Ireland Demands Rescheduling Of Bailout Terms, Or How Dublin Went From M.A.D. To S.A.D.

Tyler Durden's picture

So in Europe socialist beggars can be choosers. According to Reuters, "Ireland  wants to reschedule debt issued under its EU/IMF rescue package and will not accept less favorable treatment than other bailed out countries in changing the deal, its public expenditure minister said on Thursday. Brendan Howlin told Reuters that the government intended to seek to reschedule the International Monetary Fund/European Union portion of its debt in due course. "Obviously long-term rescheduling of debt is something that would be desirable and we will deal with it," Howlin, appointed in March to the newly created expenditure department, said." Congratulations to Ireland- having been boxed into a corner so deep, Ireland has now downshifted from Mutual Assured Destrcution to Self-Assured Destruction unless its ultimatum is met.

This sets up an interesting dynamic: on one hand Irish politicians will be delighted by Europe and the IMF agreeing to this ultimatum; on the other Irish citizens will perceive that this outcome will be beneficial (when in reality it will merely prolong the pain), but most importantly, on the third hand, the actual rescuers, who just happen to be the same entities that will be wiped out should Ireland implode, will also enjoy lowering the interest rate (and extending the maturity) for Irish bailout bonds, as it means they still get to bleed Ireland dry, only at a slower, and thus less volatile rate, which will guarantee a longer payment period on their loans by the Irish taxpayers. So who would be against this? Ironically, it should be the taxpayers of other EU countries (and Americans who fund the IMF, but they couldn't be bothered to think about what this means), as it will mean recoupment of initial capital will come much slower and will likely allow bailed out countries to have far greater leverage to dictate rescue terms in the future. Although with nobody at this point believing Europe will survive in the long-term, it is very likely that nobody will object to this last ditch attempt at keeping the game theory in place for a few extra months.

More from Reuters:

Ireland is hoping to get a cut in the cost of its loans from the EU but Howlin said Dublin would also like a longer-term commitment from the European Central Bank (ECB) on the provision of emergency liquidity to Irish banks.

"We want a better interest rate and we want affordable long-term liquidity for the banks. We had some comfort from the statement from the ECB after the recapitalization announcement but it is difficult when it is on a medium term basis and that is something we are working on still."

On the other hand, since all of Europe's banks now rely exclusively on the ECB for funding, it is not like the relative situation could get any worse if there is no interbank market following an event that would increase the risk profile for European countries.

ECB policymaker Luc Coene told Reuters in Brussels on Thursday that the central bank was still working on a special facility for banks frozen out of the interbank market and reliant on the ECB for funds.

In the meantime, Ireland has refused to budge on the one key topic of debate: it corporate tax rate.

Ireland is under pressure from some euro zone members, chiefly France and Germany, to raise its iconic 12.5 percent corporate tax rate in return for a one percentage point cut off the average 5.8 percent rate of its loans.

Why anyone cares what Irish corporate taxes are at this point is beyond us: most countries are already likely considering shifting to other offshore tax havens, which, for a change, are not bankrupt, and threatening to shoot themselves if the "or else" part is not granted.

More from Reuters:

Greece got a similar reduction in March after it pledged to raise 50 billion euros by selling state assets by 2015.

However, with Greece currently in talks with the EU and IMF over improving its loan terms, Howlin said it would be unreasonable for one country to get better terms than another or to force Ireland to surrender something to do so.

"It is unreasonable to piggyback domestic issues (on the interest rate cut)," Howlin, a member of the junior coalition Labour party, said.

Some euro zone officials have said Dublin could help its case for an interest rate cut by accelerating its program of cutbacks but Howlin ruled that out too.

"I don't see further austerity as being part of the bargaining chip on an interest rate deal," he said.

"It would be entirely unreasonable if interest rate reductions that are available to others wouldn't be available to ourselves ... We certainly don't want to be treated and won't accept treatment less favorable than other euro zone partners."

Howlin reiterated that raising Ireland's corporate tax was off the table but that the government would examine the effective rate of corporation tax with its European partners if that is what they wanted.

