# Referendum a golden opportunity for debt forgiveness



## Firefly (14 Dec 2011)

Was thinking about this last night on the way home. If we need to vote for a treaty change then would we be better off voting No in the first instance and insisting that 50% of our banking debt be written off (as per Greece) before we vote Yes? Voting No to Lisbon 1 the last time protected our Corporation Tax rate, so why not do the same regarding our banking debt? Is this a golden opportunity for us?


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## Mpsox (14 Dec 2011)

There's an opportunity here but there is also another possibility if we vote no, basically that the EU decides that we're out and doesn't give us the opportunity to vote again. Remember that because of Cameron,this is not an EU wide treaty that requires all countries to sign up.

having said that, it would be good to put manners on the latest little Frenchman with delusions of grandeur


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## Brendan Burgess (14 Dec 2011)

So we have run a huge budget deficit paying for a social welfare system, a health system, a level of public service and a general lifestyle which our low tax rates couldn't support. 

We gave a retrospective government guarantee to the depositors who put money into our risky banks. 

We act as a tax haven for multinationals. 

Our banks have been given huge amounts of money at 1% and the state, which has been frozen out of the international credit markets, has been given a €65 billion line of credit by the EU/ECB/IMF at around half the rates we could borrow on the international markets. 

But shure, let's come up with an oirish solution to this. Let's blackmail  these lads into writing off half our debts so that we can continue the party with no hangover.


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## 7seats (14 Dec 2011)

Yes, but in large part the state was given the money in order to pay back the European banks...hardly seems equitable that the Irish taxpayer shoulders that burden on behalf of Europe?

Its not an Oirish solution, its called playing the best hand you can with the cards you are dealt.


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## serotoninsid (14 Dec 2011)

7seats said:


> Yes, but in large part the state was given the money in order to pay back the European banks...hardly seems equitable that the Irish taxpayer shoulders that burden on behalf of Europe?


+1 .  Compounding the problem, have the europeans not exerted pressure on us NOT to consider burning bondholders or defaulting?


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## Firefly (14 Dec 2011)

Brendan Burgess said:


> So we have run a huge budget deficit paying for a social welfare system, a health system, a level of public service and a general lifestyle which our low tax rates couldn't support.
> 
> We gave a retrospective government guarantee to the depositors who put money into our risky banks.
> 
> ...



Hi Brendan,

I'm not talking about the budget deficit....this is our problem and ours alone to solve. I'm talking about the banking problem where French and German banks are currently being repaid in full for lending to Anglo. Why should the Irish taxpayers be on the hook for all of this? In any case, it's clear to all that we simply do not have the resources to pay all of this back anyway, so why not negotiate when our hand is strongest. 

It's not an Oirish solution at all, it's simply strategic in my book. Look at the way france & Germany are holding out at the moment to get fiscal rules in place before the bailout figures are increased. Look at the way Britain is holding out to protest their banking industry. These are very important times and we need to do what's right for our country first and foremost.


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## Brendan Burgess (14 Dec 2011)

The largest part of our debt is due to the Budget Deficits we ran up.

A significant part of it is due to the fact that we did not burn the depositors. All the depositors in Irish banks have been paid in full. They were given a retrospective guarantee. 

The senior bondholders who rank equally with the depositors were not burnt. 

Some of the subordinated bondholders were burnt. The shareholders were burnt. 

We made a big mistake. We should not have guaranteed the depositors/bondholders in the non systemic banks. But we have to pay the cost of that mistake. 

The EU/IMF/ECB  has bailed us out for all our mistakes including our continued policy of living well beyond our means.


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## 7seats (14 Dec 2011)

Hi Brendan,

Agree that the largest part of our debt is the Budget deficit we ran up.  

However, when stamp duty was flowing in to the Government coffers, driven by the massive amounts of money pumped into the building trade by European Banks, there was no deficit.

The eu/imf/ecb may have bailed us out, but the primary beneficiaries were those European Banks.

We may agree to differ on this one


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## shweeney (14 Dec 2011)

If we vote no, they'll go ahead without us - I don't think the French & Germans would shed any tears if ourselves, Greece and Portugal fell off the back of the van (Italy's a different matter).


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## Brendan Burgess (14 Dec 2011)

7seats said:


> driven by the massive amounts of money pumped into the building trade by European Banks, there was no deficit.
> 
> The eu/imf/ecb may have bailed us out, but the primary beneficiaries were those European Banks.



We borrowed the money ourselves. The ordinary Irish punter borrowed money from the banks to buy their homes ( and investment properties and overseas investment properties). Let's not blame the lenders. They did not force it on us. 

I don't think that the European banks lent to the building trade. They lent to the Irish banks such as Anglo and Irish Nationwide which we failed to regulate properly.



> We may agree to differ on this one



I presume that we are agreed that we should not have guaranteed the depositors or bondholders in Anglo or the Irish Nationwide? 

