Socializing losses: Trilateral takeover of Europe? …………
http://rt.com
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Published: 13 November, 2011, 19:07
Edited: 14 November, 2011, 02:17

Anti-austerity protesters hold a Greek flag reading ‘not for sale’ during a student parade in Athens, attended by the Greek minister of education (AFP Photo / LOUISA GOULIAMAKI)
The sovereign debt crisis tightening its grip on Europe has claimed the scalps of two prime ministers – those of Greece and Italy. Looking at the men poised to replace them, one cannot but ask – is this another turn of the screw for ordinary people?
Greece and Italy hold huge swathes of public debt they are unable to service unless they get massive European Central Bank and International Monetary Fund support, as a prelude to refinancing by international banks.
Greece has replaced its prime minister after he dared to say he would put a further round of harsh austerity measures to a referendum vote. The country’s new PM is Lucas Papademos, former vice president of the ECB and of Greece’s own Central Bank, and a member of David Rockefeller’s (JPMorgan Chase/Exxon) powerful Trilateral Commission.
As for Italy, instead of Silvio Berlusconi they got the former European Commissioner Mario Monti, who happens to be European chairman of the Trilateral Commission.
Whenever we hear of “sovereign debt crises” – whether in Mexico 1997, Brazil 1999, in my native Argentina in 2001/2, or today in Greece, Italy, Spain, Portugal, Ireland and (soon to come) the UK, France, or the US – what it really means is that governments cannot collect enough tax revenues from their people to pay interest and capital on debt that is mostly in the hands of private banking institutions.
Cutting through the Orwellian Newspeak* of the media, this means that the people of Greece, Italy, and Argentina must pay for the mistakes of bankers and corrupt governments, suffering higher taxes, unemployment, lower wages and pensions, and a deterioration in public healthcare, education, and infrastructure.
So, whenever there is a public debt crisis, “We the People” must pay for it.
Adrian Salbuchi is a political analyst, author, speaker and radio/TV commentator in Argentina
However, when in September 2008a private debt crisis exploded due to the derivatives swindle which buried Lehman Brothers, Merrill Lynch, AIG and many other private institutions, the US and other governments came to the rescue of the bankers, providing bailouts for banks “too big to fail” (Newspeak for too powerful to fail). They saved the likes of CitiCorp, Bank of America, JPMorgan Chase, Goldman Sachs with…. taxpayers money (TARP), and by having the FED (hyper)inflate the US dollar (know in Newspeak as “Quantitative Easing I, II and III”), which means passing a huge chunk of the cost of those bailouts on to the Rest of the World using the US dollar as global currency.
So again, irrespective of whether debt collapses are public or private, it is always “We the People” who pay because, under the current system, all profits are privatized and all losses are socialized.
But let us go back to Messrs Monti and Papademos. They sit on the Trilateral Commission together with hundreds of corporate chairmen and CEOs such as Ana Botin (Bank Banesto/Santander, Spain), Peter Sutherland (Goldman Sachs/BP, UK), Michel David-Weill (Lazard Bank, France), Jurgen Fitschen (Deutsche Bank, Germany), Stephen Green (HSBC, UK), Nigel Higgins (Rothschild Group, UK), Lord Guthrie (N M Rothschild, UK), Klaus-Peter Müller (Commerzbank, Germany), Dieter Rampl (UniCredito, Italy), Otto Ruding (CitiCorp Europe), Lord Simon of Highbury (Morgan Stanley, UK), Emilio Ybarra (BBVA, Spain), Robert Kelly (Bank of NY Mellon) Lord Brittan (UBS, UK), Robert Zoellick (World Bank), plus Timothy Geithner, Henry Kissinger and many, many others…
In fact, the Trilateral Commission articulates with the powerful Council on Foreign Relations (New York), Chatham House (London) and many other think-tanks forming an intricate web of private global power-brokers bringing together key players in finance, industry, media, government, academia, intelligence and the military, who run today’s global system focusing on their interests, and clearly not on those of “We the People.”
No doubt Messrs Papademos and Monti will do everything necessary to ensure Italy and Greece do not default on their debts – but rather that their peoples endure all the hardship, undergo all the pain, and make all the sacrifices so that major bankers sitting on the Trilateral can all get their money back. Those who should never have made loans to Greece and Italy (and Argentina and Portugal…) the way they did.
Adrian Salbuchi for RT
* Newspeak – a fictional language in George Orwell’s novel “1984”.
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Ex-Bush Adviser: Germany Prints Old Currency in Case Euro Ditched ……….
By Michael Kling
“The decision has already been made by the government that leaving the euro is a possibility. I think they have already got the printing machines going and are bringing out the old deutsche marks they have left over from when the euro was introduced.”
Malmgren, co-founder of Principalis Asset Management, acknowledged that leaving the euro would be a radical move that would cause Germany’s export prices to jump, but said German industries are strong enough to handle price increases, Citywire reported.
Other countries have let currency unions before, Malmgren said, citing the report, “Checking Out: Exits from Currency Unions.”
Countries leaving currency unions are usually larger, wealthier, and more democratic and typically have higher inflation than their partners, according to the report, published by the Monetary Authority of Singapore.
Malmgren predicts that more eurozone countries will default, causing deep changes in society, Citywire reported. “It is important to begin preparing the public to deal with this situation.”
Malmgren isn’t the only one saying the euro is in trouble.
“The euro is nearing its ugly end,” said Stefan Homburg, head of Germany’s Institute for Public Finance, according to The Telegraph. “A collapse of monetary union now appears unavoidable.”
The Bundestag, Germany’s legislature, approved more bailout funds for Greece but the growing rescue fund is becoming increasingly unpopular in Germany. Many economists and investment professionals say the fund is not large enough to save Greece and other eurozone countries from defaulting.
Meanwhile, Ireland’s central bank reportedly is printing Ireland’s old currency in case that country leaves the eurozone. At least that’s the rumor circulating in Dublin, notes Alan McQuaid, chief economist at Bloxham stockbrokers in that city.
McQuaid, writing a guest commentary for The Guardian, says he’s not sure if the rumor is true. But he does hope Ireland has contingency plans in case the euro disintegrates.
© Moneynews. All rights reserved.
Netherlands first EU country to enshrine net neutrality into law
http://euobserver.com
23.06.2011 @ 09:26 CET
EUOBSERVER / BRUSSELS – The Netherlands on Wednesday (22 June) became the first EU member state to enshrine in law the concept of net neutrality, the idea that there should be no hierarchy of information or services in the internet.
The measure, passed by a large majority in the lower house and expected to pass without hitch through the senate, will prevent Dutch mobile telephone operators from blocking or charging consumers more for using internet-based communications services.

“The blocking of services or the imposition of a levy is a brake on innovation,” deputy prime minister Maxime Verhagen said, according to the New York Times.
“That’s not good for the economy. This measure guarantees a completely free Internet which both citizens and the providers of the online services can then rely on.”
Net neutrality is one of the hottest global regulatory issues around. Internet service providers argue they need to be allowed to charge premiums for some services, such as the video-sharing website YouTube, which they say congest the networks.
Digital activists meanwhile say that data on the information highway needs to be treated without discrimination regardless of their nature or source, otherwise a hierarchy will be introduced whereby some information is only available to those who can pay.
The European consumers group, Beuc, welcomed the “landmark” initiative.
“Contrary to the EU Telecoms Package and the UK approach, where transparency of traffic management is the tiny step taken, this Dutch law safeguards consumers’ right to have access to the content, service and applications of their choice,” said the group’s Monique Goyens.
The telecommunications industry immediately warned that the law may put operators off from making investments in high-speed net infrastructure, for fear of not recouping their money.
The Dutch law is the first such in the EU and second globally. Chile has also written net neutrality into its telecommunications law that came into effect in May.
So far the EU has indicated it will not introduce legislation to protect net neutrality. In April, digital agenda commissioner Neelie Kroes said she would leave it to the markets to self-regulate.
Her report on the issue said that traffic management on the Internet “is necessary to ensure the smooth flow of internet traffic, particularly at times when networks become congested, and so guarantee a consistent good quality of service.”
However, she would not hesitate to come up with “more stringent measures” if Brussels deems that internet service providers go too far in their “traffic management” measures.
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When Irish Eyes Are Crying
found on : http://dailybail.com
org. source : http://www.vanityfair.com
First Iceland. Then Greece. Now Ireland, which headed for bankruptcy with its own mysterious logic. In 2000, suddenly among the richest people in Europe, the Irish decided to buy their country—from one another. After which their banks and government really screwed them. So where’s the rage?

CRASH COURSE
University College Dublin professor Morgan Kelly, in Hogans pub, in Dublin. He predicted the Irish Crash in 2006.
When I flew to Dublin in early November, the Irish government was busy helping the Irish people come to terms with their loss. It had been two years since a handful of Irish politicians and bankers decided to guarantee all the debts of the country’s biggest banks, but the people were only now getting their minds around what that meant for them. The numbers were breathtaking. A single bank, Anglo Irish, which, two years before, the Irish government had claimed was merely suffering from a “liquidity problem,” faced losses of up to 34 billion euros. To get some sense of how “34 billion euros” sounds to Irish ears, an American thinking in dollars needs to multiply it by roughly one hundred: $3.4 trillion. And that was for a single bank. As the sum total of loans made by Anglo Irish, most of it to Irish property developers, was only 72 billion euros, the bank had lost nearly half of every dollar it invested.
The two other big Irish banks, Bank of Ireland and, especially, Allied Irish Banks (A.I.B.), remained Ireland’s dirty little secrets. Both older than Ireland itself (the Bank of Ireland was founded back in 1783; A.I.B. is made up of three banks founded in the 19th century), both were now also obviously bust. The Irish government owned big chunks of the two ancient banks but revealed less about them. As they had lent vast sums not only to Irish property developers but also to Irish homebuyers, their losses were also obviously vast—and similar in spirit to the losses at the upstart Anglo Irish.
Even in an era when capitalists went out of their way to destroy capitalism, the Irish bankers set some kind of record for destruction. Theo Phanos, a London hedge-fund manager with interests in Ireland, says that “Anglo Irish was probably the world’s worst bank. Even worse than the Icelandic banks.”
Ireland’s financial disaster shared some things with Iceland’s. It was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance. But while Icelandic males used foreign money to conquer foreign places—trophy companies in Britain, chunks of Scandinavia—the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another. An Irish economist named Morgan Kelly, whose estimates of Irish bank losses have been the most prescient, made a back-of-the-envelope calculation that puts the losses of all Irish banks at roughly 106 billion euros. (Think $10 trillion.) At the rate money currently flows into the Irish treasury, Irish bank losses alone would absorb every penny of Irish taxes for at least the next three years.
In recognition of the spectacular losses, the entire Irish economy has almost dutifully collapsed. When you fly into Dublin you are traveling, for the first time in 15 years, against the traffic. The Irish are once again leaving Ireland, along with hordes of migrant workers. In late 2006, the unemployment rate stood at a bit more than 4 percent; now it’s 14 percent and climbing toward rates not experienced since the mid-1980s. Just a few years ago, Ireland was able to borrow money more cheaply than Germany; now, if it can borrow at all, it will be charged interest rates nearly 6 percent higher than Germany, another echo of a distant past. The Irish budget deficit—which three years ago was a surplus—is now 32 percent of its G.D.P., the highest by far in the history of the Eurozone. One credit-analysis firm has judged Ireland the third-most-likely country to default. Not quite as risky for the global investor as Venezuela, but riskier than Iraq. Distinctly Third World, in any case.
Yet when I arrived, in early November 2010, Irish politics had a frozen-in-time quality to it. In Iceland, the business-friendly conservative party had been quickly tossed out of power, and the women booted the alpha males out of the banks and government. (Iceland’s new prime minister is a lesbian.) In Greece the business-friendly conservative party was also given the heave-ho, and the new government is attempting to create a sense of collective purpose, or at any rate persuade the citizens to quit cheating on their taxes. (The new Greek prime minister is not merely upstanding, but barely Greek.) Ireland was the first European country to watch its entire banking system fail, and yet its business-friendly conservative party, Fianna Fáil (pronounced “Feena Foil”), would remain in office into 2011. There’s been no Tea Party movement, no Glenn Beck, no serious protests of any kind. The most obvious change in the country’s politics has been the role played by foreigners. The Irish government and Irish banks are crawling with American investment bankers and Australian management consultants and faceless Euro-officials, referred to inside the Department of Finance simply as “the Germans.” Walk the streets at night and, through restaurant windows, you see important-looking men in suits, dining alone, studying important-looking papers. In some new and strange way Dublin is now an occupied city: Hanoi, circa 1950. “The problem with Ireland is that you’re not allowed to work with Irish people anymore,” I was told by an Irish property developer, who was finding it difficult to escape the hundreds of millions of euros in debt he owed.
Ireland’s regress is especially unsettling because of the questions it raises about Ireland’s former progress: even now no one is quite sure why the Irish suddenly did so well for themselves in the first place. Between 1845 and 1852, during the Great Potato Famine, the country experienced the greatest loss of population in world history—in a nation of eight million, a million and a half people left. Another million starved to death or died from the effects of hunger. Inside of a decade the nation went from being among the most densely populated in Europe to the least. The founding of the Irish state, in 1922, might have offered some economic hope—they could now have their own central bank, their own economic policies—but right up until the end of the 1980s the Irish failed to do what economists expected them to: catch up with their neighbors’ standard of living. As recently as the 1980s one million Irish people—a third of the population—lived below the poverty line.
What has occurred in Ireland since then is without precedent in economic history. By the start of the new millennium, the Irish poverty rate was under 6 percent and by 2006 Ireland was one of the richest countries in the world. How did that happen? A bright young Irishman who got himself hired by Bear Stearns in the late 1990s and went off to New York or London for five years returned feeling poor. For the better part of a decade there has been quicker money to be made in Irish real estate than in investment banking. How did that happen?
For the first time in history, people and money longed to get into Ireland rather than out of it. The most dramatic case in point are the Poles. The Polish government keeps no comprehensive statistics on the movement of its workforce, but its foreign ministry guesstimates that, since the country’s admission to the European Union, more than a million Poles have left Poland to work elsewhere. At the peak, in 2006, as many as a quarter-million of them were in Ireland. For the United States to achieve a proportionally distortive demographic effect, it would need to hand green cards to 17 million Mexicans.
