IMF Axeman for Ireland offers the Catholic Isle a 'Condom Cure'

A 'cock-up' is how the Irish Independent, linked here, describes the explanation of the IMF solution for the impoverished peole of Ireland as an "Irish solution to an Irish problem."

Ajai Chopra, seemed unaware that this phrase carries some very poor connotations, as explained in this quote from the article:

Sure wasn't it thrown around like snuff at a wake way back in 1979 during the ructions over the introduction of a bill by then-Health Minister Charlie Haughey? This radical piece of legislation allowed married couples armed with a medical prescription to purchase from a liberal-minded pharmacist those dreadful rubber thingies for family planning.

Charlie claimed the bill was "an Irish solution to an Irish problem" -- a phrase which was immediately and repeatedly flung back in his face

At least it provided a moment of laughter during the completely bizarre events underway in the downtrodden Irish sector of the EU, as the paper notes in the article's conclusion:

On reflection, perhaps Ajai's use of the phrase "an Irish solution to an Irish problem" was particularly apt. Sure the country is screwed anyway.

IMF trapped in EU Sovereignty conundrum!

The IMF exists to aid sovereign nations in economic difficulties. EuroGroup member states do not properly meet such criteria, as a consequence the IMF has put itself between a rock and a hard place.

Most IMF bailouts involve a currency devaluation by the distressed nation. Such is not possible with the EuroGroup ex-nations. Ultimately a devaluation of the euro could be achieved by steady degradations of the credit ratings of all the EuroGroup member states, logically terminating in Germany, a process now clearly and steadily underway. Yet Germany has no legal obligation to participate, indeed any such action has effectively already been declared as unconstitutional. So how has the IMF fulfilled its own obligations to its Board Members and fund providers? In a report in the Irish Times this morning, linked here, we have the answer:

In the letters, it is conceded the Government stands ready to implement further austerity measures beyond the €15 billion in the four-year plan, if the stringent quarterly targets set out by the EU-IMF in its three-year programme are not met.

The letter to IMF managing director Dominique Strauss-Kahn, states: “We stand ready to take any corrective actions that may become appropriate for this purpose as circumstances change. As is standard under fund-supported programmes, we will consult with the fund on the adoption of such actions.”

It appears from this that devaluation is not an option that has been ruled out by the IMF in so far as their loan to Ireland is concerned. (Note also the sting in the tail of the linked newspaper report which announces The Government has withheld from publication a side letter agreed with the EU and IMF outlining confidential measures for the banks and tax changes to be included in Tuesday’s budget.

Clear signs that the Irish bail-out is already sunk!

Last week it was noises off from Austria that forewarned the Greek government that the next tranche of EU money would be delayed. This week it was the Finnish government who first gave the clue that the Irish bail-out was far from being a done deal, by demanding continued ECB support as a necessary first step, read here. Ironic really when considering it is a Finn, Commissioner Olli Rehn setting down the ground rules for Ireland's total economic subjugation in the name of the very banks the ECB has wasted billions in trying to support.

An earlier clue to the fact that the IMF/EU rescue package had already been doomed came yesterday morning, when the package supposedly having been agreed was torpedoed well below the waterline and with devestating effects by the man who negotiated the details on behalf of the IMF, Ajai Chopra, read here.

Why would the person who had negotiated a rescue package, hoping for support for the deal in the Irish Parliament and understanding amongst the general public over the coming two weeks at that moment go public with a call for reductions in dole payments and a cut in the minimum wage? Only one suggestion comes to my mind and that is that he had exceeded his authority in the negotiations and intended to incite the other side to renege on the terms and thus save his own position to the already severely strapped Board of the IMF.

Lastly, of course, we have the fact that no details of the deal became available during yesterday. No date was set for a meeting of the Euro Group Ecofin whose agreement would be required.

On top of all that as the day went on Spanish interest rates rose, Portuguese credit guarantees grew ever more expensive and the German Chancellor, on whom the EU and the world looked for action, could only publicly wring her hands and declare it was all "exceptionally serious".

The revised budget for Ireland is due to be published today, whether it eventually passes into law or not next month, my guess is that the IMF/EU rescue package will not arrive. The now relatively small amounts available to the EU Group under the supposed shock and awe package agreed last May must now all be hoarded for Spain!

Mad benefit proposals and House Prices

If you have one huge glaring anomaly in an economy it distorts every other area of national life and eventually results in extraordinary distortions of common sense over simple principles.

Yesterday morning on the LBC radio programme, phone in listeners were asked to suggest what could be done to immediately reduce the benefit bill for a married couple both unemployed with four kids claiming combined benefits of thirty six thousand pounds a year. Only one caller hinted at having a vague recognition as to the real villain - housing costs. Last evening on BBC Newsnight, a Government Minister gave the governing coalition's response, namely to cap the benefits and place a ceiling on the number of children for which benefits can be claimed.

