Yet were it not for ECB policy and its hubristic blind spot, Irish banks would have not been able to fuel the Irish property and consumption boom.
ECB policy designed to maintain stability and geared to support Germany unification and core Eurozone economies was wholly unsuitable for Ireland.
Its sub-office the Irish central bank and our national financial regulator bought into the grand Euro project and shared the ECB’s blindspot that permitted German banks lend hundreds of billions to peripheral countries.
Germany’s own central bank and regulator resorted to their Nelsons' eye so to be “shocked” when forced to domicile rogue Depfka’s €180bn losses on Hypos balance sheet.
Not to be outdone the Bank of England's blind spot pemitted tens of billions to flow into Ireland unchecked.
Why was it that our banks were able to raise billions more than they should ever have been allowed to raise to make loans into an overheating property market?
The fact is no one was policing the policeman. No one stood down UK and German banks reckless lending to Irish Banks. No one questioned the wisdom of fuelling unsustainable property and consumer spending booms.
We are now faced with what amounts to be an insolvency work out plan that demands we cash in our national pension fund to stuff our banks full of capital. Yet stuffing live turkeys doesn’t turn them into swans.
This time out the banking numbers had better stack up. Many rightly fear they won’t. They worry that what’s happening again is another bout of can kicking. This time the can is being kicked into ambitious economic performance targets which no sooner had they been committed to by this Government were stretched by the IMF. The addition of an extra year to achieve the 3% debt/GDP target allows for slippage that can only come from undershooting assumed growth rates or funding costs of additional bank capitalisation support.
We are still living in kick the can land. We have no idea how profitable the shrunken banks will be. One thing is for sure to reversing their deposit to loan ratios will continue to distort the market for savings and cause retail lending rates to rocket.
If banks average costs of funds is dictated by the states rating plus a margin for risk for the bank, then average government debt rates will set the floor for bank rates – at least those demanded by those who lend to our banks. The cycle is set for risk adverse credit crunch that will marginalise and consign consumers and business enterprise to penal interest rates for some time to come.
While we have been withdrawn from the Atlantic Wall, no longer a fighting force, the Portuguese are now being rushed to man the defences.
Lions led by Donkeys, Irish taxpayers have been sacrificed to buy time for others to shore up their homeland defences. The problem is the markets won't stop until they achieve total victory. It's not the first time we have fought another mans war on his turf - perhaps we would have been better off fighting it on our ground and told bank bond holders and their protective proxy you are going to have to pay.
Digging up the Punt blanks and recalibrating Sandyford's printing presses might still have to happen. One wonders if in the donkeys in Merrion Street's bunker are hatching a plan B?
In a country that must once again economically plan for emigration the words of Paddy Kavanagh probably reflects the feelings of many today. It might also be an ode to Fianna Fail's cronyist legacy
O stony grey soil of Monaghan
The laugh from my love you thieved;
You took the the gay child of my passion
And gave me your clod-conceived.
You clogged the feet of my boyhood
And I believed that my stumble
Had the poise and stride of Apollo
And his voice my thick-tongued mumble.
You told me the plough was immortal!
O green-life-conquering plough!
Your mandril strained, your coulter blunted
In the smooth lea-field of my brow.
You sang on steaming dunghills
A song of coward's brood,
You perfumed my clothes with weasel itch,
You fed me on swinish food.
You flung a ditch on my vision
Of beauty, love and truth.
O stony grey soil of Monaghan
You burgled my bank of youth!
Lost the long hours of pleasure
All the women that love young men.
O can I still stroke the monster's back
Or write with unpoisened pen
His name in these lonely verses
Or mention the dark fields where
The first gay flight of my lyric
Got caught in a peasant's prayer.
Mullahinsha, Drummeril, Black Shanco-
Wherever I turn I see
In the stony grey soil of Monaghan
Dead loves that were born for me.
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