BRUSSELS: Euro zone finance ministers agreed on Tuesday, Nov 16 to lay the groundwork for a bailout of Ireland with the IMF, but said Dublin must decide itself whether to request the aid.
The ministers said they had agreed the European Commission, European Central Bank and International Monetary Fund would this week start a mission to Ireland, whose debt crisis could threaten other euro zone states and the euro area's stability.
Before the ministers met in Brussels, Irish Prime Minister Brian Cowen resisted pressure to request a state bailout but indicated help may be needed for the banking sector, which is a big factor in the country's huge budget deficit.
Eurogroup chairman Jean-Claude Juncker, who chaired Tuesday's talks, vowed to defend the stability of the 16-nation currency zone.
"The discussions that will take place between Ireland and the Commission and the ECB and the IMF will enable us to have at our disposal all the elements and instruments we need were Ireland to make a request for assistance to the EU, the IMF and the Eurogroup," he told a news conference after the talks.
Euro zone sources said that although the mission would focus mainly on helping the banking sector, there was an agreement in principle to trigger aid for Ireland when the joint mission completes its consultations -- perhaps in days -- and that the aid would not be just a programme for the banks.
"I don't have an exact calendar because there are works under way which are intensifying in a targeted and rapid way, to explore the whole variety of necessary measures," French Economy Minister Christine Lagarde said.
"If you ask me whether that is a question of six months or of days, I would say we are closer to a question of days rather than six months."
Concerns that Ireland's crisis could worsen and spread to other countries have unsettled financial markets, and any prolonged uncertainty could cause new jitters.
"There is an air of inevitability that there will be some sort of bailout," said Alan McQuaid, chief economist at Bloxham Stockbrokers. "Why come to Dublin if you are not going to give a bailout?"
He said bond markets might respond positively to the euro zone ministers' actions on Wednesday.
"But I am not convinced that even if we get a bailout the euro zone thing (problems) will finish there. The markets are smelling blood," he said. "There are a lot of guys in the U.S. who are worried that this is going to proceed into a full-blown bond market crisis, it's going to start off in Dublin and end up in Washington."
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IRISH GOVERNMENT RESISTS PRESSURE
Cowen said in Dublin the Irish government was fully funded until mid-2011, and that only its banks may need help. He also acknowledged the government was no closer to publishing a four-year plan for tackling the budget deficit.
Irish banks have grown increasingly reliant on funding from the European Central Bank, as other commercial lenders have been reluctant to lend to them following the financial crisis in fellow euro zone member Greece.
Bank of Ireland, the country's largest lender, signalled last week it had suffered a 10 billion euro outflow of deposits from early August until the end of September.
Allied Irish Banks, which will be more than 90 percent owned by the state following a rights issue later this year, will issue a trading statement later this week with details about its funding situation.
The euro fell more than a cent to below $1.3450 and European stocks shed 2.2 percent on the day as investors worried that the euro zone ministers' meeting would not bring a solution to Ireland's debt crunch.
Some ministers said before the talks that loans from EU emergency funds could only be granted to a government that signed a formal austerity programme, with conditions set and enforced by the European Commission and the IMF.
European Council President Herman Van Rompuy said before Tuesday's talks the future of the 27-nation Union was at stake in the latest spasm of a debt crisis that began a year ago with Greece, which secured an EU/IMF bailout.
"We are in a survival crisis," he said. "We all have to work together in order to survive with the euro zone because if we don't survive with the euro zone, we will not survive with the European Union."
EU sources say possible aid under discussion for Ireland ranges from 45 billion to 90 billion euros ($63-123 billion), depending on how much Dublin needs in support for its banks.
The ECB is now channelling about a quarter of its loans to banks in Ireland. Ireland has said the bill for bailing out its lenders could top 50 billion euros, but investors fear the final figure could be worse. - Reuters
The ministers said they had agreed the European Commission, European Central Bank and International Monetary Fund would this week start a mission to Ireland, whose debt crisis could threaten other euro zone states and the euro area's stability.
Before the ministers met in Brussels, Irish Prime Minister Brian Cowen resisted pressure to request a state bailout but indicated help may be needed for the banking sector, which is a big factor in the country's huge budget deficit.
Eurogroup chairman Jean-Claude Juncker, who chaired Tuesday's talks, vowed to defend the stability of the 16-nation currency zone.
"The discussions that will take place between Ireland and the Commission and the ECB and the IMF will enable us to have at our disposal all the elements and instruments we need were Ireland to make a request for assistance to the EU, the IMF and the Eurogroup," he told a news conference after the talks.
Euro zone sources said that although the mission would focus mainly on helping the banking sector, there was an agreement in principle to trigger aid for Ireland when the joint mission completes its consultations -- perhaps in days -- and that the aid would not be just a programme for the banks.
"I don't have an exact calendar because there are works under way which are intensifying in a targeted and rapid way, to explore the whole variety of necessary measures," French Economy Minister Christine Lagarde said.
"If you ask me whether that is a question of six months or of days, I would say we are closer to a question of days rather than six months."
Concerns that Ireland's crisis could worsen and spread to other countries have unsettled financial markets, and any prolonged uncertainty could cause new jitters.
"There is an air of inevitability that there will be some sort of bailout," said Alan McQuaid, chief economist at Bloxham Stockbrokers. "Why come to Dublin if you are not going to give a bailout?"
