More on Ireland

Another quickie Ireland at Foreign Exchange today, this time looking at the politics of the deal with an Irish TD:

Going into the conversation, I was under the impression that Ireland might hope to renegotiate at a lower interest rate after the crisis has stabilized somewhat. Deputy Fleming was determined to disabuse me of this assumption.

Over time, he says, “people will begin to see that the interest rate is not so bad. If the financial situation stabilizes, by year 3 [of the loan period], it may be possible to be raising funds in the bond markets again at a rate that is lower than the rate on offer [in the EU settlement], and we may not have to draw it all down at that rate.” In other words, there’s no plan to renegotiate a better deal in Brussels, but there is a plan to aggressively hack at the deficit domestically, and then leverage the Brussels offer to renegotiate with the bond markets.

For more such optimistic predictions, read the whole thing.

Germany’s Ireland Calculus

Short post over at Foreign Exchange on Germany and the Irish bailout:

…the Ireland debacle is just the latest episode in an ongoing conversation about Germany’s place within the eurozone, about the German public’s frustration with cleaning up after its weaker neighbors and about the frustration of other major EU players with German intransigence.

Here’s the question: is this particular incident (the threat to gauge the bond markets to appease to German public followed by a five year compromise that spares the bondholders with promises of stricter rules in the future), a victory over the Germans, or a victory for them? was Angela Merkel made to compromise, or was she bluffing all along? I’m guessing it’s the latter…

Go read the rest.

You cannot paint a house green…

and then complain about the color.

But that’s exactly what conservative Republicans are doing on talking head shows this week. Over and over again, when asked to explain how the bailout bill self-imploded yesterday, they cite “partisan bickering.” Frankly, I’m with Gail Collins on partisanship: it’s just part of the process. But even if you think, as did George Washington, that parties are a great evil, the phrase just doesn’t apply here.

Let’s review:
Bailout proposed by REPUBLICANS Paulson and Bernanke.
Bailout revised via negotiations with top Senate DEMOCRATS.
Revised bill supported by REPUBLICAN President Bush.
Passed by Senate DEMOCRATS and REPUBLICANS.
Dies in the House, 40 DEMOCRATS, 130 REPUBLICANS vote “no.”

The tension here, between supporters and opponents of the bill, has less to do with party allegiance than it does with who’s up for reelection: CNN reported today than 2/3 of “no” votes came from members in contested races this November. Despite the frozen credit markets and concerns about jobs and home loans, the plan just hadn’t won over most voters.

And if there IS an ideological line to be drawn between those who were for and against this bill, it’s not between Democrats and Republicans, but between conservative Republicans in the House (who made up the lion’s share of naysayers) and moderates in the Senate/the Executive agencies (who proposed and drafted the bill). Having brought DOWN a bipartisan bill by breaking with their own party, Congressional Republicans are now blaming partisan differences for the collapse of the plan.

Here’s what infuriates me most about this tactic. “Partisan bickering” is code for a belief that the governmental process is general is more of a problem than a solution to Main Street woes, and thus (as these conservatives belief) that we should reduce the size of government. To sabotage that process when it IS working, just so that you can claim on the talk show circuit that the process DOESN’T work is a cheap, base political ploy. In fact, it’s partisan politics.