John Bruton

Opinions & Ideas

Month: November 2011

SINGAPORE, MALAYSIA, KOREA AND JAPAN…FOUR COUNTRIES IN FIVE DAYS

I am visiting East Asia this week with a delegation from the Irish Funds Industry Association. Ireland is in one of the world’s leaders in the creation, registration and administration of investment funds In the last 25 years Ireland has become the international fund hub for investment managers from over 50 countries and from an Irish base these managers distribute their funds worldwide with Asia becoming a particularly important marketplace. In fact in some instances and most recently up to 40% of the investments in Irish based funds are coming from Asia.
These funds include the widest range of investment strategies ranging from ones with a conservative fixed income goal, to ones which aim at higher yields and invest in growth sectors. The industry provides 10000 jobs directly in Ireland, and many more indirectly through legal, accounting and auditing firms. It benefits greatly from Ireland’s EU membership, which provides Irish based funds with an EU regulated investment product and a capacity to compliment services all over the world.
Singapore is, in many respects, the crossroads of Asia. In fact it is the second largest port in the world.  I met the Governor of its Central Bank and the leaders of its two big Sovereign Wealth Funds.   Singapore is a place from which investors can observe, and take part in, developments in the most dynamic part of the world. Asia is not unaffected by the debt crisis in the west. If European banks were to dramatically curtail lending in Asia that would slow development here.
Our visit to Malaysia focussed on the rapidly developing sector of Islamic finance. Because Islamic rules forbid the charging of interest, other ways are found to ensure that those providing the finance  share in the fruits of the endeavours they support.
Ireland has put in place a legal and regulatory system that has allowed the country to become the venue for the creation, registration and administration of Islamic funds, alongside the conventional funds in which we already are a world leader. There are many further opportunities for Ireland in Islamic finance. We need to realise that the Islamic market is much bigger than the Middle East and includes huge populations in Indonesia, India, Pakistan and Malaysia, as well as 50 million Muslims in Europe
Korea is a country the size of Ireland, but it supports almost 50 million people, as against Ireland’s 5 million. Its recovery after the devastation of occupation and war in the first half of the twentieth century is one of the true miracles of human development.
Unemployment is only 3%, and 80% of young Koreans obtain third level education, at enormous financial cost to themselves and their families. Korea and Singapore consistently top world rankings for educational attainment among second level students. But many well educated young people find themselves unable to find high status jobs which they feel are appropriate to their qualification level, and to the debts that have been incurred to attain it.
Japan has  had  the experience that  western countries  are now having, a real estate bubble leading to a crash, a big increase in Government  debt and a  very slow recovery.  Real estate prices peaked in 1991.  After that there was a crash which brought down the stock market as well. Government debt has now reached  225% of GDP, higher than  almost anywhere in the world. But most of the money is owed to the Japanese people themselves.
There is scope to close the gap between  revenue and spending.  Japan is a low tax country. VAT rates are only 5% and many workers are outside the income tax net. The Japanese birth rate is so low that the population is falling.
I spent a considerable portion of my time explaining the reasons for the crisis in the euro zone and possible remedies. Many of the countries here had similarly severe financial crises   ten years ago, but have recovered very well.
As in Europe, the ageing of the population is a concern in some East Asian countries. Birth rates in some of the countries are very low, so the size of the elderly population, that will have to be  supported by a diminishing working population, is set to grow rapidly here, as  in Europe. That is why saving is so important for many Asian families.
Some interesting views were expressed to me about neighbouring countries.
China is expected to have short term economic problems arising from its mistaken policies of subsidizing the consumption of energy. On the other hand, it plans to build a huge number of new cities, The number of big cities in China is to grow from  90 to 280, which could  open up big opportunities for Irish  firms with construction, engineering and  infrastructure financing expertise.
India’s economic growth has stepped up considerably, but is still constrained by too much regulation. Unlike China, it still has a literacy problem. It too will see major new urban development.
Indonesia has a lot of growth potential, but the Philippines  suffers from an oligarchic and paralysed system of  government,
There was much criticism of global banking rules which are pro cyclical, in the sense that the add to  the contraction of the economy when it is in a  downturn anyway, and  exaggerate expansion when  things are going well anyway. This topic is being ignored in the European Union at the moment.

