Behind the scenes at the Dublin FinMin bail-in bunfight
Renowned infamist Reggie Middleton has been banging on about the basket case that is the Irish banking system for some time now. I have to confess that I had my eye taken off this ball by a continuing fascination with Plod’s blind spot about systemic child buggery; but in its own cataclysmic way, bank depositor buggery is an equally serious issue. A valued eye in Dublin sent me some data on this yesterday (big hat tip for that, Christopher) and afterwards I contacted two further people there – one a hack, the other a banker of sorts. Their feedback was intriguing.
In case you didn’t catch onto it yet, the Truthspeak for stealing from depositors has moved on from ‘Open bank reconciliation’ to the preferred mendacity of ‘Positive Depositor Preference’. So if you think your Sovereign State is about to rip you off for a hundred grand, watch out for somebody putting on the orange glove, because then you know when you’ve been Cyprused. (With apologies to the old Tango campaign)
The EU FinMins were fortuitously meeting in Dublin over the last two days, which appears to have served two purposes: making the ship look unsinkable, and facilitating frantic negotiation away from the Big Table. In recent weeks, Troika visits have been downplayed, and Ireland has been referred to as ‘nearing the end of its bailout’. ‘But the simple truth,’ wrote the Irish Times three days ago, ‘is that Irish banks need more capital’. Politely, the IT reiterated a Slog chestnut of long-standing: without capital, there can be no growth. The problem, if I understand my sources correctly, isn’t that the Irish banks need more capital to help economic growth: they need it, right now, to avoid collapse.
German Bundestag leaks from anti-euro MPs suggest that a Troika team has already stress-tested Ireland’s Banks, and sent an explanatory note to Jeroen René Victor Anton Dijsselbloem along the lines of “Every man for himself”. Or more accurately, “Everyone else’s money for us”. So to employ a Jeremy Warnerism, “If you have money in an Irish bank, get it TF out now”.
I’m reliably informed that the Irish presidency of the European Council tabled a blatant depositor ‘preference’ scheme six days before last weekend’s G7 meeting near London. It then flew from G7 to FinMin, onto a menu under the table, and got itself debated via some suitably restrained yelling away from the table. Later, back at the table, the scheme was approved by “almost all” of the FinMins present, so clearly the idea to crash your cash isn’t off the table, it’s just not being released to the media, who were anyway busy getting pie-eyed at the adjacent table.
Around mid-afternoon yesterday, Dijsselbloem had this to say: “I’m very reluctant to allow for a lot of flexibility for the euro-zone countries. The pressure will be enormous from financial markets, from your parliaments, not to go too hard on the bail-in, to take more risks on the public account once again.” Putting those remarks into words, what Jeroen means to say there is that we have two ways of doing this guys: keep printing money, or just cut out the bureaucracy involved and steal it off the citizenry, like we did in Cyprus. But his intention in putting all the right words in the wrong order was to suggest that everyone who’s been reading Reggie Middleton’s column should calm down.
This is because the Dutchman knows via Mario and Wolfie that money is flying out of the eurozone so quickly now, teams are working 24/7 on bank carpets to clean off the scorch-marks. So he has to say he’s reluctant. He has to suggest that – as he did later in the same press session – there will only be “very restricted exemptions to proposed European Union rules on how to assign losses when banks fail.” But either because he’s a mealy-mouthed sh*thead, or just muddled as a person, Dissisgoinboom left the impression that stealing would be the exception, not the rule. In fact, the rule as approved by most of the Funny-money Finmins yesterday was, um, stealing. My money’s on Jeroen being an MMS, but you must make your own minds up on that one.
Despite the playful tone of this piece, I should like to ask for something I think to be fairly reasonable from Britain’s mainstream media:
I feel a little better now.