Ireland

Sunday

Alex Massie

The Bell Tolls for Biffo

Back in the rare ould times you could always rely upon Fianna Fail’s instinct for self-preservation to kick-in and heaves against the party leadership were a reliably entertaining fixture of Irish political life. The remarkable aspect of this present crisis was that that, for a while at least, it looked as though Brian Cowen might somehow survive to lead his party to its looming Waterloo. Where, in the name of the father and all that’s holy, was the Fianna Fail of old? So fair play to Micheal Martin, the foreign secretary, for doing his bit to wield the knife. It’s hard to imagine he’s the answer but he’s less obviously

Wednesday

Alex Morton

Stable house prices won’t happen by themselves

Grant Shapps has impressed in the housing brief, arguing that house prices rising faster than wages is not a good thing (with which Policy Exchange’s report, Making Housing Affordable, agreed). He has probably been encouraged by the fact that some recent polls have shown even a majority of owners want prices to stop rising. Perhaps having your kids live with you until they are 40 just isn’t a popular option? More so, rising house prices only benefit those who downsize (now rare) or own multiple properties; and in the wider economy it mostly discourages productive investment and encourages borrowing – hardly good things.   But while Shapps’s aim is laudable,

Thursday

James Forsyth

Johnson’s economic education

When he took on being shadow Chancellor, Alan Johnson said that he would need to get hold of an economics primer. Judging by his comments in yesterday’s debate about the bi-lateral loan to Ireland, he hasn’t got that far into it. Johnson told the House, ‘The euro had nothing to do with the [Irish] property boom and bust’. This is a bizarre statement. If Ireland had been able to set its own interest rates, they would have been far higher and thus dampened down the property boom. As Johnson’s close friend and the former Chancellor Alistair Darling said later in the debate when asked if he agreed with the Shadow

Friday

Alex Massie

A Horse Outside

Clearly, this song should top the Irish Christmas charts. The ghosts of Yeats, Kavanagh and all the other lads have nothing on the Rubberbandits. The Plain People of Ireland have a horse outside and they’re going to ride it. Warning: this song contains a considerable amount of huge quantity of profanity. Warning too: if you’re Irish or have spent heaps of time in Ireland you may also find it very funny.

Wednesday

Monday

David Blackburn

Setting the scene for Osborne’s speech

George Osborne will make a brief statement to the house this afternoon, responding to the Office for Budget Responsibility’s revised growth forecasts. Reuters reports: ‘As expected, the Office for Budget Responsibility raised its 2010 growth forecast to 1.8 percent from its 1.2 percent June forecast to factor in a surprisingly strong performance in the middle of the year.’ The upgrade fuels Osborne’s positive narrative: the coalition pulled Britain from the abyss and international confidence in Britain’s economy is growing. These forecasts vindicate the government’s ‘cut with care’ strategy. Concrete savings are now being made and they enable the Chancellor to announce that public sector net borrowing will fall. Reuters again:

Saturday

The Spectator

Portrait of the week | 27 November 2010

Britain is to lend Ireland up to £9 billion. Home Britain is to lend Ireland up to £9 billion. ‘Ireland is a friend in need,’ George Osborne, the Chancellor of the Exchequer told the House of Commons, ‘and it is in our national interest that we should be prepared to help them at this difficult time.’ British loans could be made via three routes: bilaterally through the European Union; through an agreement under the European Financial Stabilisation Mechanism; and through the International Monetary Fund. Theresa May, the Home Secretary, said that the number of workers coming from outside the European Union would be capped at 43,000, about 5,600 fewer than last year’s

Daniel Korski

A more German Europe?

Timothy Garton Ash asked an important question in the Guardian recenty – is Europe becoming more German? Or, to put it more accurately, does the EU have to become more German to survive? “If the eurozone falls apart, it will be because Germany did not do enough to save it. If the eurozone is saved, it will be thanks to Germany. This is the greatest challenge to German statecraft since the country was peacefully united 20 years ago.” “Yet here is another horn of Germany’s dilemma. For half a century, German politicians have repeated, like a mantra, Thomas Mann’s call for “a European Germany, not a German Europe”. It was in

Hugo Rifkind Hugo Rifkind

I no longer understand what ‘Ireland’ means

The defining commentary of this on-going financial crisis, for me, came from Gerald Hill of the Midlands, in a letter to the Times in March 2009. ‘Sir,’ he wrote, ‘I can now understand the term “quantitative easing” but realise I no longer understand the meaning of the word “money”.’ I’m with Gerald. Take the IMF and EU bailout to Ireland, intended to calm market fears over that country’s debt crisis. I understand ‘IMF’ and I understand ‘EU’. I understand ‘bailout’ and I understand what a ‘debt crisis’ is, and why this particular one has happened. I also, pretty much, understand ‘the markets’, even if I do struggle to grasp why

Daniel Hannan

Politics: The right way to help Ireland

Why is Britain committing £7 billion to a bailout which will trap Ireland in its present discontents? Would you trust an economic forecaster who had recently said this? The euro has done more to enforce budgetary discipline in the rest of Europe than any number of exhortations from the IMF or the OECD. If we remain outside the euro, we will simply continue to subside into a position of relative poverty and inefficiency compared to our more prosperous European neighbours. Or this: The euro has already provided great internal stability to the eurozone. Or this: If we get rid of sterling and adopt the euro, we will also get rid of sterling