THE EURO CRISIS- A CHALLENGE FOR BOTH PARTS OF THE ISLAND

Speech at a meeting of local authorities from  North and South, organised by Cooperation Ireland, in the  Knightsbrook Hotel, Trim Co Meath at 5.45 pm on  Wednesday 16th November  
I want to speak to you today about the crisis facing the euro, a crisis that has implication for both the part of Ireland that is in the euro, and the part that is not, but which relies on the European market for its commerce.
The views I will express are personal ones, and not representative of any organisation with which I am associated.
I will start my speech with a quotation from Martin Wolf in today’s Financial Times.
He says
“What is at stake today is not only the stability of the European, and perhaps the world’s economy, but the most successful and certainly most civilized effort to unite Europe since the fall of the Roman Empire 1535 years ago”
He goes on to criticise what the calls the “just enough, just in time” approach of EU leaders to dealing with the  rapid loss of confidence in  the sovereign bonds of euro zone countries. This approach has turned out to be  too little, too late.
At this stage, I believe we  need the outline of a comprehensive  solution, with a timetable for its implementation, at the level of each of the  17 euro zone member states and at  euro zone level. Each must fit into , and be contingent  upon the other.  17 national plans and one European  plan, synchronised each with one another, would give the markets  a sufficient  sense of direction  that   they would  stop their  destructive  fear driven flight from the bonds of one  European country after another.

WHY IS IT THAT EUROPE IS UNDER PRESSURE, WHEN ITS DEBTS ARE LESS THAN UNITED STATES DEBTS?

This year the euro area countries governments combined will have a budget deficit of 4.5% of GDP, whereas the United States Government will run a deficit of about 10%.
In the eurozone, the aggregate Government debt to GDP ratio is 87%, whereas in the US it is 100%
In all the eurozone countries, while there is some difficulty in some countries in implementation because of low growth rates and vested interests, there is broad agreement on measures to  reduce these excessive deficits and debts where they exist, whereas in the US the Congress and the President  cannot agree at all.
 In that sense, the eurozone has the makings of  a plan,  whereas ,so far, the US has none, just a deadlocked all party committee of politicians who are trying to  place  one another in a false position. So why then is it Europe that has a problem, and not the  United States?
The United Kingdom has  an even bigger debt/deficit/and private  borrowing problem that the euro zone  has on average, and yet it is regarded as a safe haven while lenders flee from Italy, which actually has a primary surplus, that is to say that, apart from interest payments, its Government  revenue exceeds its  spending .

THE FOUR REASONS

So why then is it that all the pressure is on euro zone debts, and not on US or UK debts?

1.)    Although they is  not willing to do so just now, the US Federal authorities have the legal capacity to levy taxes  to pay off  debts, whereas the  EU does not itself have that ability. It has to rely on its individual member states to raise the taxes.

2.)    There are bigger problems with Europe’s banks. The gross debt of the eurozone banks comes to 143% of zone’s GDP, whereas US banks debt only come to 94% of US GDP. Furthermore eurozone banks owe twice as much, proportionate to their assets, as US banks do.

3.)    The assets of  eurozone banks are  disproportionately in the form of bonds issued by  Governments.  So if Governments are in financial trouble, that means trouble more trouble for banks in Europe, than would be the case for banks in the United States.  In Europe the banks problems are the Governments problems and vice versa, in ways they are not in the United States. This unhealthy situation was, in part, the perverse result of rules designed to make banks sound, which  encouraged banks to buy Government bonds as reserves, but which assumed, wrongly, that  Government bonds were risk free.

4.)     The US Federal reserve can, and does, ease money supply ( print money) to keep the economy moving, whereas the  EU Treaties make it much more  difficult  for the European Central Bank to  do this, partly because of historic  German fears of inflation. For example, article 123 forbids the ECB to extend credit to member states. In a sense, it could be said that the  euro  was designed as a “fair weather currency”,  rather than be able to  cope with foul weather too.

WHAT IS TO BE DONE?