At the time, if I remember correctly, the EU were annoyed at our unilateral decision to provide this guarantee. It's easy to forget that now, when we have a hangover. It's much easier to blame the barman for forcing the drink on us.


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## Firefly (14 Dec 2011)

Brendan Burgess said:


> We borrowed the money ourselves. The ordinary Irish punter borrowed money from the banks to buy their homes ( and investment properties and overseas investment properties). Let's not blame the lenders. They did not force it on us.



Brendan,

I agree, however, the French & German banks did not calculate their risks very well did they? They kept pouring money into our banks when they themselves should have  diversified away. Like any business that gets into serious trouble there are often debt writedowns with creditors, why is this any different?  

Another point I'd like to make about this is that, yes, these were Irish banks in the sense that they (largely) operated here but they were not owned by the Irish people. They were Public Limited Companies, so why should the Irish people be on the hook? Surely, it is a european banking problem that should be resolved by Europe?

Apologies for all the questions - I'm not an expert by any means in this field but just asking (to me) obvious questions.


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## Jazz01 (14 Dec 2011)

> We borrowed the money ourselves. The ordinary Irish punter borrowed  money from the banks to buy their homes ( and investment properties and  overseas investment properties). Let's not blame the lenders. They did  not force it on us.


I don't have a second property in Ireland or abroad... & Yes, "they" did try to force money on myself & other half... any time we made contact with the bank, there was a sales pitch, numerous letters etc... so they were actively looking to give people "easy money". 

Now I am one of those paying for that reckless lending AND borrowing... so please don't insinuate that the banks are "clean" in all of this... fault / blame does ly on both sides... but there was a reckless attitude in the lending... there is no doubt there.


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## 7seats (14 Dec 2011)

> We borrowed the money ourselves. The ordinary Irish punter borrowed money from the banks to buy their homes ( and investment properties and overseas investment properties). Let's not blame the lenders. They did not force it on us.



Yes, we sure did borrow the money and I have no doubt that those that can will pay it back, and I am certanly not suggesting debt forgiveness on individual commitments.  

You say 





> Let's not blame the lenders


, really?  We shouldnt hold institutions accountable for lending practices such as 100% mortgages preapproved by post etc?

I just think that whenever I hear the term "Bailout" or "resue" I have to ask myself who, exactly, has been rescued...it certainly doesnt feel as if it was the people of Ireland at this point, but Im no economist.


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## Mpsox (14 Dec 2011)

Brendan Burgess said:


> We borrowed the money ourselves. The ordinary Irish punter borrowed money from the banks to buy their homes ( and investment properties and overseas investment properties). Let's not blame the lenders. They did not force it on us.


 
Banks have a duty under the Cental Bank Consumer Protection code 
to 
1: act honestly, fairly and professionally in the best interests of its customers and the integrity of the market;
2 act with due skill, care and diligence in the best interests of its​​​​customers;
3 not recklessly, negligently or deliberately mislead a customer as to the real or perceived advantages or disadvantages of any product or service;

I accept this may not necessarily apply to mortgage lending but the reality is that banks sold unsuitable products to people who were often financially illiterate. Plenty of people who worked in banks during the boom were motivated purely and simply by their commission and nothing else. I'm not arguing the people shouldn;t take responsibility for their own decisions, but it is incredible niave to think that the banks were not in some way also responsible for this mess. After all, drug dealers don't force people to buy drugs yet as a state, we blame them, not the addicts.​


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## Smart_Saver (17 Dec 2011)

Mpsox said:


> After all, drug dealers don't force people to buy drugs yet as a state, we blame them, not the addicts.


 
Heroin, cocaine, etc - these Drugs are illegal in Law. The products sold by the banking system were not so you can’t really make this comparison.



Brendan Burgess said:


> Our banks have been given huge amounts of money at 1% and the state, which has been frozen out of the international credit markets, has been given a €65 billion line of credit by the EU/ECB/IMF at around half the rates we could borrow on the international markets.


 
This is true however I seem to remember certain disagreements between the IMF and the EU over this bailout fund.
Wasn't one that that the IMF were quite happy to burn Sub Bondholders among others. But the EU and ECB wouldn't agree to this and would only accept a complete guarantee. So in effect ‘Oirish’ hands were tied to not burning everyone and as a result we have to pay back 750 million there in October and another 1.2 billion in January. 
Or is this not correct ??


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## 7seats (19 Dec 2011)

On Fireflys original post....it appears Brian Hayes is in agreement
http://www.examiner.ie/ireland/minister-no-eu-yes-vote-without-debt-deal-177717.html

but An Tanaiste is not.....

http://www.thejournal.ie/better-dea...erendum-government-says-maybe-308111-Dec2011/


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## Smart_Saver (25 Jan 2012)

Was watching Vincent Browne last night. They were discussing in detail some documentation (I don't know if it's draft or not) regarding the upcoming Treaty.
Does anyone have a link to this documentation or is it open to the general public ? 
Because a few points raised by Vincent last night regarding this document made his guests very uncomfortable.


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