How did any of this happen? There are many theories: the elimination of trade barriers, the decision to grant free public higher education, the persistent lowering of the corporate tax rate, beginning in the 1980s, which turned Ireland into a tax haven for foreign corporations. Maybe the most intriguing was offered by a pair of demographers at Harvard, David E. Bloom and David Canning, in a 2003 paper called “Contraception and the Celtic Tiger.” Bloom and Canning argued that a major cause of the Irish boom was a dramatic increase in the ratio of working-age to non-working-age Irish brought about by a crash in the Irish birthrate. This had been driven mainly by Ireland’s decision, in 1979, to legalize birth control. That is, a nation’s fidelity to the Vatican’s edicts was inversely proportional to its ability to climb out of poverty: out of the slow death of the Catholic Church arose an economic miracle.
The Harvard demographers admitted their theory explained only part of what had happened. At the bottom of the success of the Irish there remains, even now, some mystery. “It appeared like a miraculous beast materializing in a forest clearing,” writes the pre-eminent Irish historian R. F. Foster, “and economists are still not entirely sure why.” Not knowing why they were so suddenly so successful, the Irish can perhaps be forgiven for not knowing exactly how successful they were meant to be. They had gone from being abnormally poor to being abnormally rich, without pausing to experience normality. When, in the early 2000s, the financial markets began to offer virtually unlimited credit to all comers—when nations were let into the dark room with the pile of money and asked what they would like to do with it—the Irish were already in a peculiarly vulnerable state of mind. They’d spent the better part of a decade under something very like a magic spell.
A few months after the spell was broken, the short-term parking-lot attendants at Dublin Airport noticed that their daily take had fallen. The lot appeared full; they couldn’t understand it. Then they noticed the cars never changed. They phoned the Dublin police, who in turn traced the cars to Polish construction workers, who had bought them with money borrowed from Irish banks. The migrant workers had ditched the cars and gone home. Rumor has it that a few months later the Bank of Ireland sent three collectors to Poland to see what they could get back, but they had no luck. The Poles were untraceable: but for their cars in the short-term parking lot, they might never have existed.
True Love’s First Kiss
Morgan Kelly is a professor of economics at University College Dublin, but he did not, until recently, view it as his business to think much about the economy under his nose. He had written a handful of highly regarded academic papers on topics (such as “The Economic Impact of the Little Ice Age”) considered abstruse even by academic economists. “I only stumbled on this catastrophe by accident,” he says. “I had never been interested in the Irish economy. The Irish economy is tiny and boring.” Kelly saw house prices rising madly and heard young men in Irish finance to whom he had recently taught economics try to explain why the boom didn’t trouble them. And they troubled him. “Around the middle of 2006 all these former students of ours working for the banks started to appear on TV!” he says. “They were now all bank economists, and they were nice guys and all that. And they were all saying the same thing: ‘We’re going to have a soft landing.’ ”
The statement struck him as absurd: real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long-term investment real estate has become and flee the market, and the market will crash. It was in the nature of real-estate booms to end with crashes—just as it was perhaps in Morgan Kelly’s nature to assume that, if his former students were cast on Irish TV as financial experts, something was amiss. “I just started Googling things,” he says.
Googling things, Kelly learned that more than a fifth of the Irish workforce was employed building houses. The Irish construction industry had swollen to become nearly a quarter of the country’s G.D.P.—compared with less than 10 percent in a normal economy—and Ireland was building half as many new houses a year as the United Kingdom, which had almost 15 times as many people to house. He learned that since 1994 the average price for a Dublin home had risen more than 500 percent. In parts of the city, rents had fallen to less than 1 percent of the purchase price—that is, you could rent a million-dollar home for less than $833 a month. The investment returns on Irish land were ridiculously low: it made no sense for capital to flow into Ireland to develop more of it. Irish home prices implied an economic growth rate that would leave Ireland, in 25 years, three times as rich as the United States. (“A price/earning ratio above Google’s,” as Kelly put it.) Where would this growth come from? Since 2000, Irish exports had stalled, and the economy had been consumed with building houses and offices and hotels. “Competitiveness didn’t matter,” says Kelly. “From now on we were going to get rich building houses for each other.”
The endless flow of cheap foreign money had teased a new trait out of a nation. “We are sort of a hard, pessimistic people,” says Kelly. “We don’t look on the bright side.” Yet, since the year 2000, a lot of people had behaved as if each day would be sunnier than the last. The Irish had discovered optimism.
Their real-estate boom had the flavor of a family lie: it was sustainable so long as it went unquestioned, and it went unquestioned so long as it appeared sustainable. After all, once the value of Irish real estate came untethered from rents there was no value for it that couldn’t be justified. The 35 million euros Irish entrepreneur Denis O’Brien paid for an impressive manor house on Dublin’s Shrewsbury Road sounded like a lot until a trust controlled by the real-estate developer Sean Dunne’s wife reportedly paid 58 million euros for a 4,000-square-foot fixer-upper just down the street. But the minute you compared the rise in prices to real-estate booms elsewhere and at other times, you re-anchored the conversation; you biffed the narrative. The comparisons that sprung to Morgan Kelly’s mind were with the housing bubbles in the Netherlands in the 1970s and Finland in the 1980s, but it almost didn’t matter which examples he picked: the mere idea that Ireland was not sui generis was the panic-making thought. “There is an iron law of house prices,” he wrote. “The more house prices rise relative to income and rents, the more they subsequently fall.”
The problem for Kelly, once he had these thoughts, was what to do with them. “This isn’t my day job,” he says. “I was working on medieval-population theory.”
By the time I got to him, Kelly had angered and alienated the entire Irish business and political establishments, but he himself is neither angry nor alienated, nor even especially public. He’s not the pundit type. He works in an office built when Irish higher education was conducted on linoleum floors, beneath fluorescent lights, surrounded by metal bookshelves, and generally felt more like a manufacturing enterprise than a prep school for real estate and finance—and he likes it. He’s puckish, unrehearsed, and apparently—though in Ireland one wants to be careful about using this word—sane. Though not exactly self-effacing, he is clearly more comfortable talking and thinking about subjects other than himself. He spent years in graduate school, collecting a doctorate from Yale, and yet somehow retained an almost child-like curiosity. “I was in this position—sort of being a passenger on this ship,” he says. “And you see a big iceberg. And so you go and ask the captain: Is that an iceberg?”
His warning to his ship’s captain took the form of his first-ever newspaper article. Its bottom line: “It is not implausible that [Irish real-estate] prices could fall—relative to income—by 40 to 50 per cent.” (They did.) He sent his piece to the small-circulation Irish Times. “It was a whim,” he says. “I’m not even sure that I believed what I was saying at the time. My position has always been ‘You can’t predict the future.’ ” As it happened, Kelly had predicted the future with uncanny accuracy, but to believe what he was saying you had to accept that Ireland was not some weird exception in human financial history. “It had no impact,” Kelly says of his piece. “The response was general amusement. It was What will these crazy eggheads come up with next? sort of stuff.”
What the crazy egghead came up with next was the obvious link between Irish real-estate prices and Irish banks. After all, the vast majority of the construction was being funded by Irish banks. If the real-estate market collapsed, they would be on the hook for the losses. “I eventually figured out what was going on,” says Kelly. “The average value and number of new mortgages peaked in summer 2006. But lending standards were clearly falling after this.” The banks continued to make worse loans, but people borrowing the money to buy houses were growing wary. “What was happening,” says Kelly, “is that a lot of people were getting cold feet.” The consequences for Irish banks—and the economy—of the inevitable shift in market sentiment would be catastrophic. The banks’ losses would lead them to slash their lending to actually useful businesses. Irish citizens in hock to their banks would cease to spend. And, perhaps worst of all, new construction, on which the entire economy was now premised, would cease.
Kelly wrote his second newspaper article, more or less predicting the collapse of the Irish banks. He pointed out that in the last decade they and the economy had fundamentally changed. In 1997 the Irish banks were funded entirely by Irish deposits. By 2005 they were getting most of their money from abroad. The small German savers who ultimately supplied the Irish banks with deposits to re-lend in Ireland could take their money back with the click of a computer mouse. Since 2000, lending to construction and real estate had risen from 8 percent of Irish bank lending (the European norm) to 28 percent. One hundred billion euros—or basically the sum total of all Irish public bank deposits—had been handed over to Irish property developers and speculators. By 2007, Irish banks were lending 40 percent more to property developers than they had to the entire Irish population seven years earlier. “You probably think that the fact that Irish banks have given speculators €100 billion to gamble with, safe in the knowledge that taxpayers will cover most losses, is a cause of concern to the Irish Central Bank,” Kelly wrote, “but you would be quite wrong.”
This time Kelly sent his piece to a newspaper with a far bigger circulation, the Irish Independent. The Independent’s editor wrote back to say he found the article offensive and wouldn’t publish it. Kelly next turned to The Sunday Business Post, but the editor there just sat on the piece. The journalists were following the bankers’ lead and conflating a positive outlook on real-estate prices with a love of country and a commitment to Team Ireland. (“They’d all use this same phrase, ‘You’re either for us or against us,’ ” says a prominent bank analyst in Dublin.) Kelly finally went back to The Irish Times, which ran his article in September 2007.
A brief and, to Kelly’s way of thinking, pointless controversy ensued. The public-relations guy at University College Dublin called the head of the department of economics and asked him to find someone to write a learned attack on Kelly’s piece. (The department head refused.) A senior executive at Anglo Irish Bank, Matt Moran, called to holler at Kelly. “He went on about how ‘the real-estate developers who are borrowing from us are so incredibly rich they are only borrowing from us as a favor.’ I wanted to argue, but we ended up having lunch. This is Ireland, after all.” Kelly also received a flurry of worried-sounding messages from financial people in London, but of these he was dismissive: “I get the impression there’s this pool of analysts in the financial markets who spend all day sending scary e-mails to each other.” He never found out how much influence his little newspaper piece exerted on the minds of people who mattered.
It wasn’t until almost exactly one year later, on September 29, 2008, that Morgan Kelly became the startled object of popular interest. The stocks of the three main Irish banks, Anglo Irish, A.I.B., and Bank of Ireland, had fallen by between a fifth and a half in a single trading session, and a run on Irish bank deposits had started. The Irish government was about to guarantee all the obligations of the six biggest Irish banks. The most plausible explanation for all of this was Morgan Kelly’s narrative: the Irish economy had become a giant Ponzi scheme and the country was effectively bankrupt. But it was so starkly at odds with the story peddled by Irish government officials and senior Irish bankers—that the banks merely had a “liquidity” problem and that Anglo Irish was “fundamentally sound”—that the two could not be reconciled. The government had a report thrown together by Merrill Lynch, which declared that “all of the Irish banks are profitable and well capitalised.” The difference between this official line and Kelly’s was too vast to be split. You believed either one or the other, and until September 2008, who was going to believe this guy holed up in his office wasting his life writing about the impact of the Little Ice Age on the English population? “I went on TV,” says Kelly. “I’ll never do it again.”
Kelly’s colleagues in the University College economics department watched his transformation from serious academic to amusing crackpot to disturbingly prescient guru with interest. One was Colm McCarthy, who, in the Irish recession of the late 1980s, had played a high-profile role in slashing government spending, and so had experienced the intersection of finance and public opinion. In McCarthy’s view, the dominant narrative inside the head of the average Irish citizen—and his receptiveness to the story Kelly was telling—changed at roughly 10 o’clock in the evening on October 2, 2008. On that night, Ireland’s financial regulator, a lifelong Central Bank bureaucrat in his 60s named Patrick Neary, came live on national television to be interviewed. The interviewer sounded as if he had just finished reading the collected works of Morgan Kelly. Neary, for his part, looked as if he had been dragged from a hole into which he badly wanted to return. He wore an insecure little mustache, stammered rote answers to questions he had not been asked, and ignored the ones he had been asked.
A banking system is an act of faith: it survives only for as long as people believe it will. Two weeks earlier the collapse of Lehman Brothers had cast doubt on banks everywhere. Ireland’s banks had not been managed to withstand doubt; they had been managed to exploit blind faith. Now the Irish people finally caught a glimpse of the guy meant to be safeguarding them: the crazy uncle had been sprung from the family cellar. Here he was, on their televisions, insisting that the Irish banks were “resilient” and “more than adequately capitalized” … when everyone in Ireland could see, in the vacant skyscrapers and empty housing developments around them, evidence of bank loans that were not merely bad but insane. “What happened was that everyone in Ireland had the idea that somewhere in Ireland there was a little wise old man who was in charge of the money, and this was the first time they’d ever seen this little man,” says McCarthy. “And then they saw him and said, Who the fuck was that??? Is that the fucking guy who is in charge of the money??? That’s when everyone panicked.”
The Drinks Cabinet
On the morning in early November when the Irish government planned to unveil a brutal new budget, I take my seat in the visitors’ gallery of the Irish Parliament. Beside me sits an aide to Joan Burton, who, as the Labour Party’s financial spokesperson, was at the time a fair bet to become the next minister of finance, the unnatural heir to an unholy mess. Down on the floor the seats are mostly empty, but a handful of politicians, Burton included, discuss what they have been discussing without intermission for the past two years: the nation’s financial crisis.
The first thing you notice when you watch the Irish Parliament at work is that the politicians say everything twice, once in English and once in Gaelic. As there is no one in Ireland who does not speak English and a vast majority who do not speak Gaelic, this comes across as a forced gesture that wastes a great deal of time. I ask several Irish politicians if they speak Gaelic, and all offer the same uneasy look and hedgy reply: “Enough to get by.” The politicians in Ireland speak Gaelic the way the Real Housewives of Orange County speak French. To ask “Why bother to speak it at all?” is of course to miss the point. Everywhere you turn you see both emulation of the English and a desire, sometimes desperate, for distinction. The Irish insistence on their Irishness—their conceit that they’re more devoted to their homeland than the typical citizen of the world is—has an element of bluster about it, from top to bottom. At the top are the many very rich Irish people who emit noisy patriotic sounds but arrange officially to live elsewhere so they don’t have to pay tax in Ireland; at the bottom, the waves of emigration that define Irish history. The Irish people and their country are like lovers whose passion is heightened by their suspicion that they will probably wind up leaving each other. Their loud patriotism is a cargo ship for their doubt.
On this day, in addition to awaiting word on the budget, the Dáil (pronounced “Doyle”), as the Irish call their House of Commons, has before it a vote on whether to hold elections to fill its four empty seats. The ruling party, Fianna Fáil, holds a slim majority of two seats and, because they are universally believed to have created a financial catastrophe, an approval rating of 15 percent. If the elections were held today, they’d be tossed from power—in itself a radical idea, as they have more or less ruled Ireland since its founding as an independent state. Yet they have successfully resisted the call to fill the empty seats.
