial assistance for the re-capitalisation of financial institutions of an ESM Member

1. The Board of Governors may decide to grant financial assistance through loans to an ESM Member for the specific purpose of re-capitalising the financial institutions of that ESM Member.

Originally Posted by artfoley56

knew already UL was just trying to see how asking to use their democratic right to vote no, but loading bank debt onto sovereign debt isnt

I am sure everyone here knew. I thought perhaps Kenny could use the poster in the background now?? We do have to mind our expenses now.