Instead of European Bailout, Some Call Default Better Option

Olympia · **Joined:** Nov 2, 2009 **Posts:** 393

NY Times
http://www.nytimes.com/2010/11/23/busin ... .html?_r=1

Quote:

November 22, 2010
In European Debt Crisis, Some Call Default Better Option
By LANDON THOMAS Jr.
DUBLIN — Ireland has finally taken its medicine, accepting the financial rescue package European officials have been pushing for several weeks.

But even as Europe moved to avert this latest debt crisis, economists and policy experts are increasingly debating whether it would be better, and fairer, for the Continent’s weakest economies to default on payments to lenders.

Many experts now say that bailouts only delay the inevitable. Instead of further wounding their economies with drastic budget-slashing, the specialists assert, governments should immediately start talks with bondholders and force them to accept a loss on their investments.

The risk, of course, is an investor panic that would seize financial markets at a time when the global economy remains on tenterhooks.
>>>

onestepbehind · **Joined:** Oct 3, 2008 **Posts:** 3017

http://www.newstalk.ie/news/8german-pm- ... tors-sh31/

http://www.newstalk.ie/news/2uk-mep-say ... endence26/

genki33 · **Posted:** Wed Nov 24, 2010 12:37 pm

http://www.bloomberg.com/news/2010-11-2 ... -lynn.html

Quote:

It’s not too late. The request for aid may have been made. The negotiations may have started. But Irish Prime Minister Brian Cowen can still refuse a bailout from the European Union and the International Monetary Fund.

It might sound like madness for a drowning man to refuse a lifebelt. But the decision the Irish make in the next few days will shape the future of their nation for a generation.

Ireland would be better off going bust than taking a loan. The conditions attached to a rescue aren’t worth it: Once it takes EU money, it will never get off the hook. And the Irish banks aren’t worth saving anyway. Defaulting on your debts is a far less scary prospect than usually portrayed.

The real question is whether Ireland’s politicians have the courage to take that step

Unfortunately we know the answer to that...

lord vader · **Joined:** Jul 6, 2006 **Posts:** 1964

what did morgan keely Lenny asnd cowen like being tickled and praised by their Europeam masters?

Lenny always says our European partners say this is the way to go so obviously we must then do what they say

the 2 brians without a brain appear more and more like stupid puppets with all the strings being pulled by the ECB and the irish banks

Ixelles · **Joined:** Mar 31, 2009 **Posts:** 473

Does anyone have access to the 'CMA Market Data' table showing the probability of default? It used to be free but is now password protected.

Last time I checked, the chances of Greece defaulting was north of 50%, Ireland was above 30% - but that was in late September which is a lifetime ago!

Interesting point in the NYT article about how the bigger European shareholders in the IMF include countries who are most exposed if we were to default. They want to inflict the pain on the Irish taxpayer rather than see a default that would disrupt their own banks and pension funds. Nobody has our interests at heart.

Still, it does reinforce the point Sommerville/Lucey/others have been making: the EU/ECB/IMF have reason to be terrified of us so, weird as it may seem, we have a lot of power right now. If we take their 'bailout' at high interest rates we are bunched. If we don't take it, we are bunched - but so are they.

So: ECB takes on the banks and we'll deal with the sovereign debt. Deal?

FAUGH45568 · **Joined:** Jun 5, 2008 **Posts:** 1486

~Delete.

Permission refused.

catbear · **Posted:** Wed Nov 24, 2010 1:29 pm

lord vader wrote:

the 2 brians without a brain appear more and more like stupid puppets with all the strings being pulled by the ECB and the irish banks

Sorry, can't resist!

Ixelles · **Joined:** Mar 31, 2009 **Posts:** 473

Ixelles wrote:

Does anyone have access to the 'CMA Market Data' table showing the probability of default? It used to be free but is now password protected.

Last time I checked, the chances of Greece defaulting was north of 50%, Ireland was above 30% - but that was in late September which is a lifetime ago!

Interesting point in the NYT article about how the bigger European shareholders in the IMF include countries who are most exposed if we were to default. They want to inflict the pain on the Irish taxpayer rather than see a default that would disrupt their own banks and pension funds. Nobody has our interests at heart.

Still, it does reinforce the point Sommerville/Lucey/others have been making: the EU/ECB/IMF have reason to be terrified of us so, weird as it may seem, we have a lot of power right now. If we take their 'bailout' at high interest rates we are bunched. If we don't take it, we are bunched - but so are they.

So: ECB takes on the banks and we'll deal with the sovereign debt. Deal?

Looks like it's about 38% chance of default, if I'm reading Constantin Gurdgiev's blog post correctly
http://trueeconomics.blogspot.com/2010/11/economics-231110-how-much-will.html

FAUGH45568 · **Joined:** Jun 5, 2008 **Posts:** 1486

39.73

Ixelles · **Joined:** Mar 31, 2009 **Posts:** 473

Thanks - watching Vincent Browne's programme last night, it's a wonder it's not well above 50%

Instead of European Bailout, Some Call Default Better Option

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