A bell rings for a vote, and Irish politicians stream in. A few minutes before the vote, the doors to their chamber will be closed and guarded. A politician who is late is a politician who cannot vote. A glass barrier separates the visitors’ gallery and the floor: I ask my tour guide about it. “It’s not to stop people from throwing things at their government,” she says, then goes on to explain. Some years ago an Irish politician came late, after the doors had been locked. He ran up to the visitors’ gallery, jumped down from it into the press gallery, 10 feet below, and from there rappelled down the wall to the floor. They allowed the vote, but put up the glass barrier. They disapproved of the loophole, but rewarded the guy with the wit to exploit it. This, she claims, is very Irish.
The first to take his seat is Bertie Ahern, the prime minister from June 1997 until May 2008 and Political Perp No. 1. Ahern is known both for a native shrewdness and for saying lots of spectacularly dumb-sounding things that are fun to quote. Tony Blair had credited him with a kind of genius in how he brokered the Northern Ireland peace negotiations; on the other hand, seeking to explain the financial crisis, he actually said, “Lehman’s was a world investment bank. They had testicles everywhere.” Ahern spent his last days in office denying he’d accepted bribes from property developers, at least in part because so much of what he did in office seemed justified only if he were being paid by property developers to do it. But Bertie Ahern too obviously believed in the miracle of Irish real estate. After Morgan Kelly published his article predicting the collapse of the Irish banks, for instance, Ahern famously responded to a question about it on national radio by saying, “Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don’t know how people who engage in that don’t commit suicide.”
Now Ahern is just another Irish backbencher, with a hangdog slouch and a face mottled by broken capillaries. To fill the empty hours, he’s taken a job writing a sports column for the Rupert Murdoch tabloid News of the World, which might just be the least respectable job in global journalism. Ahern’s star, such as it was, has fallen.
When the Irish land boom flipped from miracle to catastrophe, a lot of important people’s status, along with perhaps their sense of themselves, flipped with it. An Irish stockbroker told me that many former bankers, some of whom he counts as clients, “actually physically look different.” He’d just seen the former C.E.O. of A.I.B., Eugene Sheehy, in a restaurant, being heckled by other diners. Sheehy once had been a smooth and self-possessed character, whose authority was beyond question. “If you saw the guy now,” says my stockbroker friend, “you’d buy him a cup o’ tea.”
The Irish real-estate bubble was different from the American version in many ways: it wasn’t disguised, for a start; it didn’t require a lot of complicated financial engineering beyond the understanding of mere mortals; it also wasn’t as cynical. There aren’t a lot of Irish financiers or real-estate people who have emerged with a future. In America the banks went down, but the big shots in them still got rich; in Ireland the big shots went down with the banks. Sean Fitzpatrick, a working-class kid turned banker, who built Anglo Irish Bank more or less from scratch, is widely viewed as the chief architect of Ireland’s misfortune: today he is not merely bankrupt but unable to show his face in public. Mention his name and people with no interest in banking will tell you with disgust how he disguised millions of euros in loans made to himself by his own bank. What they don’t mention is what he did with the money: invested it in Anglo Irish bonds! When the bank failed Fitzpatrick was listed among its creditors, having (in April 2008!) purchased five million euros of Anglo Irish subordinated floating-rate notes.
The top executives of the three big banks all operated in a similar spirit: they bought shares in their own companies right up to the moment of collapse, and continued to pay dividends, as if they had capital to burn. Virtually all of the big Irish property developers who behaved recklessly signed personal guarantees for their loans. It’s widely assumed that they must be hiding big piles of money somewhere, but the evidence thus far suggests that they are not. The Irish Property Council has counted at least 29 suicides by property developers and construction workers since the crash—in a country where suicide often goes unreported and undercounted. “I said to all the guys, ‘Always take money off the table.’ Not many of them took money off the table,” says Dermot Desmond, an Irish billionaire, who made his fortune from software in the early 1990s, and so counts here as old money.
The Irish nouveau riche may have created a Ponzi scheme, but it was a Ponzi scheme in which they themselves believed. So too for that matter did some large number of ordinary Irish citizens, who bought houses for fantastic sums. Ireland’s 87 percent rate of home-ownership is among the highest in the world. There’s no such thing as a non-recourse home mortgage in Ireland. The guy who pays too much for his house is not allowed to simply hand the keys to the bank and walk away. He’s on the hook, personally, for whatever he borrowed. Across Ireland, people are unable to extract themselves from their houses or their bank loans. Irish people will tell you that, because of their sad history of dispossession, owning a home is not just a way to avoid paying rent but a mark of freedom. In their rush to freedom, the Irish built their own prisons. And their leaders helped them to do it.
Just before the closing bell, the two men who sold the Irish people on the notion that they, the people, were responsible not merely for their own disastrous financial decisions but also for the ones made by their banks arrive in the chamber: Prime Minister Brian Cowen and Finance Minister Brian Lenihan. Along with the leader of the opposition, and the second in command of their own party, both are offspring of politicians who died in office: Irish politics is a family affair. Cowen happens also to have been the minister of finance from 2004 until mid-2008, when most of the bad stuff happened. He is not an obvious Leader of Men. His movements are sullen and lumbering, his face numbed by corpulence, his natural resting expression a look of confusion. One morning a few weeks before, he went on national radio sounding, to well-trained Irish ears, drunk. To my less trained ones he sounded merely groggy, but the public is in no mood to cut him a break. (Four different Irish people told me, on great authority, that Cowen had faxed Ireland’s 440-billion-euro bank guarantee into the European Central Bank from a pub.) And the truth is, if you were to design a human being to maximize the likelihood that people would assume he drank too much, you’d have a hard time doing better than the Irish prime minister. Lenihan, who follows on Cowen’s bovine heels, comes across, by comparison, as a decathlete in peak condition.
On this day, incredibly yet predictably, the Parliament decides not to hold a vote to fill three of the four empty seats. Then they adjourn, and I spend an hour with Joan Burton. Of the major parties in Ireland, Labour offers the closest thing to a dissenting opinion and a critique of Irish capitalism. As one of only 18 members of the Dáil who voted against guaranteeing the banks’ debts, Burton retains rare credibility. And in an hour of chatting about this and that, she strikes me as straight, bright, and basically good news. But her role in the Irish drama is as clear as Morgan Kelly’s: she’s the shrill mother no one listened to. She speaks in exclamation points with a whiny voice that gets on the nerves of every Irishman—to the point where her voice is parodied on national radio. When I ask her what she would do differently from what the Irish government is doing, even she is stumped. Like every other Irish politician, she is now at the mercy of forces beyond her control. The Irish bank debt is now Irish government debt, and any suggestion of default will only raise the cost of borrowing the foreign money they now can’t live without. “Do you know that Irish people are now experts on bonds?” says Burton. “Yes, they now say 100 basis points rather than 1 percent! They have developed a new vocabulary!”
As the scope of the Irish losses has grown clearer, private investors have been less and less willing to leave even overnight deposits in Irish banks and are completely uninterested in buying longer-term bonds. The European Central Bank has quietly filled the void: one of the most closely watched numbers in Europe has been the amount the E.C.B. has loaned to the Irish banks. In late 2007, when the markets were still suspending disbelief, the banks borrowed 6.5 billion euros. By December of 2008 the number had jumped to 45 billion. As Burton spoke to me, the number was still rising from a new high of 86 billion. That is, the Irish banks have borrowed 86 billion euros from the European Central Bank to repay private creditors. In September 2010 the last big chunk of money the Irish banks owed the bondholders, 26 billion euros, came due. Once the bondholders were paid off in full, a window of opportunity for the Irish government closed. A default of the banks now would be a default not to private investors but a bill presented directly to European governments. This, by the way, is why there are so many important-looking foreigners in Dublin, dining alone at night. They’re here to make sure someone gets his money back.
One measure of how completely the Irish can’t imagine offending their foreign financial rulers is how quickly Burton declines to contemplate such a default. She bears no responsibility for the banks’ private debts, and yet, when we creep up on the possibility of simply walking away from them, she veers off. Actually, she ups and leaves. “Oh, I have to go,” she says. “I have to meet the finance minister with the bad news.” Brian Lenihan has called a private meeting with the opposition, so that its leaders will be the first to hear of the Draconian new Irish budget. This meeting is held not inside the Parliament, where the media can be kept at arm’s length, but in a nearby building, where the media are allowed to congregate. “We tried to have it in here, but he moved it outside,” says Burton. “He’s taken to bringing us in to tell us the bad news first so that when we walk out we’re the ones announcing it to the media.” She smiles. “He’s tricky that way.”
Ireland’s Choice
Brian Lenihan is the last remaining Irish politician anywhere near power whose mere appearance does not cause people on the streets of Dublin to explode with either scorn or laughter. He came to the job just months before the crisis and so escapes blame for its origins. He’s a barrister, not a financial or real-estate person, with a proven ability to earn a good living without being bribed by property developers. He comes from a family of political people who are thought to have served honorably, or at any rate not used politics to enrich themselves. And in December 2009 he was diagnosed with pancreatic cancer. Anyone who has been anywhere near an Irish Catholic family knows the member who has had the most recent run of bad luck enjoys exalted status—the right to do pretty much whatever he wants, while everyone else squirms in silence. Since news of Lenihan’s illness broke—just days after he’d learned of it himself, rushing him into telling his children—he has minimized his suffering. Underlying the public-opinion polls that show the Irish feel a lot better about the minister of finance than they do about other politicians in his party is a common, unspoken understanding of his bravery.
Brian Lenihan is also, as Joan Burton points out, tricky. It’s racing up on eight in the evening when I meet him in a Department of Finance conference room. He has spent most of his day defending the harshest spending cuts and tax hikes in Irish history to Irish politicians, without offering any details about who, exactly, will pay for the banks’ losses. (He’s waiting to do that until after the single by-election the Dáil authorized is held.) He smiles. “Why is everyone so interested in Ireland?” he asks almost innocently. “There’s really far too much interest in us right now.”
“Because you’re interesting?” I say.
“Oh no,” he says seriously. “We’re not, really.”
He proceeds to make the collapse of the Irish economy as uninteresting as possible. This awkward social responsibility—normalizing a freak show—is now a meaningful part of the job of being Ireland’s finance minister. At just the moment the crazy uncle leapt from the cellar, the drunken aunt lurched through the front door and, in front of the entire family and many important guests, they carved each other to bits with hunting knives. Daddy must now reassure eyewitnesses that they didn’t see what they think they saw.
But the physical evidence that something deeply weird just happened in Ireland is still too conspicuous. A mile from the conference table where we take our seats is a moonscape of vast, two-year-old craters from which office parks were once meant to rise. There are fully finished skyscrapers that sit empty, water pooling on their lobby floors. There’s a skeleton of a tower, cranes resting on either side like parentheses, which was meant to house Anglo Irish Bank. There’s a city dump for which a developer paid 412 million euros in 2006—and which is now, when you include the cleanup costs, valued at zero. “Ireland is very unusual,” says William Newsom, who has more than 30 years of experience valuing commercial real estate for Savills in London. “There are whole swaths of either undeveloped land with planning permission or even partially developed sites which, I believe, for practical purposes have zero value.” The peak of the Irish madness is frozen in time, for all to see. There’s even an empty Starbucks, in the heart of what was meant to be a global financial center to rival London’s, where a carton of low-fat milk curdles beside a silver barista pitcher. The finance minister might as well be standing in Pompeii and saying that actually the volcano wasn’t really worth mentioning. Just a little lava!
“This isn’t Iceland” is what Lenihan actually says. “We’re not a hedge fund that’s populated by 300,000 farmers and fishermen. Ireland is not going back to the 80s or the 90s. This is all in a much narrower band.” And then he goes off on a soliloquy, the main point of which is: Ireland’s problems are solvable, and I am in control of the situation.
Back in September 2008, however, there was evidence that he wasn’t. On September 17 the financial markets were in turmoil. Lehman Brothers had failed two days earlier, shares of Irish banks were plummeting, and big corporations were withdrawing their deposits from them. Late that evening Lenihan phoned David McWilliams, a former senior European economist with UBS in Zurich and London, who had moved back home to Dublin and turned himself into a writer and media personality. McWilliams had been loudly skeptical about the Irish real-estate boom. Two weeks earlier he had appeared on a radio show with Lenihan, and Lenihan appeared to him entirely untroubled by the turmoil in the financial markets. Now he wanted to drive out to McWilliams’s house and ask his advice on what to do about the Irish banks.
The peculiar scene is described in McWilliams’s charmingly indiscreet book, Follow the Money. Lenihan arrives at the McWilliams residence, a 45-minute drive from Dublin, marches through to the family kitchen, and pulls a hunk of raw garlic out of his jacket pocket. “He kicked off by saying if his officials knew he was here in my house, there’d be war,” writes McWilliams. The finance minister stayed until two in the morning, drinking tea and anxiously picking McWilliams’s brain. McWilliams came away with the feeling that the minister didn’t entirely trust the advice he was getting from the people around him—and that he was not merely worried but confused. McWilliams told me that he sensed that the mental state of the Department of Finance was “complete chaos.”
A week later the department hired investment bankers from Merrill Lynch to advise it. Some might say that if you were asking Merrill Lynch for financial advice in 2008 you were already beyond hope, but that is not entirely fair. The bank analyst who had been most prescient and interesting about the Irish banks worked for Merrill Lynch. His name was Philip Ingram. In his late 20s, and a bit quirky—at the University of Cambridge he had studied zoology—Ingram had done something original and useful: he’d shined a new light on the way Irish banks lent against commercial real estate.
The commercial-real-estate loan market is generally less transparent than the market for home loans. Deals between bankers and property developers are one-offs, on terms unknown to all but a few insiders. The parties to any loan always claim it is prudent: a bank analyst has little choice but to take them at their word. But Ingram was skeptical of the Irish banks. He had read Morgan Kelly’s newspaper articles and even paid Kelly a visit in his university office. To Ingram’s eyes, there undoubtedly appeared to be a vast difference between what the Irish banks were saying and what was really happening. To get at it he ignored what they were saying and went looking for knowledgeable insiders in the commercial-property market. He interviewed them, as a journalist might. On March 13, 2008, six months before the Irish real-estate Ponzi scheme collapsed, Ingram published a report, in which he simply quoted verbatim what British market insiders had told him about various banks’ lending to commercial real estate. The Irish banks were making far riskier loans in Ireland than they were in Britain, but even in Britain, the report revealed, they were the nuttiest lenders around: in that category, Anglo Irish, Bank of Ireland, and A.I.B. came, in that order, first, second, and third.