As I said earlier, I believe the euro zone needs a   five year plan, synchronising  what is to be  done at EU level, with what is to be done at the level of each of the 17 member states.
Not everything in these plans needs to implemented immediately, so long as people believe it will actually be implemented in a reasonable time.
 The crisis we face is really as much a crisis of belief, as it is a crisis of finance. The finance is actually there, but the belief is not, at the moment. Part of the reason for the lack of belief is that markets sense that there is no shared analysis among European leaders about what is to be  done.
Germans and their allies initially seemed to believe   that the sole problem was one of   foolish and blameworthy borrowers . Now all recognise a that the problem is also one of foolish and  blameworthy lenders . That is why a haircut is being imposed on Greek sovereign bond holders. Understandably that has led to fears among bondholders of other states . That was foreseeable and must be catered for.
There is also the belief that , if everybody adopted the  German model of  super competitiveness, reducing  wage costs and enhancing savings, we could come through the difficulty. The difficulty with this is that approach is twofold
  *Germany already is an export oriented economy, the eurozone as a whole is not (in fact it exports as little proportionately as the US does)
  *For Europe, or Germany, to run an export surplus to pay off its debts, someone else somewhere must be able to run an import surplus, and someone must be willing to finance the borrowing undertaken to finance that import surplus. It is not obvious who that will be. Both the US and China are cutting back.
For these reasons, I find the prescriptions for Europe laid out in the resolution on Europe, passed at the  CDU Conference this week in Leipzig,  incomplete and unconvincing.
  *They are right to condemn deficits, but wrong to ignore chronic surpluses that create those deficits.
  *They are wrong to rule out a euro bond unconditionally.
  * They are wrong to try to change the voting weights in Europe in favour of big countries, but right to say that Europe needs more democracy and that the EU President should be elected by the people, not selected on a take him or leave him basis by heads of Government meeting in private

FOUR PROPOSALS

1.)The first thing that needs to  be done is to give the ECB the discretion to act as  the British and US central banks do, and be a lender of last resort. This will involve, in effect, printing money. In the very long run, that may build up inflationary pressures. But we will have time to prepare for that. I fear that if the ECB  does not exercise wide discretion now, there will, in effect, be no long run for Europe’s economy.
The ECB must act unpredictably,  and with discretion, if it is to discipline the markets and return them to sanity. It must also act independently of Governments, so that no Government can rely on the ECB buying its bonds , as a  substitute for  getting its own  finances in order.

2.) The second thing we need to do is deal with Europe’s banking problem.
 Our banks have been allowed to grow  too big  to fail,  relative to the small size of the tax bases of some of the  countries who implicitly  or explicitly guarantee their depositors.
Banks should be in a position that they can be allowed  to fail, like other businesses.
 If we had a Europe wide retail banking market, a Europe wide deposit guarantee scheme, and a Europe wide banking supervision system (as envisioned in the Maastricht Treaty but strangled by big countries who wanted to  keep prying eyes away from their banks), we could allow banks to fail because few if any of them would be too big to fail in European context. Those that might be too big could be forced to divest themselves of part of their business.

3.) The third thing we need to do is enforce a Eurozone wide system to  remedy economic imbalances. This should include excesses of private borrowing as well as excesses of Government borrowing. It should also address excessive surpluses which often destabilize markets as much as deficits do.
 There are provisions to do all this in the recently agreed EU excessive imbalance procedure, which is not confined, as was the Stability and Growth Pact, to Government finances only.  If there have to be EU Treaty changes in this  field, they must address all types of economic imbalance, not just fiscal imbalances

4.)The fourth thing we need to do is produce a  credible proposal for a  Euro bond that could  act as a much better and timelier means of disciplining  Government borrowing , than fines under the  Stability and Growth Pact ever could.
 I think we will only get our economies going again, if we can restore belief in a fixed measure of value that will provide a capital base for banks, the role that gold performed in the past, and which the  sovereign bonds of wealthy countries  did until recently.
That is where the proposal for a euro bond could be helpful.  It could be a lot more than a short term fix. It might work as follows.
All the 17 euro area Governments could agree that they would all mutually guarantee the repayment of a new collective euro bond, and that in addition it would have first call on (say) a fixed share of all VAT receipts.
 They might also agree that, while no euro area country would be obliged to issue euro bonds, it could do so in limited circumstances, namely.
a,) that its  budget law, and five year projections, had been approved in advance by the European Commission and 
b.) the euro  bond  could only be issued  cover a limited  proportion of its total borrowing, as long as their overall debt/GDP ratio was more than (say) 60%.
This would have a number of advantages.
It would guarantee a minimum borrowing capacity to all euro area states. Because of the collective guarantee, the interest rate on the euro bond would be less than that on most national bonds.
It would, however, penalize countries for allowing  their  debt /GDP ratios to be  over 60%, because they would be forced to borrow commercially  and pay higher rates of interest on the  extra borrowing, which would be a strong incentive to them to  get their debt level down as quickly as possible to  40% or below. That would be a better discipline than retrospective fines, which are the form of discipline we now rely on.
Because it would be guaranteed by all euro area Governments, and have a prior call on VAT receipts,  the new euro bond would have real credibility globally, as well as within the EU.
Banks who held such new euro bonds would then  have something of real and certain value in their capital base, on the strength of which they could confidently base their lending  decisions. In that way, credit would start flowing again, jobs would be created and permanent structural damage to our economies avoided.
If this happened, Europe, rather than being the world’s economic problem, could be the provider of part of the world’s economic solution

