http://www.telegraph.co.uk/finance/financialcrisis/9112155/Irish-EU-treaty-vote-threatens-chaos.html
10:20PM GMT 28 Feb 2012
466 CommentsPremier Enda Kenny said Dublin was acting on legal advice from Ireland's attorney-general that "on balance" the fiscal compact requires a vote under the country's constitution. "It gives the Irish people the opportunity to reaffirm Ireland's commitment to membership of the euro," he told ashen-faced members of the Dail.
All three major parties back the treaty but analysts say there is a high risk of rejection by angry voters in the current fractious mood. The compact gives the EU intrusive powers to police the budgets of debtor states, and has been denounced as feudal bondage by Sinn Fein and Ireland's vociferous eurosceptics. The Irish voted "No" to both the Nice and Lisbon treaties before being made to vote again. Dublin has ruled out a second vote this time.
The Taoiseach's announcement sent the euro into sharp dive against the dollar, though it rebounded later. Europe's leaders thought they had tweaked the wording of the text just enough to avoid an Irish vote.
Ireland cannot stop the process since a quorum of 12 states brings the treaty into force, but it would be politically untenable to create a new eurozone structure that left one member in limbo.
German Chancellor Angela Merkel reacted with fury last November when Greece, which on Tuesday night approved €3.2bn of new budget cuts, unexpectedly called a referendum on the terms of its bail-out. Ireland's move may also rankle, even if deemed less capricious.
The fiscal compact has totemic significance in Berlin and any sign that the package is fraying may harden opposition in the Bundestag to further EMU rescue measures. Mrs Merkel suffered a serious blow on Monday when she had to rely on opposition votes to pass the Greek loan package due to mounting defections in her own ranks. Her coalition base is in revolt over demands from Brussels and the International Monetary Fund for a boost in the EU rescue machinery (ESM) to €750bn (£635bn), the unspoken condition imposed by the rest of the world for unlocking global aid.
Any decision has been postponed until after this week's EU summit. The new requests would push the German share of the funding to well over €300bn, breaching a €211bn ceiling set by the Bundestag in September.
Ireland will continue to receive loans under its €67bn package from the EU-ECB-IMF "Troika" even if it votes "No" but would be in serious trouble if it needed a second package later. The fiscal compact forbids to use of the ESM bail-out fund for non-signatories.
While Ireland's vibrant exports have helped pull the economy out of a death spiral, austerity is still biting deeper. Dublin house prices fell another 4pc in January from a month earlier and are down 57pc from the peak. The money supply is imploding, with real M1 deposits falling at a 9.2pc rate over the past six months.
There was further bad news in Spain, where it emerged that relapse into recession and ballooning deficits in the regions had pushed the budget deficit to 8.5pc for last year, far above the 6pc target.
The new government of Mariano Rajoy has concluded that it would be "suicidal" to try to slash the deficit to 4.4pc this year to meet EU demands, fearing that it would drive unemployment to 6m, or more than 25pc. Budget minister Cristobal Montoro warned that it would require €43bn of fiscal cuts to comply, but his request for easier terms met a stony response from Brussels.
Portugal won Troika approval for the next tranche of money under its €78bn loan package, despite the risk of slippage as recession deepens. "We will not ask for more time or money. There will be no such signal coming from this government," said finance minister Vitor Gaspar.
Mr Gaspar defended his orthodox policies from a chorus of critics who say that draconian fiscal cuts will push the economy into a tailspin and prove self-defeating. "Austerity is needed to prevent an even more savage and uncontrollable austerity," he said.