For a few hours the Merrill Lynch report was the hottest read in the London financial markets, until Merrill Lynch retracted it. Merrill had been a lead underwriter of Anglo Irish’s bonds and the corporate broker to A.I.B.: they’d earned huge sums of money off the growth of Irish banking. Moments after Phil Ingram hit the Send button on his report, the Irish banks called their Merrill Lynch bankers and threatened to take their business elsewhere. The same executive from Anglo Irish who had called to scream at Morgan Kelly called a Merrill research analyst to scream some more. Ingram’s superiors at Merrill Lynch hauled him into meetings with in-house lawyers, who toned down the report’s pointed language and purged it of its damning quotes from market insiders, including its many references to Irish banks. And from that moment everything Ingram wrote about Irish banks was edited, and bowdlerized by Merrill Lynch’s lawyers. At the end of 2008, Merrill fired him. One of Ingram’s colleagues, a fellow named Ed Allchin, was also made to apologize to Merrill’s investment bankers individually for the trouble he’d caused them by suggesting there was still money to be made on shorting Irish banks.
It would have been difficult for Merrill Lynch’s investment bankers not to know, at some level, that in a reckless market the Irish banks had acted with a recklessness all their own. But in the seven-page memo to Brian Lenihan—for which the Irish taxpayer forked over to Merrill Lynch seven million euros—they kept whatever reservations they may have had to themselves. “All of the Irish banks are profitable and well capitalised,” wrote the Merrill Lynch advisers, who then went on to suggest that the banks’ problem wasn’t at all the bad loans they had made but the panic in the market. The Merrill Lynch memo listed a number of possible responses the Irish government might have to any run on Irish banks. It refrained from explicitly recommending one course of action over another, but its analysis of the problem implied that the most sensible thing to do was guarantee the banks. After all, the banks were fundamentally sound. Promise to eat all losses, and markets would quickly settle down—and the Irish banks would go back to being in perfectly good shape. As there would be no losses, the promise would be free.
What exactly was said in meetings on the night of September 29, 2008, remains, amazingly, something of a secret. The government has refused Freedom of Information Act-type requests for records. But gathered around the conference tables inside the prime minister’s offices was an array of top government and finance officials, including Lenihan, Cowen, the attorney general, and bank officials and regulators. Eventually they brought in the heads of the two yet-to-be-disgraced big Irish banks: A.I.B. and Bank of Ireland. Evidently they either lied to Brian Lenihan about the extent of their losses or didn’t know themselves what those were. Or both. “At the time they were all saying the same thing,” an Irish bank analyst tells me. “ ‘We don’t have any subprime.’ ” What they meant was that they had avoided lending to American subprime borrowers; what they neglected to mention was that, in the general frenzy, all of Ireland had become subprime. Otherwise sound Irish borrowers had been rendered unsound by the size of the loans they had taken out to buy inflated Irish property. That had been the strangest consequence of the Irish bubble: to throw a nation which had finally clawed its way out of centuries of indentured servitude back into it.
The report from Merrill Lynch, which touted the banks as fundamentally sound, buttressed whatever story they told the finance minister. Ireland’s financial regulator, Patrick Neary, had echoed Merrill’s judgment. Morgan Kelly was still viewed as a zany egghead; at any rate, no one who took him seriously was present in the room. Anglo Irish’s stock had fallen 46 percent that day; A.I.B.’s had fallen 17 percent; there was a fair chance that when the stock exchange reopened one or both of them would go out of business. In the general panic, absent government intervention, the other banks would have gone down, too. Lenihan faced a choice: Should he believe the people immediately around him or the financial markets? Should he trust the family or the experts? He stuck with the family. Ireland gave its promise. And the promise sank Ireland.
Even at the time, the decision seemed a bit odd. The Irish banks, like the big American banks, managed to persuade a lot of people that they were so intertwined with their economy that their failure would bring down a lot of other things, too. But they weren’t, at least not all of them. Anglo Irish Bank had only six branches in Ireland, no A.T.M.’s, and no organic relationship with Irish business except the property developers. It lent money to people to buy land and build: that’s practically all it did. It did this mainly with money it had borrowed from foreigners. It was not, by nature, systemic. It became so only when its losses were made everyone’s.
In any case, if the Irish wanted to save their banks, why not guarantee just the deposits? There’s a big difference between depositors and bondholders: depositors can flee. The immediate danger to the banks was that savers who had put money into them would take their money out, and the banks would be without funds. The investors who owned the roughly 80 billion euros of Irish bank bonds, on the other hand, were stuck. They couldn’t take their money out of the bank. And their 80 billion euros very nearly exactly covered the eventual losses inside the Irish banks. These private bondholders didn’t have any right to be made whole by the Irish government. The bondholders didn’t even expect to be made whole by the Irish government. Not long ago I spoke with a former senior Merrill Lynch bond trader who, on September 29, 2008, owned a pile of bonds in one of the Irish banks. He’d already tried to sell them back to the bank for 50 cents on the dollar—that is, he’d offered to take a huge loss, just to get out of them. On the morning of September 30 he awakened to find his bonds worth 100 cents on the dollar. The Irish government had guaranteed them! He couldn’t believe his luck. Across the financial markets this episode repeated itself. People who had made a private bet that went bad, and didn’t expect to be repaid in full, were handed their money back—from the Irish taxpayer.
In retrospect, now that the Irish bank losses are known to be world-historically huge, the decision to cover them appears not merely odd but suicidal. A handful of Irish bankers incurred debts they could never repay, of something like 100 billion euros. They may have had no idea what they were doing, but they did it all the same. Their debts were private—owed by them to investors around the world—and still the Irish people have undertaken to repay them as if they were obligations of the state. For two years they have labored under this impossible burden with scarcely a peep of protest. What’s more, all of the policy decisions since September 29, 2008, have set the hook more firmly inside the mouths of the Irish public. In January 2009 the Irish government nationalized Anglo Irish and its 34-billion-euro (and mounting) losses. In late 2009 they created the Irish version of the tarp program, but, unlike the U.S. government (which ended up buying stakes in the banks), they actually followed through on the plan and are in the process of buying 70 billion euros of crappy assets from the Irish banks.
A single decision sank Ireland, but when I ask Lenihan about it he becomes impatient, as if it isn’t a fit topic for conversation. It wasn’t much of a decision, he says, as he had no choice. The Irish financial markets are governed by rules rooted in English law, and under English law bondholders enjoy the same status as ordinary depositors. That is, it was against the law to protect the little people with deposits in the bank without also saving the big investors who owned Irish bank bonds.
This rings a bell. When U.S. Treasury secretary Hank Paulson realized that allowing Lehman Brothers to fail was viewed not as brave and principled but catastrophic, he, too, claimed he’d done what he’d done because the law gave him no other option. But in the heat of the crisis, Paulson had neglected to mention the law just as Lenihan didn’t bring up the law requiring him to pay off the banks’ private lenders until long after he’d done it. In both cases the explanation was legalistic: narrowly true, but generally false. The Irish government always had the power to impose losses on even the senior bondholders, if it wanted to. “Senior people have forgotten that the government has certain powers,” as Morgan Kelly puts it. “You can conscript people. You can send them off to certain death. You can change the law.”
On September 30, 2008, in the heat of the moment, Lenihan gave the same reason for guaranteeing the banks’ debts that Merrill Lynch had given him: to prevent “contagion.” Tell financial markets that a loan to an Irish bank was a loan to the Irish government and investors would calm down. For who would doubt the credit of the government? A year and a half later, when suspicions arose that the banks’ losses were so vast they might bankrupt the government, Lenihan offered a new reason for the government’s gift to private investors: the bonds were owned by Irishmen. Up until then the government’s line had been that they had no idea who owned the bank’s bonds. Now they said that, if the Irish government didn’t eat the losses, Irish credit unions and insurance companies would pay the price. The Irish, in other words, were simply saving the Irish. This wasn’t true, and it provoked a cry of outrage from the credit unions, which said that they owned hardly any of the bonds. A political investigative blog called Guido Fawkes somehow obtained a list of the Anglo Irish foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs. (Yes! Even the Irish did their bit for Goldman.)
Across Europe just now men who thought their title was “minister of finance” have woken up to the idea that their job is actually government bond salesman. The Irish bank losses have obviously bankrupted Ireland, but the Irish finance minister does not want to talk about that. Instead he mentions to me, several times, that Ireland is “fully funded” until next summer, which is to say that the Irish government has enough cash in the bank to pay its bills until next July. It isn’t until I’m on my way out the door that I realize how trivial this point is. The blunt truth is that, since September 2008, Ireland has been, every day, more at the mercy of her creditors. To remain afloat, Ireland’s biggest banks, which are now owned by the Irish government, have taken short-term loans from the European Central Bank amounting to 86 billion euros. Two weeks later Lenihan will be compelled by the European Union to invite the I.M.F. into Ireland, relinquish control of Irish finances, and accept a bailout package. The Irish public doesn’t yet know it, but, even as we sit together at his conference table, the European Central Bank has lost interest in lending to Irish banks. And soon Brian Lenihan will stand up in the Irish Parliament and offer a fourth explanation for why private investors in Ireland’s banks cannot be allowed to take losses. “There is simply no way that this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the E.C.B.,” he will say.
But there was once a time when the wishes of the E.C.B. didn’t matter to Ireland. That time was before the Irish government used E.C.B. money to pay off the foreign bondholders in Irish banks.
Bring Me a Little Ire
Once a decade I experiment with driving on the wrong side of the road, and wind up destroying dozens of side-view mirrors on cars parked on the left. When I went looking for some Irish person to drive me around, the result was a fellow I will call Ian McRory (he asked me not to use his real name in this article), who is Irish, and a driver, but pretty clearly a lot of other things, too. Ian has what appears to be a military-grade navigational system, for instance, and surprising knowledge about abstruse and secretive matters. “I do some personal security, and things of that nature,” he says, when I ask him what else he does other than drive financial-disaster tourists back and forth across Ireland, and leaves it at that. Later, when I mention the name of a formerly rich Irish property developer, he says, casually, as if it were all in a day’s work, that he had let himself into the fellow’s vacation house and snapped photographs of the interior, “for a man I know who is thinking of buying it.”
Ian turns out to have a good feel for what I, or anyone else, might find interesting in rural Ireland. He will say, for example, “Over there, that’s a pretty typical fairy ring,” and then explain, interestingly, that these circles of stones or mushrooms that occur in Irish fields are believed by local farmers to house mythical creatures. “Irish people actually believe in fairies?,” I ask, straining but failing to catch a glimpse of the typical fairy ring to which Ian has just pointed. “I mean, if you walked right up and asked him to his face, ‘Do you believe in fairies?’ most guys will deny it,” he replies. “But if you ask him to dig out the fairy ring on his property, he won’t do it. To my way of thinking, that’s believing.” And it is. It’s a tactical belief, a belief that exists because the upside to disbelief is too small, like the former Irish belief that Irish land prices would rise forever.
The highway out of Dublin runs past abandoned building sites and neighborhoods without people in them. “We can stop at ghost estates on the way,” says Ian, as we clear the suburbs of Dublin. “But if we stop at every one of them, we’ll never get out of here.”
We pass wet green fields carved by potato farmers into small plots, and every now and then a small village, but even the inhabited places feel desolate. The Irish countryside remains a place people flee. Among its drawbacks, from the outsider’s point of view, is the weather. “It’s always either raining or about to rain,” says Ian. “I drove a black guy from Africa around the country once. It’s raining the whole time. He says to me, ‘I don’t know why people live here. It’s like living under an elephant.’ ”
The wet hedgerows cultivated along the highway to hide the wet road from the wet houses now hide the wet houses from the wet road. picture of the village of the future, reads a dripping billboard with a picture of a village that will never be built. Randomly selecting a village that appears to be more or less finished, we pull off the road. It’s an exurb, without a suburb. GLEANN RIADA, reads the self-important sign in front. It’s a few dozen houses in a field, attached to nothing but each other, ending with unoccupied slabs of concrete buried in weeds. You can see the moment the money stopped flowing from the Irish banks, the developer folded his tent, and the Polish workers went home. “The guys who laid this didn’t even believe it was supposed to be finished,” says Ian. The concrete slab, like the completed houses, is riven by the kind of cracks you see in a house after a major earthquake, but in this case are caused by carelessness. Inside, the floors are littered with trash and debris, the fixtures have been ripped out of the kitchen, and mold spreads spider-like across the walls. The last time I saw an interior like this was in New Orleans after Katrina.
In October, Ireland’s Department of the Environment published its first audit of the country’s new housing stock after inspecting 2,846 housing developments, many of them called “ghost estates” because they’re empty. Of the nearly 180,000 units that had been granted planning permission, the audit found that only 78,195 were completed and occupied. Others are occupied but remain unfinished. Virtually all construction has now ceased. There aren’t enough people in Ireland to fill the new houses; there were never enough people in Ireland to fill the new houses. Ask Irish property developers who they imagined was going to live in the Irish countryside, and they all laugh the same uneasy laugh and offer up the same list of prospects: Poles; foreigners looking for second homes; entire departments of Irish government workers, who would be shipped to the sticks in a massive, planned relocation that somehow never materialized; the diaspora of 70 million human beings with a genetic link to Ireland. The problem that no one paid all that much attention to during the boom was that people from outside Ireland, even those with a genetic link to the place, have no interest in owning houses there. “This isn’t an international property market,” says an agent at Savills’s Dublin branch named Ronan O’Driscoll. “There aren’t any foreign buyers. There were never foreign buyers.” Dublin was never London. The Irish countryside will never be the Cotswolds.