WHY IS IT THAT EUROPE IS UNDER PRESSURE, WHEN ITS DEBTS ARE LESS THAN UNITED STATES DEBTS?

This year the euro area countries governments combined will have a budget deficit of 4.5% of GDP, whereas the United States Government will run a deficit of about 10%.
In the eurozone, the aggregate Government debt to GDP ratio is 87%, whereas in the US it is 100%
In all the eurozone countries, while there is some difficulty in some countries in implementation because of low growth rates and vested interests, there is broad agreement on measures to  reduce these excessive deficits and debts where they exist, whereas in the US the Congress and the President  cannot agree at all.  The  eurozone has a plan, so far the US has none.
THE FOUR REASONS
So why then is it that all the pressure is on euro zone debts, and not on US debts?
  1. Although they is  not willing to do so just now, the US Federal authorities have the legal capacity to levy taxes  to pay off  debts, whereas the  EU does not itself have that ability. It has to rely on its individual member states to raise the taxes.
  2. There are bigger problems with Europe’s banks. The gross debt of the eurozone banks comes to 143% of zone’s GDP, whereas US banks debt only come to 94% of US GDP. Furthermore eurozone banks owe twice as much, proportionate to their assets, as US banks do.
  3. The assets of  eurozone banks are  disproportionately in the form of bonds issued by  Governments.  So if Governments are in financial trouble, that means trouble more trouble for banks in Europe, than would be the case for banks in the United States.  In Europe the banks problems are the Governments problems and vice versa, in ways they are not in the United States. This unhealthy situation was, in part, the perverse result of rules designed to make banks sound, which  encouraged banks to buy Government bonds as reserves, but which assumed, wrongly, that  Government bonds were risk free.
  4. The US Federal reserve can, and does, ease money supply ( print money) to keep the economy moving, whereas the  EU Treaties make it much more  difficult  for the European Central Bank to  do this, partly because of historic  German fears of inflation. For example, article 123 forbids the ECB to extend credit to member states. In a sense, it could be said that the  euro  was designed as a “fair weather currency”,  rather than be able to  cope with foul weather too.

COMMEMORATIONS SHAPE OUR FUTURE……….

IRELAND SHOULD REMEMBER 1913 AND 1914,  AS WELL AS 1916


2011 is the centenary of the Ulster Covenant, 2013 is the centenary of the Dublin lockout, 2014 is the centenary of the passage into law of Home Rule, and 2016 will be the centenary of the Easter Rising . 

How, or whether , we commemorate events that happened 100 years ago will tell us
        who we are now, and
        who we intend to be in the future.

Commemorations are, above all, educational exercises. They inculcate values, for good or ill. They can unite, they can also divide.
For this reason, I argue that, as well as commemorating  1916, in 2016, we should also commemorate the  1913 lock out in  2013,  and  the passage of Home Rule in 1914 in September 2014.
The men and women of 1916 were incredibly brave, they knew they were facing death. That bravery must be saluted. It inspired future generations.  So too did the idealism of those involved, which was eloquently expressed in the writings of Patrick Pearse. One must also recognise that, although it failed in its  immediate goals, the  rising was a  feat of organisation, that showed  what Irish people could do, and  countered the stereotypes about Irish people that were prevalent at the  time.  It gave confidence to those who founded the new state five years later.
In this generation we have, at last, reached a political accommodation between Unionism and Nationalism on this island. That was something that eluded successive previous generations of politicians. It eluded O Connell, it eluded Davis, it eluded de Valera, just as it eluded both Collins and Redmond.