He said bond markets might respond positively to the euro zone ministers' actions on Wednesday.
"But I am not convinced that even if we get a bailout the euro zone thing (problems) will finish there. The markets are smelling blood," he said. "There are a lot of guys in the U.S. who are worried that this is going to proceed into a full-blown bond market crisis, it's going to start off in Dublin and end up in Washington."
''
IRISH GOVERNMENT RESISTS PRESSURE
Cowen said in Dublin the Irish government was fully funded until mid-2011, and that only its banks may need help. He also acknowledged the government was no closer to publishing a four-year plan for tackling the budget deficit.
Irish banks have grown increasingly reliant on funding from the European Central Bank, as other commercial lenders have been reluctant to lend to them following the financial crisis in fellow euro zone member Greece.
Bank of Ireland, the country's largest lender, signalled last week it had suffered a 10 billion euro outflow of deposits from early August until the end of September.
Allied Irish Banks, which will be more than 90 percent owned by the state following a rights issue later this year, will issue a trading statement later this week with details about its funding situation.
The euro fell more than a cent to below $1.3450 and European stocks shed 2.2 percent on the day as investors worried that the euro zone ministers' meeting would not bring a solution to Ireland's debt crunch.
Some ministers said before the talks that loans from EU emergency funds could only be granted to a government that signed a formal austerity programme, with conditions set and enforced by the European Commission and the IMF.
European Council President Herman Van Rompuy said before Tuesday's talks the future of the 27-nation Union was at stake in the latest spasm of a debt crisis that began a year ago with Greece, which secured an EU/IMF bailout.
"We are in a survival crisis," he said. "We all have to work together in order to survive with the euro zone because if we don't survive with the euro zone, we will not survive with the European Union."
EU sources say possible aid under discussion for Ireland ranges from 45 billion to 90 billion euros ($63-123 billion), depending on how much Dublin needs in support for its banks.
The ECB is now channelling about a quarter of its loans to banks in Ireland. Ireland has said the bill for bailing out its lenders could top 50 billion euros, but investors fear the final figure could be worse. - Reuters
The Eurozone sovereign debt shocks and US Quantative Easing have light the fuse for Götterdämmerung
ReplyDeleteI relate that the May 2010 EU Finance Ministers’ Summit announced a sacrifice of national sovereignty to preserve the integrity of the Euro. The Leaders’ announcement established a unified economic, political, fiscal, monetary and seigniorage cash aid package for Greece.
Now that assistance appears to be in peril, and the risk of sovereign debt default, and of failed national Treasury auctions, as well as rising interest rates for both corporations and governments looms large. And the risk of substantial competitive currency devaluation, at the hands of currency traders is intensifying by the day.
Ambrose Evans Pritchard in a recent Telegraph article, used the word “Götterdämmerung“, a particularly apt word, to describe the apparent fatal wound to the world’s financial, economic and political systems which is coming soon, as bond traders continue calling interest rates higher, such as the US mortgage rates, and the Interest Rate on the US Government 30 Year US Treasury bond and the Interest Rate on Portugal, Italy, Ireland, Greece And Spain sovereign debt; and as currency traders continue a global sell off of the world’s currencies, as both conduct a war for sovereignty against the world central bankers and world leaders.
God was gracious to provide Revelation 13:3, which reveals that the soon coming apparent fatal wound to the world’s economic and political systems will be healed.
But that it will come at the cost of the rise to power of a world Sovereign and also a world Seignior, the latter comes from Old English and means top dog banker who takes a cut.
Out of the coming investment “flame out”, a global leader and a global banker will rise to establish order: a Sovereign and a Seignior will ascend to govern the world.
According to bible prophecy, their word, will and way will be the law of the land superseding constitutional law and traditional rule of law that comes with national sovereignty.
Perhaps Herman Van Rompuy will rise to be The Sovereign as the Afteramerica website relates that he has called for global governance: nation states are dead … The EU chief relates the belief that countries can stand alone, is a ‘lie and an illusion!’
And perhaps Tony Blair, because of his business connections, will rise to be The Seignior.
Or perhaps the Seignior will be Olli Rehn, one known for calling for calm as related by Ambrose Evans Pritchard in article Telegraph article Greek Rescue Frays as Irish Crisis Drags On.
And yet again, The Seignior might be the co-chair of the Council on Foreign Relations, the CFR, Robert Rubin, who was US Treasury Secretary during the Greenspan era as related by The New York Times.
All seigniorage will come and go through The Seignior: all sovereign wealth funds, and banks will report to him, as there will be unified regulation of banking globally as referred to, in the James Politi and Gillian Tett Financial Times article, NY Fed Chief Timothy Geithner In Push For Global Bank Framework
Soon there will be no national seigniorage anywhere as sovereign debt interest rates will explode to the point where there will be no buyers.
This is already the case for Portugal, Italy, Ireland, Greece and Spain, as they have lost their seigniorage authority. Their fiscal needs are provided for by the ECB which buys their bond issues, as well as debt from their banks. The ECB is the sole lender to these nations. Currently the ECB is The European Seignior.
Sovereign nations and their constitutions will be history, as principles of global governance working through regional economic and security pacts and leaders’ agreements will serve as the basis for regional currencies or a global currency.
The Seignior’s financial and economic power will complement the military and political power of the Sovereign; and between the two they own the world “lock, stock and barrel”