Which way entire nations jumped when the money was made freely available to them obviously told you a lot about them: their desires, their constraints, their secret sense of themselves. How they reacted when the money was taken away was equally revealing. In Greece the money was borrowed by the state: the debts are the debts of the Greek people, but the people want no part of them. The Greeks already have taken to the streets, violently, and have been quick to find people other than themselves to blame for their problems: monks, Turks, foreign bankers. Greek anarchists now mail bombs to Angela Merkel and hurl Molotov cocktails at their own police. In Ireland the money was borrowed by a few banks, and yet the people seem not only willing to repay it but to do so without a peep of protest. Back in October 2008, after the government threatened to means-test for medical care, the old people marched in the streets of Dublin. A few days after I’d arrived the students followed suit, but their protest was less public anger than theater, and perhaps an excuse to skip school. (DOWN WITH THIS SORT OF THING, read one of the students’ signs.) I’d tapped two students as they stumbled away from the event to ask why they had all painted yellow streaks on their faces. They looked at each other for a beat. “Dunno!” one finally said and burst out laughing. Other than that … silence. It’s more than two years since the Irish government foisted the losses of the Irish banks on the Irish people, and in that time there have been only two conspicuous acts of social unrest. In May 2009, at A.I.B.’s first shareholder meeting after the collapse, a senior citizen hurled rotten eggs at the bank’s executives. And early one morning in September 2010, a 41-year-old property developer from Galway named Joe McNamara, who had painted his cement mixer with anti-banker slogans, climbed inside the cab, drove through Dublin, and, after cutting the brake lines, stalled the machine up against the gates of the Parliament. The elderly egg thrower was a distant memory, but McNamara was still, more or less, in the news: declining requests for interviews. “Joe is a private person,” his lawyer told me. “He feels like he’s made his point. He doesn’t want any media attention.”
Before he’d parked his cement mixer in the Parliament’s driveway, McNamara had been a small-time builder. He’d started out laying foundations, and like a lot of rural tradesmen, he’d been given a loan by the Anglo Irish Bank. Thus began his career as a property developer. He’d moved to Galway, into a tacky new development beside a golf course, but the real source of his financial distress lay an hour or so beyond the city, in a resort hotel he’d tried to build on a remote island called Achill, in the tiny village in which he’d grown up, called Keel. “Achill,” says Ian after I tell him that’s where I’d like to go, then goes silent for a minute, as if giving me time to reconsider. “This time of year Achill’s going to be fairly bleak.” He thinks another minute. “Mind you, in the summer it can be fairly bleak as well.”
It’s twilight as we roll across the tiny bridge and onto the island. On either side of the snaking single-lane road peat bogs stretch as far as the eye can see. The feel is less “tourist destination” than “end of the earth.” (“The next stop is Newfoundland,” says Ian.) The Achill Head Hotel—Joe’s first venture, still run by his ex-wife—was closed and dark. But there, smack in the middle of the tiny village of Keel, was the source of all of Joe McNamara’s financial troubles: a giant black hole, surrounded by bulldozers and building materials. He’d set out in 2005 to build a modest one-story hotel, with 12 rooms. In April 2006, with the Irish property market exploding, he’d expanded his ambition and applied for permission to build a multi-story luxury hotel. At exactly that moment, the market turned. “We went away in June of 2006,” Ronan O’Driscoll, the Savills broker, had told me. “We came back in September and everything had just stopped. How does everyone decide at once that it is time to stop—that it’s become mad?” For the past four years the hotel’s site had scarred the village. But it wasn’t until early 2010 that Anglo Irish Bank, which had lent McNamara the money to develop it, threatened to force him into receivership. Irish bankruptcy laws were not designed for spectacular failure, perhaps because the people who wrote them never imagined spectacular success. When a bank forces an Irish person into receivership, a notice is published in a national and a local newspaper—ensuring the bankrupt’s widespread shame. For as many as 12 years the person is not permitted to take out a loan for more than 650 euros without disclosing his bankruptcy status or own assets amounting to more than 3,100 euros, and part of whatever he earns may pass to his creditors at the discretion of the court. “It’s not like the United States, where being bankrupt is almost a badge of honor,” says Patrick White, of the Irish Property Council. “Here you are effectively disbarred from commercial life.”
There is an ancient rule of financial life—that if you owe the bank five million bucks the bank owns you, but if you owe the bank five billion bucks you own the bank—that newly applies to Ireland. The debts of its big property developers—now generally defined as anyone who owed the bank more than 20 million euros—are being worked out behind closed doors. In exchange for helping the government to manage or liquidate their real-estate portfolios, the biggest failures are hoping to be spared bankruptcy. Smaller developers, like McNamara, are in a far harder place, and while no one seems to know how many of these people exist, the number is clearly big.
Ireland’s National Asset Management Agency (its tarp) controls roughly 70 billion euros of commercial-property loans. It is believed that smaller Irish property-related loans amount to another 85 billion euros. Some very large number of Irish former tradesmen are in exactly Joe McNamara’s situation. Some very large number of Irish homeowners are in something very like it.
The difference between McNamara and everyone else is that he complained about it publicly. But then, apparently, thought better of it. I’d tracked down and phoned his ex-wife, who just laughed and told me to get lost. I finally reached McNamara himself, ambushing him on his cell phone. But he just muttered something about not wanting to draw further attention to himself, then hung up. It was only after I texted him to say I was en route to his hometown that he became sufficiently aroused to communicate. “What are you doing in Keel????” he hollered by text message, more than once. “Tell me Why are you going to Keel???” Then, once again, he fell silent. “The problem with the Irish people,” Ian says, as we drive away from the black hole that ruined Joe McNamara, “is that you can push them and push them and push them. But when they break they go wacko.” A month later, after a period of silence, McNamara would reappear, blasting the theme from The Good, the Bad and the Ugly from the top of a cherry-picker crane that he had parked, once again, in front of the Parliament.
Two things strike every Irish person when he comes to America, Irish friends tell me: the vastness of the country, and the seemingly endless desire of its people to talk about their personal problems. Two things strike an American when he comes to Ireland: how small it is and how tight-lipped. An Irish person with a personal problem takes it into a hole with him, like a squirrel with a nut before winter. He tortures himself and sometimes his loved ones too. What he doesn’t do, if he has suffered some reversal, is vent about it to the outside world. The famous Irish gift of gab is a cover for all the things they aren’t telling you.
So far as I could see, by November 10, 2010, the population of Irish people willing to make a stink about what has happened to them has been reduced to one: the elderly egg thrower. The next day we pull up outside his home, a modest old semi-detached house on the outskirts of Dublin. The cheery gentleman who opens the door in a neat burgundy sweater and well-pressed slacks has, among his other qualities, fantastically good manners. He has the ability to seem pleased even when total strangers ring his doorbell, and to make them feel welcome. On the table in Gary Keogh’s small and tidy dining room is a book, created by his grandchildren, dated May 2009, called “Granddad’s Eggcellent Adventure.”
In the months after Lenihan’s bank bailout, Keogh began to pay attention to the behavior of Irish bankers. His own shares in A.I.B., once thought to be as sound as cash or gold, were rapidly becoming worthless. But the bank’s executives exhibited not the first hint of remorse or shame. A.I.B. chairman Dermot Gleeson and C.E.O. Eugene Sheehy troubled Keogh the most. “The two of ’em stood up, time and again, and said, ‘Our bank is 100 percent sound,’ ” he says. “As if nothing at all was the matter!” He set out to learn more about these people in whom he had always placed blind trust. And what he found—high pay, corporate boondoggles—outraged him further. “The chairman paid himself 475,000 [euros] to chair 12 meetings!” Keogh still shouts.
What Keogh learned remains both the most shocking and the most familiar aspect of the Irish catastrophe: how easily ancient financial institutions abandoned their traditions and principles. An upstart bank, Anglo Irish, had entered their market and professed to have found a new and better way to be a banker. Anglo Irish made incredibly quick decisions: an Irish property developer who was an existing client could walk into its office in the late afternoon with a new idea and walk out with a commitment of hundreds of millions of euros that night. Anglo Irish was able to shovel money out its door so quickly because it had turned banking into a family affair: if they liked the man, they didn’t bother to evaluate his project.
Rather than point out the insanity of the approach, the two old Irish banks simply caved to it. An Irish businessman named Denis O’Brien sat on the board of the Bank of Ireland in 2005, when it was faced with the astonishing growth of Anglo Irish, which was about to double in size in just two years. “I remember the C.E.O. coming in and saying, ‘We’re going to grow at 30 percent a year,’ ” O’Brien tells me. “I said, How the fuck are you going to do that? Banking is a 5-to-7-percent-a-year-growth business at best.”
They did it by doing what Anglo Irish had done: writing checks to Irish property developers to buy Irish land at any price. A.I.B. even opened a unit dedicated to poaching Anglo’s biggest property-developer clients—the very people who would become the most spectacular busts in Irish history. In October 2008, the Irish Independent published a list of the five biggest real-estate deals in each of the past three years. A.I.B. lent the money for 6 of the 15, Anglo Irish for just 1, as a co-lender with A.I.B. On Irish national radio recently, the insolvent property developer Simon Kelly, whose family’s real-estate portfolio has run up bad debts of 2 billion euros, confessed that the only time in his career a banker became upset with him was when he repaid a loan, to Anglo Irish, with money borrowed from A.I.B. The former Anglo Irish executives I interviewed (off the record, as they are all in hiding) speak of their older, more respectable imitators with a kind of amazement. “Yes, we were out of control,” they say, in so many words. “But those guys were fucking nuts.”
Gary Keogh thought about how Ireland had changed from his youth, when the country was dirt-poor. “I used to collect bottles. Now the health service doesn’t even bother to take back crutches anymore? No! We’re far too wealthy.”
Unlike most people he knew, he had no debts. “I had nothing to lose,” he says. “I didn’t owe anyone any money. That’s why I could do it!” He’d also just recovered from a serious illness, and so, emotionally, felt a bit as if he were playing with house money. “I had just got a new kidney and I was very pleased with it,” he says. “But I think it must have been Che Guevara’s kidney.” He describes his elaborate plot the way an assassin might describe the perfect hit. “I only had two rotten eggs,” he says, “but by God they were rotten! Because I kept them six weeks in the garage!”
The A.I.B. shareholders’ meeting of May 2009 was the first he’d ever attended. He was, he admits, a bit worried something might go wrong. Worried that parking might be a problem, he took the bus; worried that his eggs might break, he used a container to protect them; worried that he didn’t even know what the room looked like, he left himself time to case the meeting hall. “I got to the front door early and had a little recce,” as he puts it, “just to see what was going to happen.” His egg container was too large to sneak inside, so he ditched it. “I had one egg in each jacket pocket,” he says. Worried that his eggs might be too slippery to grip and throw, he’d put Band-Aids on them. “I positioned myself four rows back and four seats in,” he says. “Not too close but not too far.” Then he waited for his moment.
It came immediately. Right after the executives took their places at the dais, a shareholder stood up, uninvited, with a point of order. Gleeson, A.I.B.’s chairman, barked, “Sit down!”
“He thought he was a dictator!” says Keogh, who had heard enough.
He rose to his feet and shouted, “I’ve listened to enough of your crap! You’re a fucking git!” And then he began firing.
“He thought he had been shot,” he says now with a little smile, “because the first egg hit the microphone and went POW!” It splattered onto the shoulder pad of Gleeson’s suit. The second egg missed the C.E.O. but nailed the A.I.B. sign behind him.
Then the security guards were on him. “I was told I would be arrested and charged, but I never was,” he says. Of course he wasn’t: this was at bottom a family dispute. The guards wanted to escort him out, but he left the place on his own and climbed aboard the next bus home. “The incident happened at 10 past 10 in the morning,” he says. “I was home by 10 to 11. At 10 past 11 the phone rang. And I was on the radio for an hour.” Then, but briefly, all was madness. “The press descended on the house and they wouldn’t get out,” he says. It didn’t really matter; he wasn’t sticking around. He’d done exactly what he’d planned to do, and saw no need to make a further fuss. He flew out of Dublin Airport at seven the next morning, for a long-planned Mediterranean cruise.
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Eurozone Break-Up
http://globalfire.tv
http://telegraph.co.uk/finance/financetopics/financialcrisis/8215358/Pimco-says-untenable-policies-will-lead-to-eurozone-break-up.html
20 Dec 2010
Greece, Ireland and Portugal cannot get back on their feet without either their own currency
Pimco says ‘untenable’ policies will lead to eurozone break-up
Pimco, the world’s largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course.
By Ambrose Evans-Pritchard
Andrew Bosomworth, head of Pimco’s portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro.
“Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments,” he told German newspaper Die Welt.
He said these countries could rejoin EMU “after an appropriate debt restructuring”, adding that devaluation would let them export their way back to health.
Mr Bosomworth said EU leaders were too quick to congratulate themselves on saving the euro last week with a deal for a permanent bail-out fund from 2013.
“The euro crisis is not over by a long shot. Market tensions will continue into 2011. The mechanism comes far too late,” he said.
The bond fund argues that the EU strategy of forcing heavily indebted countries to undergo draconian fiscal austerity without offsetting stimulus is unworkable.
The austerity policies are stifling the growth needed to stabilise debt levels.
“Can countries inside a fixed exchange-rate system like the euro grow and tighten budget policy at the same time? I don’t think so. It didn’t work in Argentina,” Mr Bosomworth said.
Pimco also gave warning that the bond vigilantes have lost faith in the policy and are trying to liquidate their holdings of peripheral EMU faster than the European Central Bank (ECB) can buy the debt, causing a relentless rise in yields, and a vicious circle.
Despite this, the ECB said on Monday that it had cut purchases of government debt last week, settling €603m (£509m), down from €2.68bn a week earlier. The withering comments from the world’s top investor in EMU sovereign debt is a blow for Portugal and Spain. Both nations are hoping bond spreads will start to narrow before they face a funding crunch in the first quarter of next year.
Jacques Cailloux, chief Europe economist at RBS, agreed that last week’s European summit had failed to grasp the nettle.
“None of the policy responses put in place in Europe since the start of the crisis provides a credible backstop to prevent further contagion,” Mr Cailloux said.
“We remain most concerned about an escalation of the sovereign debt crisis hitting larger economies in the euro area. Markets continue to underestimate the potential disruption via financial transmission channels that such an event could trigger.”
Meanwhile, Spain must cut harder and deeper to rein in its finances, the OECD has warned, calling for an overhaul of its labour laws and employment practices. Madrid is already in the midst of harsh austerity measures, but the influential Paris-based think-tank said more must be done. The Spanish economy should be able to shrink its budget deficit from 11pc of GDP last year to the 6pc target next year, the OECD believes.
