Currently 20 cents of every euro of Irish taxes is going to pay the interest on the €uro-bank bail-out debts. The Irish bail-out plan is costing €54,800 per Irish household. Ireland’s future thus looks a lot more bleak than Iceland’s path of debt default and a devaluation of 60% two years ago which has the country rebounding: exports and manufacturing are growing by 20%, tourism is back near all-time highs, real wages are rising, unemployment is declining sharply, interest rates fell from 18% to 5.5% and the stock market has rebounded 50% from its lows. The bond rating agencies have already re-rated Iceland investment grade. In contrast the €uro-banker’s bail-out will only burden the next generation of Irish who don’t flee with crushing debts not of their making… Ireland’s long love affair with Brussels has come to an end. It is not inconceivable that Ireland could vote no… making it stick is the problem…Daily Press Summary
Enda Game On
Ireland has just tossed a mighty spanner in the EU-works. The Taoiseach has confirmed in the Dáil that the Attorney-General has advised a referendum is necessary on the EU’s fiscal union plan, “The Irish people will be asked for their authorisation in a referendum to ratify the European stability treaty”, Enda Kenny told the Irish parliament. Cameron was unable to veto a the plan but the Irish people might just be able. The last time a €urozone prime minister promised a referendum on the EU, the EUrocat dictators replaced him with unelected technocrats. That won’t happen in Ireland.
Tuesday, 28 February 2012
Merkel fails to obtain absolute parliamentary majority for second Greek bailout within her coalition;
German Constitutional Court rules that 9-man special Bundestag EFSF Committee is “largely unconstitutional”
The Bundestag approved the second Greek bailout package by 496 votes in favour to 90 against, with 5 abstentions. Despite voicing their concerns over the package’s shortcomings, the opposition SDP and Green parties voted with the government. Only far-left Die Linke voted against the package. However, a total of 20 coalition MPs either voted against the government or abstained, meaning that Chancellor Angela Merkel was unable to secure a symbolically important absolute parliamentary majority of 311 out of 620 votes based solely on coalition MPs.
In a speech preceding the vote, Merkel admitted that the bailout did not offer “a 100% guarantee of success”, but that the alternative of an uncontrolled Greek default would be even worse. Merkel also announced that providing other eurozone members followed suit, Germany would pay half of its cash contribution – a total of €11bn - to the eurozone’s new permanent bailout fund, the ESM, this year and the other half next year, so that the fund would have an effective lending capacity of €500bn after only two years instead of the five originally envisaged.
Bild reports that most MPs only received the full 726 page documentation covering all aspects of the package over the weekend. The paper interviewed a number of MPs ahead of the vote who admitted that they intended to vote in favour of the bailout even though they had not read the full document. On his Telegraph blog, Mats Persson notes that the vote “marked another low-water mark for parliamentary scrutiny” and “that discontent over the bailouts is slowly chipping away at Merkel’s Coalition majority…This matters for the eurozone as this is far from being the last crisis-related vote we’ll see in the Bundestag”. Open Europe’s live coverage of the debate and vote in the Bundestag yesterday, as well as Open Europe’s blog post looking at the extent to which German MPs were able to exercise proper scrutiny was featured by the Guardian and Telegraph live blogs.
This morning the German Constitutional Court ruled that the Bundestag’s 9-man special committee to determine the use of the eurozone’s temporary bailout fund, the EFSF, was “largely unconstitutional” on the grounds that parliament must be more involved in decisions concerning the euro rescue. The Court ruled that the committee could decide on the purchases of government bonds on financial markets using the eurozone’s temporary bailout fund, the EFSF, in instances where speed and confidentiality were of the essence. Die Welt notes that the decision could slow down the deployment of further German loan guarantees as part of eurozone bailouts.
Bild Welt Spiegel FAZ Süddeutsche Spiegel 2 Welt 2 Bild 2 Handelsblatt FAZ 2 FTD Times Mail GuardianEuropean Voice EurActiv Telegraph FT WSJ CityAM The Irish Times La Tribune Les Echos Guardian: Live Blog Telegraph: Live Blog German Constitutional Court Ruling Telegraph blogs: Persson
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