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In a fitting tribute to a
disgraceful performance by Irish Prime Minister Brian Cowen in which Cowen
crammed losses of Irish banks down the throats of taxpayers, his government
has at long last collapsed. Six cabinet members (40%) resigned representing
justice, health, trade and enterprise, defense and transport. Earlier in the
week his foreign minister resigned making the total six.
I have a wide selection of articles to choose from. Here is a representative
sample.
Irish Central reports Irish leader Brian Cowen calls an election
for March 11
Irish Prime Minster Brian
Cowen has called an Irish election for March 11th.
Speaking to a packed parliament, Cowen stated that he was reassigning six
cabinet portfolios after six of his ministers resigned.
The proceedings in Irish Parliament had been suspended as opposition leaders
refused to move forward until Prime Minister Brian Cowen explained the six
recent ministerial resignations.
Rumors of an impending collapse of the government and an immediate election
were circulating as the Green Party met to decide whether they would withdraw
support for the government.
Earlier today parliament was suspended after rowdy scenes. Opposition leader,
Fine Gael’s Enda Kenny demanded that proceeding be suspended until
Cowen could explain what was going on within the Government.
Kenny said “This is the worst government in history…This would
not have happened even in the days of great dictators. It is unprecedented,
what you have done.”
He continued “These are the last days of the worst government in the
history of the state.”
Minister for Enterprise, Trade and Innovation Batt O’Keefe tendered his
resignation this morning. Wednesday saw Mary Harney from Health, Dermot Ahern
from Justice, Noel Dempsey from transport and Tony Killeen from defense all
resigned. These followed the resignation of Micheal Martin from foreign
affairs who resigned after a failed leadership challenge.
Kenny said that the actions of Cowen had been a “cowardly, disgraceful
act” and said he was “refusing to come in here today to tell the
people of his country what is happening with a Government that has imploded,
with a Government that is dysfunctional, that has disintegrated, and that had
let our people down”.
The Independent reports Irish government falls and calls 11 March
poll
The Irish Government
collapsed yesterday, with multiple ministerial resignations propelling Prime
Minister Brian Cowen into setting 11 March as the date for a general
election. His Fianna Fail party, which dominates the government, is widely
expected to be largely wiped out in the contest, since under the Cowen
leadership it has slumped to unprecedented depths in opinion polls.
In recent months he was damaged by "Garglegate", when he was judged
to have performed badly in a morning radio interview after a late night of
drinking with journalists and others. Next came "Golfgate" when we
learnt that as finance minister he had played golf and had dinner with the
banker Sean Fitzpatrick, regarded as possibly Ireland's most toxic figure,
since he above all others is blamed for the economic disaster.
Many Fianna Fail members of the Dail, the Irish parliament, have announced
they are not standing again, because they are unlikely to be re-elected or
because they realise they will face years in opposition.
The election was precipitated during a day of turmoil after the small Green
party, which has kept Fianna Fail in power, called for a contest in March.
Four Fianna Fail ministers, plus a long-time supporter, then announced their
resignations. In what is viewed in Dublin as an extraordinary move, Mr Cowen
then redistributed their portfolios with some of his remaining ministers
taking on extra responsibilities. Mary Hanafin, for example, has become
Minister for Trade, Enterprise, Innovation, Tourism, Culture and Sport.
Fianna Fail has traditionally been the largest in the Irish Republic but
recently hit a record low of 13 per cent in the opinion polls.
This has led to predictions that Fianna Fail could drop from more than 70
seats to fewer than 20, a result which would represent a seismic change in
Ireland's political patterns. There are certainly obvious signs of a
widespread loss of public confidence in Fianna Fail. A disaffected
backbencher said recently: "The people just don't trust us. We got
arrogant and got disconnected and wouldn't listen. The people are very angry
and you can't blame them."
Yahoo! News reports Irish premier sets early election for March
11
Cowen's Fianna Fail party
has fallen to record-low levels of support after leading the country from the
Celtic Tiger boom to the edge of national bankruptcy. Adding to the sense of
chaos, the prime minister managed to bring his own administration to the
brink of collapse Thursday through an ill-calculated bid to inject his
Cabinet with fresh blood.
Five ministers — a third of Cowen's Cabinet — resigned from the
departments of defense, justice, health, transport and trade between
Wednesday night and Thursday morning because they were not planning to seek
re-election. Cowen hoped to promote five new lawmakers in their place to
boost their pre-election profiles.
But the gambit provoked fury in parliament and a backlash from Cowen's
coalition partners in government, the environmentalist Green Party. Cowen
spent the morning pleading with the Greens to back the election of the new
Cabinet ministers but they refused and demanded that he set an election date.
When Cowen finally appeared in parliament, he appointed five current Cabinet
ministers to take on the additional departments for the next few weeks before
parliament is dissolved in mid-February. The move avoided the need for a
parliamentary vote that Cowen was sure to lose.
Fianna Fail lawmakers expressed dismay that their leader hadn't seen the
Green opposition coming.
"I'm really infuriated by what's happened. ... Whatever his great plan
was, it has totally backfired," said Fianna Fail lawmaker Tom Kitt.
"I've never seen anything like it."
Ireland has nationalized four of the six Irish-owned banks and repaid tens of
billions to foreign bondholders. It spent two years trying to fund the bank
bailouts itself, but the cost drove Ireland's 2010 deficit to 32 percent of
gross domestic product and forced the country to negotiate a euro67.5 billion
($91 billion) bailout loan with the European Union and the International
Monetary Fund.
So far Ireland has received euro5 billion ($6.7 billion) of those funds. The
two opposition parties expected to win the March 11 election and form the
next coalition government, Fine Gael and Labour, have pledged to reopen
negotiations with the EU and IMF.
The Mail Online reports Beleaguered Irish PM calls general election
for March 11 after failing to push through Cabinet reshuffle
Irish Prime Minister Brian
Cowen has set a date of March 11 for an general election that will provide a
stern test for his deeply unpopular government.
The Taoiseach [Prime Minister] was forced into a humiliating climbdown in his
plans to replace five Cabinet ministers with junior members of his Fianna
Fail party.
Resignations: Justice minister Dermot Ahern (left) and health minister Mary
Harney, seen here after being pelted with red paint) are among the five
cabinet members to quit
How To Negotiate Haircuts
The two opposition parties expected to win the March 11 election and form the
next coalition government, Fine Gael and Labour, have pledged to reopen
negotiations with the EU and IMF.
I offer the following suggestions on how to negotiate.
The correct procedure is to announce intent to default with a statement
something like "The Irish government refuses to bailout UK, German,
French, and US banks too stupid to realize that Ireland was in the midst of a
gigantic property bubble."
Now doubt EU, ECB, and IMF will offer to cut interest rates to 2% or some
such number, perhaps even 0%.
The correct response to that sort of nonsense should be "This is not be
a question of interest rates. This is a question regarding principal and
principles. In regards to the latter, Irish taxpayers cannot and will not
make whole foreign investors whole for their piss poor decisions. In regards
to the former, and as a gesture of goodwill, we are prepared to offer 2 cents
on the dollar for all debts owed."
That should set an appropriate tone for the "negotiations". It will
also send bondholders a very badly needed message.
Mish
GlobalEconomicAnalysis.blogspot.com
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Thoughts on the great
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