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WikiLeaks Cables Reveal U.S. Sought to Retaliate Against Europe over Refusing to Allow Monsanto GM Crops
http://www.alternet.org
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JUAN GONZALEZ: U.S. diplomatic cables released by WikiLeaks reveal the Bush administration drew up ways to retaliate against Europe for refusing to use genetically modified seeds. In 2007, then-US ambassador to France Craig Stapleton was concerned about France’s decision to ban cultivation of genetically modified corn produced by biotech giant Monsanto. He also warned that a new French environmental review standard could spread anti-biotech policy across Europe.
In the leaked cable, Stapleton writes, “Europe is moving backwards not forwards on this issue with France playing a leading role, along with Austria, Italy and even the [European] Commission…Moving to retaliation will make clear that the current path has real costs to EU interests and could help strengthen European pro-biotech voice.”
AMY GOODMAN: Ambassador Stapleton goes on to write, “Country team Paris recommends that we calibrate a target retaliation list that causes some pain across the EU since this is a collective responsibility, but that also focuses in part on the worst culprits. The list should be measured rather than vicious and must be sustainable over the long term, since we should not expect an early victory,” he wrote.
Well, for more, we’re going to Iowa City to speak with Jeffrey Smith, executive director of the Institute for Responsible Technology, author of two books, Seeds of Deception: Exposing Industry and Government Lies about the Safety of the Genetically Engineered Foods You’re Eating and the book Genetic Roulette: The Documented Health Risks of Genetically Engineered Foods.
Jeffrey Smith, talk about the significance of these documents leaked by WikiLeaks.
JEFFREY SMITH: Well, we’ve been saying for years that the United States government is joined at the hip with Monsanto and pushing GMOs as part of Monsanto’s agenda on the rest of the world. This lays bare the mechanics of that effort. We have Craig Stapleton, the former ambassador to France, specifically asking the U.S. government to retaliate and cause some harm throughout the European Union. And then, two years later, in 2009, we have a cable from the ambassador to Spain from the United States asking for intervention there, asking the government to help formulate a biotech strategy and support the government—members of the government in Spain that want to promote GMOs, as well. And here, they specifically indicate that they sat with the director of Monsanto for the region and got briefed by him about the politics of the region and created strategies with him to promote the GMO agenda.
JUAN GONZALEZ: Now, they apparently were especially interested in one Monsanto product, MON 810. Could you talk about that?
JEFFREY SMITH: Yes. This is the first seed that was approved for widespread planting. You see, the biotech industry was concerned initially about the European Union accepting genetically modified foods. Although that had been approved for years by the commission, the food industry had rejected it because consumers were concerned. And so, there hasn’t been a lot of food going to the European Union that’s genetically modified.
However, they had planned to allow the growing of genetically modified seeds. Now that MON 810 has been allowed, individual countries have stepped forward to ban in. And so, in 2007, they were concerned about that, and so they were trying to create a strategy to force these countries to accept the first of the genetically modified seeds. Since then, there’s been more evidence showing that this genetically modified corn damages mice and rats, etc., can cause reductions of fertility, smaller litter sizes, smaller offspring, immune responses, etc. And these have gone largely ignored by both the European Food Safety Authority and the United States FDA.
AMY GOODMAN: Talk about these health effects. Jeffrey Smith, you wrote a fascinating “Anniversary of a Whistleblowing Hero” piece about a British scientist and about the repercussions he suffered. He was one of the biggest GMO advocates. And explain what happened and what he actually learned.
JEFFREY SMITH: Well, Dr. Arpad Pusztai was actually working on a $3 million grant from the U.K. government to figure out how to test for the safety of GMOs. And what he discovered quite accidentally is that genetically modified organisms are inherently unsafe. Within 10 days, his supposedly harmless GMO potatoes caused massive damage to rats—smaller brains, livers and testicles, partial atrophy of the liver, damaged immune system, etc. And what he discovered was it was the process, the generic process of genetic engineering, that was likely the cause of the problem. He went public with his concerns and was a hero.
AMY GOODMAN: Jeffrey Smith, if you could explain this. This is very significant, because he was an expert on the protein that was—it’s this kind of insecticide. And everyone thought, oh, that might be the thing that would hurt people. But he said, actually, it wasn’t that.
JEFFREY SMITH: Exactly. You see, he was testing with rats that were eating the genetically modified potato, engineered to produce an insecticidal protein. But he also tested other groups of rats that were eating natural potatoes that were spiked with that same protein, and then a third group that was just eating natural potatoes without the insecticide. Only the group that ate the genetically engineered potato got these problems, not the group that was eating the potatoes along with the insecticide. So it clearly wasn’t the insecticide; it was somehow the process of genetic engineering.
Now, that process creates massive collateral damage inside the DNA of the plant. Hundreds and thousands of mutations can be formed. There could be hundreds or thousands of genes that are natural genes in the plant that change their levels of expression. For example, with MON 810 corn, they found that there was a gene that is normally silent that is switched on and now creates an allergen in corn. They found 43 different genes that were significantly up-regulated or down-regulated, meaning that there’s massive changes in these crops and they’re not being evaluated by the U.S.—by the FDA or any other regulatory authority around the world before being put onto the market.
JUAN GONZALEZ: Now, was there any indication from the cables or from your research that the pressure that Ambassador Stapleton and other U.S. officials were putting on the E.U. had the desired effect? Because former Ambassador Stapleton, was not just any former ambassador, he was the former co-owner of the Texas Rangers with former President George W. Bush.
JEFFREY SMITH: Well, we’ve seen a consistent effort by the U.S. to bully Europe. But, you see, the European mind on this is kind of divided. Some countries are clearly in the camp of precautionary principle and protecting interests for health. Others are basically moving in lockstep with the U.S. government and Monsanto. So it’s a fiercely pitched battle on every front in Europe.
A lot of the focus of the State Department has been on developing countries. They try and push GMOs into Africa. They deployed the Secretary of State’s chief advisory—scientific adviser, Nina Fedoroff, to Australia and to India. They tried to engage the Indian government with a contract or a treaty that would allow their scientists to be trained in the U.S. So they’ve been working around the world to try and influence policy on every single continent. And in some cases, they’re actually winning, where they’re overtaking the regulatory authorities and making it quite weak, like it is in the U.S. And in some cases in Europe now, there’s more resistance than ever, now that it’s “not in my backyard” politics, “no planting in my country” type of politics.
AMY GOODMAN: Jeffrey Smith, can you compare the Obama administration on biotechnology with the Bush administration?
JEFFREY SMITH: Unfortunately, we were hoping for a lot more success. President Obama, while he was campaigning here in Iowa, promised that he would require labeling of genetically modified crops. And since most Americans say they would avoid GMOs if labeled, that would have eliminated it from the food supply. But, you see, he and the FDA have been promoting the biotechnology. And unfortunately, the Obama administration has not been better than the Bush administration, possibly worse.
For example, the person who was in charge of FDA policy in 1992, Monsanto’s former attorney, Michael Taylor, he allowed GMOs on the market without any safety studies and without labeling, and the policy claimed that the agency was not aware of any information showing that GMOs were significantly different. Seven years later, because of a lawsuit, 44,000 secret internal FDA memos revealed that that policy was a lie. Not only were the scientists at the FDA aware that GMOs were different, they had warned repeatedly that they might create allergies, toxins, new diseases and nutritional problems. But they were ignored, and their warnings were even denied, and the policy went forth allowing the deployment GMOs into the food supply with virtually no safety studies. That person in charge is now the U.S. food safety czar in the Obama administration.
JUAN GONZALEZ: And what is your general assessment of the sweeping reform that the Obama administration pushed through of the FDA, considered one of the biggest reforms of that agency in decades? Your assessment of it?
JEFFREY SMITH: Well, if the FDA were absolutely dedicated to protecting public health, giving them more power makes sense. But investigation after investigation for years, it turns out that they often serve their “clients,” which is industry. Even one-third of their own surveyed members in September revealed that they believe that corporate and special interests really dictates policy in the area of public health. So, my opinion is, giving them more power without first eliminating that bias towards corporations is a dangerous formula. In fact, they are officially mandated with promoting the biotech industry, which is obviously a conflict of interest.
AMY GOODMAN: I know both Eric Schlosser and also Michael Pollan have hailed the food safety legislation, but on the issue of talking to the State Department and what they’re pushing abroad, I want to just say we did call the State Department and did not get a response. We wanted them to come on today’s broadcast.
Finally, Agriculture Secretary Tom Vilsack, Jeffrey Smith, your assessment?
JEFFREY SMITH: Well, he was our governor here in Iowa, and he was the biotech governor of the year in 2001. And unfortunately, he’s been following that course of action since he has been put in office. They released today the environmental impact statement for alfalfa, where they ignore their own data regarding the increase of pesticides because of GMOs. They ignore the data of their own scientists and other scientists, which show the use of Roundup, which will be promoted through this Roundup Ready alfalfa, is actually very toxic both for the environment and for human health. And so, he, as well as many others of the Obama administration, have been taken essentially from the biotech ranks and are now calling the shots there. And I’m very disappointed.
There was some indication in the EIS, however, for the alfalfa that he might take into consideration concerns about contamination, which we all know is permanent, where the self-propagating genetic pollution of genetically modified foods can outlast the effects of global warming and nuclear waste. It’s being released now without—with very little concern. Finally, we see some ray of light, where they’re actually paying attention, but it’s not enough. It’s not based really on science.
The UN Mission in Haiti
| http://www.globalresearch.ca
OAS official Ricardo Seitenfus speaks out
by Gearóid Ó Colmáin
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Global Research, December 26, 2010
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The Special Representative for the Organisation of American States Ricardo Seitenfus was relieved of his duties 24 hours after he gave a candid interview to the Swiss newspaper Le Temps on Monday December 20th in which he lambasted the UN occupation of Haiti.
In an interview with the Swiss paper Le temps (December 20th 2010), Ricardo Seitenfus, blamed international capitalism for the ills of Haiti. Referring to Haiti’s 200 year national liberation struggle the Brazilian born academic said: “The original sin of Haiti on the international scene was its liberation. Haitians committed an unacceptable crime in 1804: a crime of lesé-majesté for a troubled world. The West was a world of colonialism, slavery and racism whose wealth was based on the exploitation of conquered lands. So the Haitian revolutionary model scared superpowers. The United States did not recognize Haiti’s independence until 1865. And France required payment of a ransom to accept this release. From the beginning, independence was compromised and hampered the development of the country. The world has never known how to deal with Haiti, so it ended up ignoring it. This led to two hundred years of solitude for Haiti on the international stage. Today, the UN has blindly applied Chapter 7 of its charter; it deploys its troops to impose its peace operation. It is solving nothing, and even making things worse. We want to make Haiti a capitalist country, an export platform for the U.S. market. It is absurd.” In 2004 Jean Bertrand Aristide was removed from office after a coup organised by the governments of France, the United States and Canada. Aristide’s Fanmi Lavalas party enjoyed overwhelming support among Haiti’s poor population. Aristide’s emphasis on social justice, equality and participative democracy threatened the interests of the financial and political elites of the developed world whose conception of democracy involves private control by multinational corporations over all means of production, education and health.
According to Seitenfus, Haiti’s tragedy has always been its proximity to the USA, who have ruthlessly oppressed the island in the pursuit of their own economic interests. Seitenfus went on to denounce the role of NGOS in Haiti stating that many NGOs behaved more like businessmen than humanitarian workers and were using Haiti as a laboratory to test out new technologies and recruiting young people with neither experience nor knowledge of the Haitian people. Seitenfus lamented that fact that Haitian doctors trained in Cuba were emigrating to the United States, Canada and France rather than staying in their own country to help the poor. Seitenfus also criticised the attempt by the ‘international community’ to keep Haiti dependent on aid, citing fair trade and sustainable local agriculture as well as a tourism industry based on respect for Haitian identity and culture as the way in which the country should be developed. Speaking about his experience in Haiti Mr Seitenfus said:
Approximately 24 hours after this interview Mr. Seitenfus was no longer the Special Representative of the Organisation of American States. Speaking the truth about Haiti cost him his job. But Mr. Seitenfus can take comfort in the knowledge that he spoke up for the people of Haiti when others were too greedy, too cowardly or too indifferent to do so. Setenfus referred to Haiti’s geographical misfortune, being so close to the USA. This is indeed true, but Europe’s role in Haiti’s misery has been no less destructive than that played by the United States. There is a common conception in Europe that the problem in the world today is the United States, that if the European Union were to be sufficiently centralized, it could play a more constructive role in the world, providing a balance to US global hegemony. Nothing could be further from the truth. The EU is every bit as cruel, corrupt and despotic as the United States of America. Every time the subject of Haiti is mentioned in French media, maudlin pity and condescension infuse the mendacious discourse. The French media have never honestly acknowledged France’s direct role in the destruction of Haiti from their support for the Duvalier dictatorships in the Cold War to the kidnapping of the democratically elected president Jean Bertrand Aristide in 2004. Nor have the French media ever reported on the atrocities committed by the MINUSTAH UN troops currently occupying the island, against the wishes of the population. The European Union has arrogated to itself the role of international arbiter in matters concerning democracy, sending out anonymous delegates to other countries to judge their political systems in terms of ‘human rights’ and ‘democracy’. In 2003, the European Union worked with Initiative de la Societé Civile, an offshoot of Group of 184, headed by André Apaid, an American sweat shop owner with an impressive record on ‘human rights’. The European Union gave Apaid’s ‘civil society’ organisation 773,000 Euro. According to the Centre for the Study of Human Rights, Apaid paid Thomas “Labanye” Robinson to murder members of the Fanmi Lavalas party. Apaid’s opposition to Jean Bertrand Aristide intensified when he doubled the minimum wage of workers in Haiti. Raising the wages of the world’s poorest workers is clearly a ‘human rights’ violation in the eyes of the EU and the USA! In the elections in December 2010, approved by the US and the EU, the country’s most popular party Fanmi Lavalas was banned from participation. In other words, the European Union and the United States advocated the exclusion of the majority of Haitian citizens from the democratic process. Until such a time as the rebellious slums of Haiti realize what the rich countries mean by ‘democracy’ and ‘human rights’ UN troops will patrol the streets of Port Au Prince keeping, in the words of Mr. Seitenfus, ‘the peace of the cemetery’.