Nothing must be done or said now, in any of our retrospections in 2016, that would put that very  recent reconciliation of Unionism and Nationalism at risk .
While we remember what  happened in Dublin in April  1916, we must not forget  that  other  great sacrifices were  by Irish people  in  the same year , notably the inspiring bravery ,and appalling  sacrifice,  in the Battle of the Somme, and  of other battles in  Northern France, where  thousands of Irishmen  gave their lives . Many of them hoped, as did Tom Kettle MP, who was killed in the same year, that the shared sacrifice in France, of Unionist and Nationalist soldiers, would heal the divisions between their communities at home. 
Nor, when we commemorate the 1916 Rising, should we forget the uninvolved civilians, the police,  and others who had no choice in the matter, who lost their lives or their livelihoods in  Easter week in  1916 in Dublin. Their sacrifice was all the more real for being unsought.
But Irish history is not predominantly about battles. We   must ensure that our commemorations do  not  focus  only on physical force, whether on the fields of France or the streets of Dublin. 
I believe it is really important, if we are to learn the right lessons from history, that we salute those who lived for Ireland, as well as those who died for it.
We must remember those who worked for decent living conditions and a more egalitarian society, people like Jim Larkin and William O Brien.  There will be an occasion to do that in 2013, the centenary of the Lock Out. The Irish Trade Union movement and its achievements must not be eclipsed by other commemorations, as they were for many years.
We must also properly commemorate the patient, peaceful and exhausting work for Irish legislative independence of Isaac Butt, Charles Stewart Parnell, John Dillon, John Redmond and Joe Devlin.
The time to do that will come on the 18thSeptember 2014, which will be   the centenary of the passage into law of Home Rule. The struggle for Home Rule had begun 40 years before at the Conference in Dublin, attended by 800 delegates,which established the Home Rule League, yet many people today forget that Home Rule was actually passed into law. Its implementation was postponed by the Great War, that was all.
40 years patient and skilful   parliamentary work, exploiting the weaknesses of opponents but also making judicious compromises, rallying support abroad while keeping support at home mobilized, culminated in the passage of the Act into law in 1914.  The passage of Home Rule was a triumph of democratic, non violent, politics.  Obtaining Home Rule in 1914 required the same qualities that John Hume exemplified in more recent times.
The Act was for Home Rule for all of Ireland, although the possibility of temporary exclusion of some Ulster counties was mooted.  After the passage of the Act the principle of Irish legislative independence had been irrevocably conceded, even by the Conservative and Unionist  party of the UK. This was something that was unthinkable even a few years before.

Continuance of Irish representation at Westminster under Home Rule, would have meant that total separation had not been achieved, but, on the other hand, that greater Irish parliamentary   influence at Westminster, would have made discriminatory policies, of the kind that occurred under Stormont from 1922 to 1972, totally impossible. 
It is important, therefore, that Home Rule be commemorated, as a complement to the commemoration of Easter Week.
Today’s problems of Ireland, are ,in truth,  more susceptible to being solved by   the patient peaceful political methods, of the kind  deployed by Irish Home Rule advocates between 1873 and  1914, or , if necessary by the peaceful protests  of the kind deployed by Irish workers in  1913 ,  than they are  to  be are  by the methods used in  1916 .
As I said, commemoration is a form of education for the future. That is why we should remember 1913, and 1914, as well as 1916.