And more such Self-Assured Destruction drivel. Full think can be read here.

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Cognitive Dissonance's picture

"Ireland  wants to reschedule debt issued under its EU/IMF rescue package and will not accept less favorable treatment than other bailed out countries in changing the deal......

Those damn peasant nations are getting down right uppity. Time to slap some sense into them.

Release the hounds!

Cognitive Dissonance's picture

We know what is next......right? Population re-training via police action. Here is how Madrid did it.

LawsofPhysics's picture

That one seems a bit thin, but I guess lean meat is better for you anyway.

I only kill chickens and wheat's picture

Dogs of war and men of hate
With no cause, we don't discriminate
Discovery is to be disowned
Our currency is flesh and bone
Hell opened up and put on sale
Gather 'round and haggle
For hard cash, we will lie and deceive
Even our masters don't know the web we weave
One world, it's a battleground
One world, and we will smash it down
One world ... One world
Invisible transfers, long distance calls,
Hollow laughter in marble halls
Steps have been taken, a silent uproar
Has unleashed the dogs of war
You can't stop what has begun
Signed, sealed, they deliver oblivion
We all have a dark side, to say the least
And dealing in death is the nature of the beast
One world, it's a battleground
One world, and we will smash it down
One world ... One world
The dogs of war won't negotiate
The dogs of war don't capitulate,
They will take and you will give,
And you must die so that they may live
You can knock at any door,
But wherever you go, you know they've been there before
Well winners can lose and things can get strained
But whatever you change, you know the dogs remain

Pink Floyd, "The Dogs of War"

Mountainview's picture

Greece, Ireland, Portugal, Greece, Portugal, Ireland....Spain and round and round it goes....

hambone's picture

Cue scene from Blazing Saddles w/ gun to own head...

camaro68ss's picture

Can the house of cards fall already

bobby02's picture

Core EU is fucked - they just don't realize it yet. Either pay the cost of bailing out PIIGS or pay the cost in an increase in euro-denominiated debt premia that will follow an EU sovereign default. Wonder which is less?

Let the Games continue!

downwiththebanks's picture

The problem comes from giving all that welfare to the banker-gangsters to spend on a spending spree of hookers, drugs, and free money for use at the gambling den!

But it's much better to focus on the effect rather than the cause when the cause is you.

SwingForce's picture

Off Topic, can anyone tell me why AGQ & ZSL are BOTH down? These are leveraged silver etf's, ZSL is the inverse, so 1 should be up. Thanks.

Bam_Man's picture

Extreme intraday volatility causes tracking errors.

Stay away from 2x inverse ETF's, they are pure portfolio poison. 

Iriestx's picture

Two choices Ireland:

1.  Nut up and go IRA-style on politicians, bankers and their families.

2.  Roll over and accept your fate as a slave.

I only kill chickens and wheat's picture

I think I'm doing it backwards, closing out my IRA's to "Nut up"

Trijicon ACOG® (Advanced Combat Optical Gunsight®)

ZFiNX's picture

We Irish are no man's slave.. We will gladly die before we let any foreign scum tell us what to do.



buzzsaw99's picture

It's not even all of Ireland, it's like half. Good luck getting your money back suckers!



Sudden Debt's picture


Just go to the end of the rainbow and when you see a leprechaun sitting on a big kettle, you say:


And you'll have it all back payed in gold.

pappacass's picture

Yeah, bit of an auld head fake there from Howlin.  He just needed to come up for some air. 

Clowns on Acid's picture

Ahhh...(while sipping on me Guinness)

"The Oirish, the men that God made mad,

 For all their wars are merry,

And all their songs are sad."

- G. K. Chesterton

CrashisOptimistic's picture

Just to remind folks, the Swaps decide everything.

Credit default swaps on Ireland, Greek, etc debt would trigger on any default or restructure and there are billions upon billions of them owned by banks all over the world and . . . those . . . banks . . . have . . . refused . . . to . . . divest.

