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The state of the nation

  • 13-03-2009 2:29pm
    #1
    HermitHorace
    Closed Accounts Posts: 64 ✭✭


    Unfortunately our current situation is a necessary fiscal purge, a financial reformation which will have devastating consequences for many, espcially those who joined the bandwagon late in the day.

    We'll all come out of this wiser with our trust in financial institutions and government correctly altered to just above minute.

    So will the emergency budget be sufficent? - This will hopefully re-allign our deficit to something more manageable and whilst we can show that we are making strides towards easing our overspending and increasing our tax width - the main crux of the matter lies with the banks.

    Confidence comes with knowing where we are and where we are going. Can we say that the banks are now secure?
    Has the bad debt been catered for?
    Can we say even if unemployment touches the 15% mark that with our new budget we are are capeable of coping over the next 3 years?

    We have been slow starting our resolution and now we need decisive action, some hard cuts have been made but can we steady the ship?


Comments

  • #2
    Flamed Diving
    Closed Accounts Posts: 6,609 ✭✭✭Flamed Diving


    I would like to know where all this private debt went. The major banks seem to have taken the hit better than I expected, but I remember Ireland having the highest (per capita) private debt in the world. That's surely gonna take a long time to clear unless the govt take the full brunt.


  • #3
    HermitHorace
    Closed Accounts Posts: 64 ✭✭HermitHorace


    Thats down to the banks and how the bad debts are managed and whether if they decide to create a 'toxic' bank or simply for each bank to manage their own.

    You would hope that at least by now, the banks have some handle on what level of losses they can expect and they should be able to provide a clear financial strategy going forward.

    Surely there are no more major suprises ahead..


  • #4
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Flamed Diving wrote: »
    I would like to know where all this private debt went. The major banks seem to have taken the hit better than I expected, but I remember Ireland having the highest (per capita) private debt in the world. That's surely gonna take a long time to clear unless the govt take the full brunt.

    http://www.tribune.ie/article/2008/dec/28/why-ireland-remains-at-debts-door/
    The state faces the prospect of two debt burdens: its citizens, after overpaying for property, carry a huge amount of private, mostly mortgage, debt. Private indebtedness reached about 250% of GNP last year, equivalent to a private debt pile of over €400bn. Now, public debt is also soaring. Rising levels of sovereign debt will require more taxation, more money borrowed abroad to plug annual deficits and, ultimately, much lower living standards for citizens in the years ahead.

    I believe that 80% of that private debt is mortgage related. The housing bubble has destroyed this country.


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