Upstart; Friends, Foes and Founding a University

The title sums up this book well. The foes seem to get more attention than the friends, in this entertaining account of the authors struggle to set up the University of Limerick.
At the age of only 30, as a young Ph D from the University of Iowa, Ed Walsh returned to Ireland to set up the proposed institute of higher education in Limerick. He had been previously excluded from consideration for a professorship in UCG in favour of an internal candidate, because he was not considered sufficiently proficient at teaching neutron physics, through Irish.
 The fact that  in  1969  the Department of Education entrusted the  setting up what was to become eventually  the first new university of an independent state ,  to someone, who himself was  barely out of college, is sign of the occasional  adventurousness of Irish officialdom at that time. It is necessary to say that, because the book is otherwise full of tales of bureaucratic obstruction.
Ed Walsh is a native of Sundays Well in Cork, and his father was a successful butcher. He accompanied his father to fairs to buy cattle, and recalls the soon to be forgotten ritual of the fair day.
 His mother’s family were from Kanturk, and her mother came to live with the authors parents shortly after they married. This difficult dynamic of this situation is well described, and young Ed does not appear to have been a particular fan of his grandmother!
He studied engineering in UCC before going to the University of Iowa, where he absorbed many innovative ideas about the organisation of higher education. He married Stephanie Barrett, the daughter of the late Stephen Barrett TD, in 1966.
His early struggle to get a building and to  recruit staff for the new institute in Limerick involved getting sanction for every individual move from the Department of Education. It also required occasional interactions with local politicians, including being offered poitin at the hospital bedside of the late Stevie Coughlan TD, who had apparently been hospitalised to dry out. Both Stevie, and his son Thady, were very effective supporters of the institute at crucial times.
In recruiting staff for the new institute, he decided to look abroad, and gave no preference to existing Irish academics, something he feels caused enduring resentment.
He pioneered a modular system and the incorporation of work experience into courses. This required a lot of contact with businesses by academic staff, which improved the relevance of their teaching, and thereby helped the institute to achieve one of the best employment rates among its graduates of any Irish third level institution.
He also broke with then academic practice by insisting that the deans, who would head up the various faculties, would be selected by him, rather than elected by colleagues. This meant that the people chosen, put students and the overall needs of the institution first, rather than prioritizing  those on whom they had relied to get their job.
When Limerick eventually achieved University status, he had to work very hard to maintain this system, because a coalition of union and party political interests on his governing body felt that being a university meant that one was now entitled to adopt some of the bad practices of existing universities.
He is scathing about the protectionist attitudes built up around the Irish language, and in particular the insistence of many officials of the Department of Education on using the Irish version of their name.  As he put is, decent men, known to their families as Paddy or Kevin, entered a kind of unholy priesthood once they passed through the gates of Marlborough Street, becoming Padraig or Caomhin, and learning to drop the occasional phrase in Irish into conversation, to give signals that only the inner circle could decipher.
The final push to get, for Limerick, University status, and the right to award its own degrees, seems to have been a bitter struggle.  Existing universities felt that the government was not allocating enough to higher education as it was, and that another new university would further dilute what was available.  Ed Walsh believes his own alma mater, UCC, played a particularly hostile game, which he describes in detail.
In later years, Ed Walsh’s notable success has been as a fundraiser  for  his University. Chuck Feeney and Atlantic Philantrophies have been particularly generous. Donors rightly insisted on supporting “extras”, rather than basics. But this sometimes had odd results, like the University having a state of the art concert hall, before it had a state of the art library. 
Gemma Hussey, as Minister for Education, appointed Ed Walsh as chairman of the Curriculum and Examinations Board.  This body was charged with modernising Irish first and second level education. In view of Ireland’s  dramatic   decline in comparative standards in  mathematics and reading, highlighted in the latest OECD report on the  Irish economy, it is disappointing that the book does not  deal with this experience at all. It would be interesting to know if vested interests, who the author so successfully defeated in Limerick, got the better of him in this equally important field.
I was put off initially when I took up this book, because it is laid out as a diary rather than a conventional narrative.  But once one gets into it, it is a good read.  Some of the comments on those who did not agree with what the author wanted, are acid. I expect anyone who has had anything to do with the administration of higher education in the last forty years will be consulting the index to see if they get a mention!

AND NOW A REFERENDUM IN GREECE!


I do not believe those who say there is a choice between austerity and stimulus.
Countries that have borrowed too much, either as citizens, as companies and banks, or  as Governments, have to reduce their debts,  and that means austerity.
The choice is between fast, traumatic, and disruptive austerity, or slow, painful, and deliberate austerity. 
The former will involve much more drama and would be much more unpredictable. It could involve the complete collapse of the banking system.
The latter could involve more austerity in total, but might involve fewer unplanned side effects because burdens could be redistributed over time and managed by Governments working together.
The Greek Referendum will involve a choice between the two options.
If Greeks vote “no” , they will get the first option.
If they vote “yes”, they will get the second.
The Referendum campaign itself will be very difficult to manage.   There will be a huge level of inter action between opinion polls and  bond markets.
A  poll that suggested a “no “ vote could send  bond markets plunging, and plunging markets could  pre empt the result of the referendum and make it irrelevant.
It is very hard to understand the thought processes of the Greek Prime Minister.
Did George Papandreou tell his colleagues at the recent EU Summit, that agreed a deal with him on Greek debts, that the deal was conditional on a referendum?
If he did not do so, then he is acted in such bad faith that it is hard to see how colleagues could do business with him again.  If that is the case, Greece should have a General Election, not a referendum.

COPYRIGHT JOHN BRUTON & CONTENT

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