Gearóid Ó Colmáin is a columnist in English and Gaelic with Metro Éireann, Ireland’s multicultural newspaper. His blog is at www.metrogael.blogspot.com . He can be contacted at gaelmetro@yahoo.ie. |
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Gearóid Ó Colmáin is a frequent contributor to Global Research. Global Research Articles by Gearóid Ó Colmáin
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The Daily Bail ………
« Rothschild Bank AND Goldman Sachs Are Both On The LIST Of Bondholders Getting U.S. Taxpayer Billions In Irish Bailout »
Complete list of bondholders inside, and BBC footage of Sir Eveylyn de Rothschild. The deceased Guy de Rothschild, pictured, no longer exploits the masses for banking profit, but his progeny carry on his legacy effectively.
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Scroll down for VIDEO of Sir Evelyn de Rothschild…
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U.S. taxpayers finance approximately 20% of the IMF’s budget.
Guess what, Ireland. Brian Lenihan and Brian Cowen just sold you down the IMF river. Why? To bail out bank bondholders and giant European banks. Of course! That’s what governments are for these days, apparently. And they’ll tell you that the bailout policy is all for you own good. And for little old ladies and pensioners and orphans. Just don’t tell that to the cancer patients.
Yep, another nation made IMF debt slaves on behalf of the international banking cartels. And Goldman Sachs and Rothschild & Compagnie are on the list.
Check it out below — Guido Fawkes’ blog has acquired the list of Anglo-Irish Bank’s bondholders.
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Anglo-Irish Bank did not represent a systemic risk to the Irish economy, it wasn’t a high street bank like AIB or the Bank of Ireland. If it had been allowed to go the way of Lehmans the only losers would have been shareholders and bondholders. The Irish state stepped in and nationalised a bank that was basically run by crooks lending to property speculators.
- The Irish people are taking losses that should rightly have been shouldered by bondholders.
Every child in Ireland is being bequeathed a huge debt at birth to protect the interests of foreign, mainly German, bondholders – why? Guido was once a bond trader, it was always understood that sometimes the bond issuer defaults.
- That is the risk investors take.
So why is Dublin’s political establishment so keen to protect foreign investors at the expense of future generations? Guido has obtained the list of foreign Anglo-Irish bondholders as at the close of business tonight. These are the people whom Dublin’s politicians really seem to care about:

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Great analysis of the list from the Golem XIV…
Of the 80 listed companies only 7 listed pensions and being a cooperative savings institution. Of those only 4 listed churches and unions as their clients, the others could well have been big pension funds. The churches and unions in question were in Germany not Ireland. Those seven companies are amongst the smallest of Anglo Irish’s bond holders. I only have figures for four of the seven. The largest, Union Investments of Germany, has a mere €165 billion in assets under management.
The total assets under management which I was able to compile from publicly available figures is €20,871,150,000,000. That is an underestimate because the bond holders who turn out to be Private and Swiss banks don’t publish any figures. So Anglo Irish’s ‘bond holders’ hold and invest MORE than 20.8 trillion euros. Guido lists those bond holders as holding between them 4 Billion euros in Anglo Irish bonds.
Now, in my opinion both figures are likely to be wrong. Certainly my figure is a large underestimate. But taking them at face value Anglo Irish would account for one 5000th of the total assets being managed by all the bond holders. So would even a total default by Anglo Irish cause that much, let alone systemic, pain and risk? Why are the ‘Bond holders’ and the Irish government so concerned that the Irish people be forced to take the loss and pay the debts for them?
Now lets look at the other side of the equation, at Ireland itself. Well Ireland’s GDP before the crash, in 2008, was … drum roll please… €207 billion. Or 0.207 trillion.
SO…. on one side we have Ireland whose bond holders, its people, have between them a total GDP wealth of 0.207 trillion euros. Who are being FORCED, against their will, to pay Anglo Irish bank’s debts to its bond holders, who between them hold 20.8 Trillion euros. The people of Ireland are paying to, and protecting the wealth and power of, people who have 100 times more wealth!
So where do these wealthy bond holders live and work?
Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.
France is next with 10 bond holders. Who have about 4 trillion to keep them warm.
Britain is third with 9 who have around 3 trillion.
The Swiss have 6 but who have about 8.5 trillion.
America has only three and hold only a trillion.
Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.
All these figures are very rough. The figure for Switzerland is certainly under because Private Swiss banks just don’t publish figures. What we can say for sure, figures or no figures, is these are not banks investing widow’s pensions or orphan’s pennies.
So who are they? Well many of the bond holders are privately held banks, which list their activities as asset management for off-shore, non-resident and high value individuals. To give you an example, one of the private banks is EFG Bank of Luxembourg. EFG stands for European Financial Group which is the third largest private bank group in Switzerland. It manages over €7.5 trillion in assets. It is ‘mostly’, 40%, owned by Mr Spiro Latsis, son of a Greek shipping magnate. He also owns 30% of Hellenic Petroleum. His personal fortune is estimated to be about $9 Billion.
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DB here. Blasphemous rape of a nation in order to reward billionaire bondholders who were reckless investors and malignant in oversight.
Video – Text from Youtube page – Sir EVELYN DE ROTHSCHILD talks about the global financial crisis to the BBC in October 2008…
In 2003, following the retirement of Sir Evelyn de Rothschild as head of N M Rothschild & Sons of London, the English and French firms merged to become one umbrella entity called “Group Rothschild.” Ownership was shared equally between the French and English branches of the family under the leadership of David de Rothschild. In 2007, the English branch sold their share to the French branch. The French branch now fully own N M Rothschild & Sons.
Related stories:
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European Students Fight Governments and Banks Photos
Pics from the student riots ,that took place all over Europe !
‘The Euro Game Is Up! Who the hell do you think you are?’ – Nigel Farage MEP
i.m.h.o.:
Farage is the Man of the Hour in Europe .
European governments must provide justice for victims of CIA programmes
http://www.amnesty.org
15 November 2010

All rendition victims interviewedsaid that they were tortured or ill-treated in custody© Nancy Ross/iStockphoto
Amnesty International has called on European governments to provide justice for the victims of the CIA’s unlawful rendition and secret detention programmes which led to the enforced disappearance, torture and ill-treatment of a number of people.
Amnesty International’s report published today, Open secret: Mounting evidence of Europe’s complicity in rendition and secret detention compiles the latest evidence of European countries’ complicity in the CIA’s programmes in the context of the fight against terrorism in the aftermath of the 11 September 2001 attacks in the USA.
“The EU has utterly failed to hold member states accountable for the abuses they’ve committed,” said Nicolas Beger, Director of Amnesty International’s European Institutions Office.
“These abuses occurred on European soil. We simply can’t allow Europe to join the US in becoming an ‘accountability-free’ zone. The tide is slowly turning with some countries starting investigations but much more needs to be done.”
A number of individuals have been subjected to enforced disappearance, including in secret CIA detention, and the whereabouts of some remain unknown. Every one of the rendition victims interviewed by Amnesty International has said they were tortured or otherwise ill-treated in custody.
“No one should escape responsibility for the unlawful transfer, enforced disappearances, torture, and secret detention which occurred in the context of these CIA-led operations. National governments have a legal obligation to ensure their full accountability for such violations,” said Nicolas Beger.
Intergovernmental organizations such as the Council of Europe, the European Union and the UN have been at the forefront of investigating human rights violations associated with the CIA rendition and secret detention programmes.
Following disclosures in their reports, inquiries into state complicity or legal processes aimed at individual responsibility took place or are currently in progress in countries such as Germany, Italy, Lithuania, Macedonia, Poland, Romania, Sweden and the United Kingdom.
“There is progress in a number of European countries toward accountability. The momentum must not be lost. The too often repeated mantra of ‘need for state secrecy in order to protect national security’ must not be used as a screen for impunity,” Nicolas Beger said.
Which countries did what?
Germany was complicit in the secret detention of Muhammad Zammar, interrogated by German agents while held in secret detention in Syria in November 2002. Germans officials acknowledged that torture occurred in Syrian prisons. He has yet to receive justice, despite a German parliamentary inquiry into his and others’ claims of abuse.
Italy has convicted US and Italian agents for their involvement in the February 2003 abduction of Abu Omar in Milan. He was then unlawfully sent to Egypt where he was held in secret and allegedly tortured. But the cases against high-level US and Italian officials were dismissed on the basis of state secrecy and diplomatic immunity. The prosecutor has appealed against those dismissals while Italian claims of the need to protect ‘state secrets’ continue to obstruct justice.
Lithuania has admitted that two secret prisons existed. The prisons were visited in June 2010 by a delegation from the European Committee for the Prevention of Torture, the first visit by an independent monitoring body to a secret CIA prison in Europe. An on-going criminal investigation must ensure that those responsible are held accountable.
Macedonia is alleged to have assisted in the unlawful detention and subsequent CIA-led rendition to Afghanistan of German national Khaled el-Masri, who has taken the against Macedonia before the European Court of Human Rights: the first time this court is likely to consider a case involving a Council of Europe member state’s alleged complicity in the CIA programmes. Macedonia continues to deny that its agents acted unlawfully.
Poland’s Border Guard Office in July 2010 revealed that seven planes, many carrying passengers, operating in the CIA’s rendition programme landed at Szymany airport, near the alleged site of a secret prison at Stare Kiejkuty. In September, the prosecutor’s office confirmed it was investigating claims by Abd al-Rahim al-Nashiri, that he was held in secret in Poland. He was granted ‘victim’ status in October 2010, the first time a rendition victim’s claims have been acknowledged in this context.
Romania is alleged to have hosted a secret CIA prison. It totally denies responsibility despite fresh evidence of its involvement in the rendition programme.
Sweden is charged with failing to investigate fully the renditions at the hands of the CIA in December 2001 of Ahmed Agiza and Mohammed al-Zari to Egypt, where the men reported that they were tortured. Despite having awarded the men compensation, the government has also failed to provide the men with full and effective redress.
The UK announced in July 2010 that it would establish an inquiry into the involvement of British officials in the alleged mistreatment of individuals detained abroad by foreign intelligence services. The Government has also acknowledged that the US used British territory for rendition flights.
Europe: Open Secret: Mounting Evidence of Europe’s Complicity in Rendition and Secret Detention
Index Number: EUR 01/023/2010
Date Published: 15 November 2010
Categories: Europe And Central Asia
Europe: Open secret: Mounting evidence of Europe’s complicity in rendition and secret detention: Executive Summary
Index Number: EUR 01/024/2010
Date Published: 15 November 2010
Categories: Europe And Central Asia
This document is the executive summary of a report in which Amnesty International focuses on the “state-of-play” with respect to accountability for European states’ complicity in the abusive practices of rendition and secret detention. The report documents key developments in Germany, Italy, Lithuania, Macedonia, Poland, Romania, Sweden, and the United Kingdom – countries where inquiries into state complicity or legal processes aimed at individual criminal responsibility have occurred or are currently in process.
This document is also available in:
Arabic:
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France’s Sarkozy: We’ll Crack Down on Protests
http://www.sott.net
The Associated Press
Tue, 19 Oct 2010 05:43 CDT
He also says blockages of oil refineries that have sparked gas shortages “cannot exist in a democracy” where “there are people who want to work.”
He insists it’s his “duty” to pass pension reform, despite nationwide strikes and violent protests.
Sarkozy says demographics and people’s increasing life expectancy have made raising the retirement age from 60 to 62 a necessity and stressed that other European nations have already made similar changes.
Sarkozy was speaking Tuesday at a press conference in the French city of Deauville with the leaders of Russia and Germany.
THIS IS A BREAKING NEWS UPDATE.
Check back soon for further information. AP’s earlier story is below.
Paris – Some airliners steered clear of France and police clashed with stone-throwing youths Tuesday as a new round of nationwide strikes and protests over a bill raising the retirement age to 62 kicked off.
Workers in sectors across the French economy joined in one-day strikes Tuesday after a week of disruptions by protesting oil refinery workers, students and employees of the SNCF national railway operator. More than 200 protests are planned around the country Tuesday.
It was the sixth national day of demonstrations over the planned pension reform since early September. Union leaders have vowed to keep up the pressure until the government scraps the unpopular plan, saying retirement at 60 is a fundamental social right that past generations fought hard to achieve.
President Nicolas Sarkozy says it must go through to save France’s generous but money-losing pension system. The protests in France come as countries across Europe are cutting spending and raising taxes to bring down record deficits and debts from the worst recession in 70 years.
The Paris airport authority warned on its website and in signs at the airports: “Strike on Oct. 19. Serious difficulties expected in access to airports and air traffic.”
France’s DGAC civil aviation authority said up to half of flights Tuesday out of Paris’ Orly airport would be scrapped, and 30 percent of flights out of other French airports, including the country’s largest, Charles de Gaulle, serving Paris, would be canceled.
Most cancellations were expected on short- and medium-haul domestic and inter-European flights. The walkout by air traffic controllers was expected to last one day, with flights expected to return to normal on Wednesday.
Strikes by oil refinery workers have been ongoing, sparking fuel shortages that forced at least 1,000 gas stations to be shuttered. Others saw large crowds. At an Esso station on the southeast edge of Paris on Tuesday morning, the line snaked along a city block and some drivers stood with canisters to stock gasoline in case of shortages.
Truckers have joined the protest, running so-called “escargot” operations in which they drive at a snail’s pace on highways. On Tuesday, about 20 truckers blocked an oil depot in Nanterre west of Paris operated by oil giant Total, turning away fellow truckers coming to fill up with gasoline. Police stood by but did not intervene.
“If they (the government) continue, we won’t have any choice (but to continue),” said Jorge Goncalves, a trucker with the CFDT union blocking the Nanterre depot. “Today the government is stubborn. And how do you deal with stubborn people? You don’t let go,”
Students entered the fray last week, blockading high schools around the country and staging protests that have occasionally degenerated into clashes with police.
Across the country, 379 high schools were blocked or disrupted Tuesday to varying degrees – the highest figure so far in the student movement against the retirement reform, according to the Education Ministry.
At a high school in the Paris suburb of Nanterre closed because of earlier violence, a few hundred youths and nearly as many police gathered Tuesday morning.
The teens started throwing stones from a bridge, and police responded with tear gas and barricaded the area. It was not immediately clear if there were injuries or arrests. Nanterre has often seen student protests in past years.
In the Nanterre clashes, youths knocked an Associated Press photographer off his motorbike and kicked and punched him as they rampaged down a street adjacent to the school.
Justice Minister Michele Alliot-Marie pledged on Europe-1 radio Tuesday to stay firm against “troublemakers” on the margins of the protest movement.
The head of the UNEF student union, Jean-Baptiste Prevost, countered that students “have no other solution but to continue.”