Benefits have to be set so high because house prices have become so out of line with ordinary wages that workers can no longer really afford to live and house themselves on typical wages. Housing benefits go to feed the 'buy to rent' Rachmans, forcing taxpayers, albeit indirectly through the unemployed, to subsidise greedy private landlords while the fattened middle classes for the main part rest content to sit on their fat overvalued property portfolios at the expense of their children and society at large, if necessary refusing to move pending a return to house price hyper-inflation.

The IMF in its World Economic Outlook issued ahead of the meetings with the World Bank today, recognises this British reality and cautions on its threat to future growth, but also feeds into another fairyland, that where sovereign nations are not about to default en masse, read the section of their report on Europe from this link.

Euro Currency already costs EU two IMF seats

The 48-nation Asia-Europe summit ended with agreement to consolidate a fragile economic recovery and ensure that reform of the International Monetary Fund gives more power to the emerging economies of Asia and other continents.

"This process needs to take into account the realities of today's world economy - the shifts that have been taking place, and the strong growth in dynamic emerging markets and in developing economies," EU President Herman van Rompuy said.

The EU offered last week to give up two of the eight seats its members hold on the 24-member IMF board, to make room for emerging nations, but analysts called the gesture insufficient. The United States wants the board cut back to 20 seats, with fewer Europeans. The issue is set to go to a Group of 20 major economies summit in Seoul next month.

The full report is in EurActiv, linked here. It appears if a further two will also be needed to be ceded before negotiations are concluded, it will be amusing if the final agreement on this considerably reducef European role will co-incide with the break-up of the common currency especially coming on top of the huge loss of wealth the euro has caused all Europeans.

ECOFIN to debate US plan to end Europe's dominance of the IMF, etc.

Although there is no mention of removing several EU board members from the IMF appearing on the agenda for tomorrow's meeting of ECOFIN, the Euractiv web site covers the matter in some detail and is linked from here. I quote a passage of interest:

Germany, France and Britain have their own seats on the board, while EU members Belgium, the Netherlands, Spain, Italy and Denmark represent groups of countries. Switzerland, although not part of the EU, also has a chair.

The United States' unprecedented move last month to block plans that would have maintained Europe's long-running dominance over the 24-member board will be discussed. The US Senate has also voted to block use of its taxpayers' money for IMF rescues such as the bail-out of Greece.

If the eurogroup of countries wish to be taken seriously as a block with a single currency it follows they should be represented by one board member. Britain and Switzerland with their own currencies should naturally retain their representation.

Turning to greater issues facing the world's economies, a good summary of the total gloom prevailing at the Ambrosetti conference on Lake Como during last Friday and the weekend is available from here.

EU troughing returns full throttle although for once PM Cameron appears ready to make a token protest at the costs of the new EU External Action Service under Lady Ashton according to an FT report, linked here.

On domestic politics we await the resignation of William Hague and hopefully also Andy Coulson. Lib Dems should exert their muscle in both instances. Should Osborne move to the Foreign Office and would David Laws accept the challenge of being Chancellor in such difficult times, perhaps he is the best placed candidate to take the country with him through the drastic cuts and economic turmoil that certainly now lies ahead? Could Nick Clegg risk the possibility of his party's final extinction should Laws fail for the almost certain kudos which would almost certainly follow any success ----- interesting times! Can Cameron risk a revitalised Osborne free from the stigma of certain economic mismanagement and the added gravitas of former Foreign Secretary?

What will Osborne give away tomorrow? Can he politically ever recover if he confirms the Prime Minister's acquiesence to the loss of the powers of taxation ovcr the City of London, as accomplished at the European Council on the 17th June 2010?

IMF Boost to further strain Britain's resources

A report that the IMF will seek to increase its lending capacity by a further 250 billion dollars to a total of a trillion is bad news for Britain as a likely future recipient for the funds.

The magic roundabout of debtor nations underwriting loans to international organisations coming to their aid is already in danger of reaching absurd proportions, as proven by the credit downgrading of Ireland this morning! If the contributions to the extra IMF cash are called upon in the same ratio as detailed here, reported to be decided at the November G20 meeting, then the UK share will be around 5% or 12.5 billion US dollars.

The Slovakian decision to not agree to contribute cash to the Greek bailout will almost certainly prove not to be an isolated case when real transferable funds, rather than pompous intenational verbiage and fudged agreements over expensive meals are eventually a necessity.

Time for another shock and awe EU package to save the PIGS financed by the self-same sovereign debtors (posing as the EU) perhaps!

Brown and the EU to neuter and silence Britain in the IMF

Bruno Waterfield has the story in the Telegraph Online linked here, which concludes as follows:

Mark Francois, Conservative spokesman on Europe, said he will be tabling questions in the House of Commons to seek urgent answers.

"Losing our independent voice at the IMF to the EU would be a totally unacceptable loss of national sovereignty." he said.

Fine words but as always the Tories will roll over for the EU for their share of the EU Gravy Train - kick them off it!