The ECB temporarily suspended Greek debt as collateral for bank refinancing, after S&P declared Greece to be in selective default.
and the morning news in Happy Land ...
http://www.athensnews.gr/portal/1/53634
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 1. MPs BACK CUTS The cabinet has backdated the minimum wage cuts, so that they will take effect on February 14. In a move that will not require any further parliamentary approval, ministers imposed a 22 percent cut on the standard minimum monthly wage of 751 euros. For those under the age of 25, the cut will be even more brutal, a 32 percent reduction. In addition, it imposed wage freezes on certain categories until the unemployment rate, currently 21 percent, falls below 10 percent. With an overwhelming majority, MPs voted on Tuesday night to slash the minimum wage and chop pensions, in line with the conditions attached to the second bailout memorandum. Out of the 283 deputies present, 202 voted in favour of the bill, 80 against and one deputy abstained. Pensions over 1,300 euros will also be slashed by 12 percent, while so-called supplementary pensions, which are paid for out of workers' own contributions, will be slashed by up to 30 percent. 2. MILLION EURO MP Former foreign minister Dora Bakoyannis has angrily rejected claims that her husband exported one million euros of family money out of the country. Bakoyannis called the claims "slanderous" and "farcical" - insisting that her husband, businessman Isidoros Kouvelos, had transferred money to London after selling shares in the United States. The money was used to buy a merchant ship. The remarks ended weeks of speculation over which MP had allegedly withdrawn money from Greece at the height of the financial crisis. "It is inconceivable that the business activities of my husband ... can be misused in connection with my political activities in such a slanderous way," said Bakoyannis, who heads the Democratic Alliance party. 3. ANTI-EU WARNING The president of the European Parliament, Martin Schulz, has urged Greece and Germany not to abandon decades-long efforts to build friendship dues to strains over the financial crisis. Schulz, a German socialist, met with Greek political leaders before speaking in the parliament. "It has been painful for me to watch as a country which was once so passionately pro-European turns its back on the European Union in disappointment and anger," he told lawmakers. "I have been profoundly shocked by the images of people giving vent to their despair by burning EU flags on the streets of Athens." Schulz also said it was essential for Greece to remain in the euro: "Greece must remain in the euro. This is in the interest of your country but also for Europe." 4. STRUCTURED BONDS TRIAL All sixteen defendants in the first-instance trial concerning the case of the unstructured bonds sold to state pension funds in the period from 2001 to 2007 were unanimously acquitted on Tuesday. The trial opened last June and concerned the fixed-rate bonds issue bought by the managements of six social insurance funds. The defendants in the case were 11 board members of the funds in question and the representatives of four brokerage firms involved in the transactions. The arrangement that was brokered by the government attracted heavy criticism after it emerged that the bonds were bought by state pension funds at very high prices. 5. NEW PARTY Former economics minister Louka Katseli indicated on Tuesday she will form a breakaway socialist party before the general election, arguing that Pasok has alienated its traditional supporters. "It is something we are discussing. There is nothing that I can announce at the moment," Katseli told Skai television. Katseli, 60, was expelled from Pasok's parliamentary party this month along with 21 other MPs this month after voting against new austerity measures needed for the country’s second bailout. 6. REPARATIONS The government sees the issue of German war reparations as an open matter and it raises the issue regularly within the framework of bilateral meetings with the German authorities, Foreign minister Stavros Dimas said in a document submitted to parliament on Tuesday. He also said that the government is studying a recent International Court of Justice ruling on the case taken by the relatives of the victims of the Distomo massacre to confiscate of German property in Italy. 7. STRIKE IN UNIFORM Police officers, firefighters and coastguard officers in uniform held a demonstration outside the finance ministry in Athens on Tuesday protesting against the cuts to their monthly salaries included in the new memorandum. Union representatives said that salaries in the sector were cut by more than 40 percent in the past year and underlined that they will resist the new economic measures prepared by the government and the troika. 8. DOCTORS STRIKE State hospital and private doctors will hold a nationwide, 24-hour, strike on Wednesday in protest against a draft law implementing measures concerning the national health system, including measures designed to increase use of generic medication and prevent doctors from prescribing drugs based on their brand name. 9. NEW BUILDING REGULATIONS A new and much-simplified procedure for issuing building permits will go into effect from this Thursday. Under the new procedure, applications for a permit will be submitted to the relevant municipal building service, accompanied by a site map and the building plan, as well as proof that the necessary fees have been made. If these are in order, outline planning permission will be issued within five days. The interested party must then submit the other necessary documentation, such as architectural and engineering plans, wiring details etc. The building service then checks to see that the application is complete and all the necessary studies have been carried out, before issuing full planning permission within two days. | |||||