They have been begged, ordered, pressured and threatened to divest, and they have not done so.  Instead, they inform their Prime Ministers that they have vast holdings of the swaps and if those countries default, the swaps will trigger and bankrupt Germany, and France, and England and the US.  

And so, Mr. Prime Minister, you need to keep taxpayer money flowing (because eventually it will go in the banks' pockets).  

It is the indirect result of oil depletion.  The banks know there can never again be any growth, so they arrange to grow their piece of the shrinking pie.  



sangell's picture

Ireland doesn't really have a sovereign debt problem. It has a broken bank problem. It can export that if it has the guts.

CrashisOptimistic's picture

That's a bit of a difference without distinction, but your conclusion is valid.

The swaps exist on both soveriegns AND Irish (or Greek) bank debt.  The point is not the underlying entity.  It is the refusal of banks globally to divest their swap holdings and close them out.  

They have reasoned it out.  In a world with oil capped growth, their conduit into taxpayer money is simply holding swaps and terrorizing politicians.

bingaling's picture

Fully loaded weapons of mass destruction - I am not a big fan of Putin but if the situation was the same in Russia he would not hesitate to put people at the banks behind bars and break up the banks and give the banks business/assets to those willing to divest the swap holdings .

Escapeclaws's picture

Putin is a sociopath. You admire sociopaths?

downwiththebanks's picture

I admire people with the temerity to face up to the banker-gangsters who think the world revolves around their drug binges, welfare checks, and trips to the casino.

Moreover, to be a banker-gangster is to be a sociopath.

downwiththebanks's picture

This is the point Tyler willfully refuses to acknowledge, in all of its manifestations.  

Much easier to create idiotic diversions by blaming the silly muppets rather than the thieves telling them how to behave and what to say.

Because doing so puts blame where it belongs - don't want that.

beastie's picture

Fooking idiots. Shower of gobshites running/ ruining the country.

Did you know 70% of Irish mortgages are variable?

Did you know Debtors prison is still on the books?

Bam_Man's picture

Do they serve Guiness with the evening meal in Irish debtor's prison?

slewie the pi-rat's picture

"Irish Reveal New Negotiotiating Tactics Upon Discovering EU Has Vaseline"

forexskin's picture

SLEWIE - glad to see you back and cheering the lubing of the 'gears'

nah's picture

aint it the bible says a bailout for a bailout.....

Eally Ucked's picture

Ireland decided to take banks debt on their own books. Now they are in situation of credit card holder making 4000$/mth and after costs he's left with 200$ and his interest on CC is 300$ now he has choice to say fuck it or borrow more and pay it counting on miracles down the road. 

falak pema's picture

hard place and a that order...for the PIIGS.

slewie the pi-rat's picture

listen!  it turns out we can offer you enslavement on much better, easier terms.

really?  where do i sign?

Silver Bug's picture

They either reschedule for them, or they let them default. The end result will be that they default no matter what, if they know what is good for them. But if the banks want to keep this game going and squeeze as much juice out of them as possible. They know what they have to do.

carbonmutant's picture

The Irish are a special case...

Eireann go Brach's picture

The lads from the Easter 1916 Rising era must be turning in their fucking graves watching this pathetic groveling going on, tell the EURO, Trichet and all the wankin fucking bankers to go Fuck themselves and let the ensuing doiminos fall as they may.

"They think they have forseen everything, but the fools! the fools! the fools! they have left us our Fenian dead; and while Ireland holds these graves "Ireland unfree shall never be at peace." 

Padraig Pearse

hedgeless_horseman's picture

+ Wolfe Tone...

"To subvert the tyranny of our execrable government, to break the connection with England, the never failing source of all our political evils, and to assert the independence of my country--these were my objects. To unite the whole people of Ireland, to abolish the memory of all past dissentions, and to substitute the common name of Irishman, in the place of the denominations of Protestant, Catholic, and Dissenter--these were my means."

zippy_uk's picture

So has Ireland fallen fowl of the Euro, or is the Euro about to fall fowl of Irish politics?

If I was a Eurocrat I would be shitting bricks about Ireland

dexter_morgan's picture

What, the Guinness supply running low?