“Every time the government is firm, there are more people in the street,” he told i-tele news channel, predicting a large turnout for Tuesday’s street marches.With disruptions on the national railway entering their eighth consecutive day Tuesday, many commuters’ patience was beginning to wear thin. Only about one in two trains were running on some of the Paris Metro lines, and commuters had to elbow their way onto packed trains.
At Paris’ Gare Saint Lazare, which serves the French capital’s western suburbs and the northwestern Normandy and Brittany regions, commuters waited on crowded platforms for their trains. Only about half of regularly scheduled trains were running out of the station Tuesday.
Caroline Mesnard, a 29-year-old teacher said she expected her commute to take about twice as long as usual – as it has since last Tuesday’s start of the open-ended strike on France’s trains.
“All I can say is that after eight days, it’s beginning to get a bit tiresome,” said Mesnard. “I’m really tired, but there’s nothing to be done but hang on and wait for this to end.”
In the Mediterranean port city of Marseille, strikes by garbage collectors have left heaps of rubbish piled along city sidewalks. But still, the piles of rotting garbage don’t appear to have diminished labor union support in a city that has long had an activist reputation.
“Transport, the rubbish, the nurses, the teachers, the workers, the white collar, everyone who works, we should all be united. If there is no transport today, we’re not all going to die from it,” said 55-year-old resident Francoise Michelle.
Sarkozy has stressed that 62 is among the lowest retirement ages in Europe, the French are living much longer and the pension system is losing money.
“This reform is essential, France is committed to it, and France will carry it out,” Sarkozy said Monday in the Normandy beach resort of Deauville.
The measure is expected to pass a vote in the Senate this week. Slated to take place on Wednesday, it’s been push back until Thursday so lawmakers have the time to examine hundreds of amendments brought by opposition Socialists and others.
A Surprise Boost for Euro from China
| http://www.voltairenet.orgby F. William Engdahl*
The embattled Euro has gotten a surprise boost from an unexpected quarter―China. The country with the world’s largest foreign exchange currency reserves, China, has pledged to support Greek debt as well as the Euro in what is clearly a geopolitical decision. In doing so, China has signaled it seeks to prevent the US financial warfare attack on Europe and to play the EU off against the USA in a geopolitical chess game of a fascinating dimension. |
6 October 2010 From Themes |
Chinese Prime Minister, Wen Jiabao, on an unusual visit to tiny Greece, a country which normally would never warrant such a high-level visit from the world’s fastest growing economic giant, has pledged support for Greece and for the Euro. According to the official Chinese Xinhua News Agency (and China Daily), “China supports Greece in firmly carrying out structural reforms and cutting its fiscal deficits to improve competitiveness. China welcomes the EU and the IMF’s rescue package for Greece and stands ready to help Greece out of recession.” What it means concretely was made clear by Wen Jiabao at a press conference early October in Athens when he stated, “‘China is holding Greek bonds and will keep buying bonds that Greece issues. We will undertake to support eurozone countries and Greece to overcome the crisis.” The last statement is far the most significant. It indicates that China has made a strategic decision to counter any future attempt by US-based hedge funds and banks to attack the weak countries of the Eurozone, including Ireland, Spain, Portugal or Greece. Early this year, as we noted at the time, Wall Street banks such as Goldman Sachs, working in tandem with the US-based credit rating agencies, Standard & Poors and Moodys and Fitch, exploded the Greece financial crisis at the precise time China and other major investors were beginning to have serious doubts about the fiscal stability of the United States and of the dollar. Let me be clear. The Euro as it stands, the supranational European Central Bank and the EU approach to international financial stability is not merely a flawed construct. It is inherently programmed to crises. It was born as the product of flawed rotten political compromises in te 1990’s through the Treaty of Maastricht as an attempt by France and Italy and Britain to control an emerging German economic colossus after German unification. However, the concerted attack by a group of New York hedge funds such as George Soros’ and Paulson’s earlier this year and the precisely timed credit downgrade of Greece to “junk” status were part of a concerted US strategy of financial warfare against that Eurozone, the only potential alternative to the dollar as world reserve currency. Should the US dollar lose its status as the world leading reserve currency—today it still counts for some 65% of central bank currency reserves—the United States would be ultimately doomed as world sole Superpower. Now the surprise announcement by China of plans to support Greece and the euro give an unexpected boost to the embattled country and to the euro and expose the dollar even more to possible selloff. Greece desperately needs foreign investment to help it meet terms of a €110 billion bailout from eurozone members and the international monetary Fund that saved it this spring from state debt default.” I am convinced that with my visit to Greece our bilateral relations and cooperation in all spheres will be further developed,” Wen said on his way to Brussels for an EU-China Summit. Like most things that China does these days, it is part of a shrewd political calculation. Greece has agreed to support EU recognition of full market economy status for China within the EU, while China agrees to back Greece’s call for UN mediation over Cyprus. The two countries will will cooperate on development as well of Piraeus Pier, upgrading it to a distributing and transfer center for Asian exports to Europe, the Mediterranean, and the Black Sea. As if specially timed, US hedge fund speculator, George Soros, who is currently appealing a French court conviction for insider trading, [1] has come out publicly blaming the German government of Angela Merkel for austerity measures he says will lead the Euro Zone into a “deflation spiral,” demanding instead more of a US-style fiscal stimulus. US financial warfare against euroland? Notably, Soros has been one of the strongest voices against the Euro at a time when the world, at the end of 2009 was losing confidence in not the euro but the US dollar. On February 26, the Wall Street Journal reported details of a secret New York meeting involving billionaire hedge fund speculator George Soros of the $27 billion Soros Fund Management, along with SAC Capital Advisors LP, Greenlight Capital and undisclosed others. Accoording to the Journal report, they agreed on a concerted attack on the Euro, using the Greek financial crisis as the lever to make the attack credible. Earlier this year, speaking at the Davos World Economic Forum, the same Soros boosted the potential of the secretly planned collusion against the Euro, when he told press there was “no attractive alternative” to the dollar, a signal for a de facto attack on the Euro which was regarded six months ago as an alternative to the dollar as world reserve currency. He added that the Euro’s “problems” made it an unviable substitute reserve currency. Soros’ anti-Euro remarks were followed by prominent New York economist Nouriel Roubini, who said that Europe’s fiscal woes were creating “a rising risk” that its single-currency alliance will splinter. “Down the line, not this year or two years from now, we could have a breakup of the monetary union,” Both Roubini and Soros are close to the Obama Administration. Soros was one of the first financial backers of Obama and Roubini is reported very close to Treasury Secretary Tim Geithner. Following his hedge fund “chat” about the future of the euro, on February 22, Soros wrote an OpEd article in London’s Financial Times, the world’s most prominent financial daily in which he stated, “The survival of Greece would still leave the future of the euro in question.” The attack on Greece and the euro early this year also involved the most powerful players on Wall Street, the Gods of Money as I term them in my new book. The politically powerful Wall Street bank, Goldman Sachs, has been in the middle of the Greek financial manipulations since Greece entered the Euro in 2001. They were also involved in the January 2010 Greek crisis attack. On January 29, Goldman Sachs went with a number of top Wall Street firms to Greece where they met the Greek deputy finance minister and the National Bank of Greece. The Soros hedge fund attacks began several days after that. According to the Wall Street Journal report, Goldman Sachs, Bank of America and London’s Barclays Bank joined Soros and the hedge funds, making bets against the Euro at the same time Goldman Sachs is acting as an advisor to the Papandreou government, which would appear to be a rather clear conflict of interest. The US-based credit rating agencies, Moodys and Standard & Poors also played a critical role in weakening the Euro earlier this year. At the time the EU governments announced agreement in principle on a Greek bailout package in order to stabilize the speculative attacks on the euro, on Appril 27, Standard & Poors announced an unprecedented rating downgrade of Greek government debt by three-levels to “junk grade.” That move insured that pension funds and other investors would be forced to panic sell Greek bonds, a move that greatly exacerbated the pressures on the Euro. Asia Crisis and British Pound EMU crisis The pattern of the hedge fund attacks on the Euro follows the financial warfare strategy carried out by select US hedge funds previously. In 1992, on what many market professionals believe must have been insider information, Soros claimed to have made $1 billion speculating against the British Pound Sterling and forcing the British government to abandon plans to bring Britain into the emerging Eurozone. Had Britain and the powerful financial resources of the City of London come into the new Eurozone, many in Wall Street and Washington privately feared that could spell the death knell for the dollar as world reserve currency. The fact that the dollar is world reserve currency has been one of two strategic props for American power in the world, the other being the Pentagon. Were the dollar to lose that, the future of the American Century, the sole superpower would be mortally in doubt. Similarly, in May 1997, it was a concerted hedge fund attack again led by George Soros’s Quantum Fund, joined by Moore Capital Management and Julian Robertson’s Tiger Management Group and his Jaguar and Tiger funds, against the currencies of the Asian “Tiger” economies that turned Korea, Indonesia, Philippines, Malaysia. The wrecking of the Tiger economies in 1997-1998 turned those economies from self-sustaining dynamic economic growth, largely financially independent of US or IMF control, into de facto buyers of US Government debt as Asia tried to defend against future attacks. Like the Sterling crisis of 1992 the 1997-1998 Asia Crisis also served to give a few more years of life support to the fragile dollar. Now, as the US depression deepens and the dimension of the banking problems worsens by the Day; the dollar’s future is threatened as never before. To counter this, clearly the most powerful circles of Wall Street and the Treasury and Federal Reserve are magnifying the small Greek crisis into an exaggerated picture of “collapse of the EU” in hopes of ruining the Euro as a potential alternative to the dollar for foreign central banks. This is not to say that the Euro and the Maastricht Treaty are a model for a healthy alternative to the problems of the dollar region. Far from it. It is merely to identify the geopolitical power battle going on behind the scenes to keep the dollar Titanic from sinking. China has evidently decided to weigh in on that battle on the side of the euro. |
”I like to compare EU with Soviet Union”- European Parliament member
http://rt.com
The European Union should not be expected to last forever, believes British politician and member of the EU Parliament Roger Helmer.
”I do not think that the European Union can last forever,” Helmer told RT. “I like to compare it to the USSR, we should not do the comparison too far, but I think there are a lot of factors.”
“Essentially, both the USSR and the European Union have decided to create structures that ignore the identity and aspiration of the people and eventually the aspiration and identity of the people reasserts itself,” he added.
“The Soviet Union lasted for about 70 years, the European Union has just lasted for about 50 years [meaning beginnings of the European Economic Community] and I would not be at all surprised to see the same pattern, I think, in 20 years time. There may be something that is called European Union but I think it will look very different and be much less influential than it is today.”
bye bye EURO ? Nigel Farage about the Euro and Bruxelles !
One of my favorite European politicians :
Mr. Nigel Farage in his own words :
let him have eggs and shoes ! Tony Blair Fanclub Part1
to be continued……………
The Arab world, sick man of the globe
Rami G. Khouri
uruknet.info
Sun, 29 Aug 2010 19:17 CDT
The Somali capital Mogadishu is once again ripped apart by vicious street battles, the state-level equivalent of senseless drug wars among poor urban youth in other parts of the world. Somalia is the sad global laboratory of a society without a state, chaos masquerading as statehood.
Bahrain is once again plagued by street demonstrations and security crackdowns, reflecting a total inability of citizens and leaders to engage one another in a sensible political negotiation over the exercise and sharing of power. Bahrain should have been a leader in sustainable development and social equity in the region, given its small population and its early emphasis on educating men and women alike.
Iraq remains the most dangerous place in the region today, given its combination of internal stress, rekindled high levels of terror and political violence, the inability of the political class to achieve consensus, and the rampant interference of foreign countries. The destructive ripples that have radiated from Iraq outward to the region and the world in the form of foreign invasion and interference, terror groups, sectarian fighting and nation-state fragility are unprecedented in the modern era.
Lebanon remains trapped in its continuing dilemma of being both the vanguard of Arab liberalism, cultural creativity, intellectual production, tolerance, and multiculturalism, on the one hand, and a perpetual proxy battleground for regional and global powers who link up with fierce local fighters, on the other. The best of the Arab and universal human condition is on display in Lebanon every day, and every few weeks or months this is complemented by street fighting, assassinations, political stand-offs or large or small wars.
Yemen is caught in its own whirlwind of national fragility, polarization and low-intensity disintegration, having several times in its modern history split up and united, fought and reconciled, stabilized and plunged into warfare. Now it embodies a new destructive dimension in the form of militant Salafists linked with Al-Qaeda, making it another local breeding ground and battleground in the global terror industry.
Palestine becomes stronger and stronger as a national identity in the hearts and minds of its own citizens, but also more and more fragmented and disjointed politically on the ground. Several different Palestinian leaderships share legitimacy with some of their own people, but none has been able to achieve the more important international legitimacy or credibility and respect in the eyes of Israeli leaders and society.
Sudan chronically displays its own stresses and national deficiencies, including internal fighting on several fronts, the possibility of the south seceding after a referendum, and the ignominy of the president being indicted by the International Criminal Court.
Everywhere else, the Arab world is defined by top-heavy states where small groups of men surrounded by many soldiers make decisions without seriously consulting their fellow citizens. This legacy is firmly supported by major foreign powers who see “security and stability” as critical priorities in this region, by which they mean that Israel should remain dominant, Arab nationalists and Islamists should be fought and diminished, and security-minded Arab governing elites should rule forever.
This translates into a perpetual cycle of mostly disempowered and disenchanted Arab nationals who never get to experience the thrills of true and full citizenship – participation, accountability, opportunity, transparency. They share in transforming their states into shopping malls, their identities into categories of security clearances, and their humanity into unthinking automatons who wave the flag on command, cheer on cue, and otherwise restrict the exercise of their rational, emotional and creative human dimensions to subservience, acquiescence, and obedience in the political and social spheres.
Religion helps many such dehumanized Arabs cope with their constraints and discomforts. Emigration is a solution for some. Most people simply adjust to life in modern non-democratic states where the two most prevalent public manifestations of collective norms are in the domains of security and consumerism.
In “secure” Arab societies like Jordan, Kuwait, Syria, Egypt, Tunisia and others who do not suffer the chronic violence of Yemen, Palestine, Lebanon and Iraq, the ubiquitous symbols of Arab statehood and citizenship are guns in the hands of police and army personnel, and cell phones in the hands of all other nationals. This is another kind of unstable statehood, one whose vulnerabilities do not appear in the open as they do in those other Arab countries engulfed by fighting.



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