Friday

Daniel Korski

Iberian blues

I’m finishing a two-day trip to Spain and am about to board a plane, just as the bond markets turn their attention to the Iberian Peninsula. As James wrote yesterday, the gap between Spanish 10-year government bonds and those of Germany has widened to as much as 2.59 percentage points – the biggest gap since the introduction of the euro. For its part, the Portuguese government said it was under no pressure from the European Central Bank or other Eurozone member-states to accept financial aid to ease its debt and deficit problems. That sounds like the noise before the defeat. Portugal was brought to a halt yesterday by a strike

Thursday

James Forsyth

Why Spain matters to Britain

So far Ireland and Greece have been bailed out with relative ease. If Portugal required external assistance, Europe could run to that too. But bailing out Spain would be another matter entirely. As The New York Times points out today, the Spanish economy is twice as big as the Irish, Greek and Portuguese ones combined. Spain’s situation is not yet critical. But as the NYT piece sets out very clearly, there are some extremely worrying signs. The gap between Spanish and German gilt yields is now at the biggest point it has been since the introduction of the euro. Spanish banks are also heavily exposed to Portuguese debt. Compounding these

Tuesday

Alex Massie

The End of the Party?

Following this post on Fianna Fail, a Dublin correspondent cautions against underestimating the stubbornness of their hold upon the people: Fianna Fail will rise again. For two reasons: i) Fine Gael and Labour may need the support of lots of other parties to get anything done. The scope for internal disagreement is immense. It is likely that they will lose popular support very quickly if they preside over savage cuts, which they will have to do; ii) For those of us old enough to remember, Fianna Fail acted like thugs in opposition. They opposed everything (including the Anglo-Irish Agreement) and whipped up popular hysteria against the government over the smallest

Monday

David Blackburn

Cowen will seek a dissolution next year

There has been much consternation and intrigue swirling around both Dublin and Westminster this afternoon about the near-collapse of the governing coalition in Ireland. The Greens, who support Brian Cowen’s Fianna Fáil-led government, pulled out; seeking a dissolution in the hope that it might save their skins from the fate that is likely (though not certain) to befall Fianna Fáil. If the government had collapsed, then IMF would have postponed the bailout. At least now Cowen can formulate a monetary plan, hopefully under the oversight of Ireland’s international creditors, to free the country from its current extremis.   

Alex Massie Alex Massie

A Christmas Present for George Osborne

You can get yours here. In passing, let’s observe that Osborne is right to offer the Irish whatever assistance he can. Not because of economics or even politics but because it’s the right thing to do. Friends help friends and that’s about all that really need be said on the matter. [Via Joe Wiesenthal]

Alex Massie Alex Massie

The End of the Party

You’d never guess that Brian Cowen and Brian Lenihan are members of Fianna Fail, would you? Oh, you would? Fancy that. Grotesque. Unbelievable. Bizarre. Unprecedented. Ireland has known crises before, many of them extremely serious. But the GUBU days now seem the stuff of comic opera when set beside the battering Ireland has taken these past few weeks and months. The game is up and all that’s left is the reckoning. Today the Green party pulled the plug on the coalition in Dublin. The Greens may not fare well in this poll but they deserve some modest amount of praise for recognising, as Fianna Fail patently did not, that an

David Blackburn

Ireland’s crisis is the fault of Fianna Fáil, not just the euro

In all likelihood, George Osborne will rise this afternoon to groans if not jeers. Britain looks set to lend Ireland £7bn as part of multilateral and bilateral bailouts. Many, particularly the Eurosceptic right, question our involvement, given our straitened financial circumstances and the apparent fact that Britain is sustaining the eurozone’s monetary and debt union, and will have to borrow to do so.     George Osborne has been adamant throughout: Ireland is too important to Britain’s recovery to risk collapse – British and Irish banks are closely linked, debts and borrowing are often co-dependent, trade is very profitable. That the bailout should strengthen the euro is a natural consequence of Ireland

Sunday

Fraser Nelson

The death knell for the Euro?

Are we witnessing the start of a very long death scene for the Euro? Asked if the Euro will survive, William Hague replied simply: “who knows?”. The new president, Herman Von Rompuy, has said that the Euro faces an “existential test”. We are looking at the very real prospect of the Euro’s collapse. And that “if we don’t survive with the eurozone, we will not survive with the European Union”. This would, by necessity, require a new treaty – and give Britain an unprecedented opportunity to renegotiate its membership on terms the public regard as acceptable. In my News of the World column today, I say (£) that this presents Cameron

Thursday

Mats Persson

Britain may not be able to avoid bailing out the Irish

This morning, it sounds as though Ireland has finally buckled to demands that they accept a bailout from the EU. Their central bank governor, Patrick Honohan, has said that he expects a “very substantal loan” from Europe – although the details, and debtees, are yet to be clarified. In the UK, of course, backbench MPs and others have been quick to condemn any move which would force British taxpayers to cough up cash under the EU’s various bail-out arrangements. Only problem is: the UK may not have a choice. The part of the eurozone bail-out package which Britain could be underwriting to the tune of £6-7 billion – the so-called

Wednesday

Alex Massie

Blaiming the Euro for Irish Woes

On the other hand, Philippe Legrain makes the case that too much blame is being apportioned (perhaps opportunistically) to the euro and not enough is being fixed to the Irish government: The problem is not that savings flowed from Germany to Europe’s periphery. It is that they funded property bubbles rather than productive investment. But the blame for that lies with herd-like investors, flawed banks and foolish governments, not the euro. After all, America, Britain, Iceland and other non-euro countries all had huge property bubbles too. Granted, joining the euro did slash Irish interest rates, creating cheap borrowing that fuelled the boom. But at a macro level the Irish government