IMF - Troops of Doom?

BobTheBeat

Of late I've seen that infamous acronym bandied about so much, particularly in relation to how theyre going to .. 'sort out this country', 'do what the government dont have the balls to do' (reference :- pretty much any thread in AH thread relating to the economy).

If they were to be called in, who would do so? Would they act impartially and unilaterally?

I have this vision in my head of men dressed in black suits and bowler hats carrying briefcases, storming the department of finance with calculators that only have minus symbols with chopping 50+% off expenditure being their only remit.
But the more rational side of me imagines a kind of international MABs outfit, here on official business and to work with the government and implement strict economic policies and trimming the fat, free of political ties. But ultimately would be concerned with the fact that at the end of all of this are people that need to survive on whatever changes are made to their paypacket.

A little from column a and b perhaps?

Liam Byrne

They might make some tough, unpalatable decisions, but at least they wouldn't have a "bail out their buddies" agenda.

SkepticOne

bobmeaney wrote: »

If they were to be called in, who would do so? Would they act impartially and unilaterally?

The government would call them in when they could no longer raise money elsewhere to pay the country's bills. There would be certain conditions attached (e.g increase taxes, cut spending) to the loan that would have to be negotiated between the IMF and the government before the loan is offered.

The government don't have to deal with the IMF and the IMF can't force anything on the country that the government doesn't agree to. Likewise, however, the IMF doesn't have to bailout the country.

Liam Byrne

SkepticOne wrote: »

The government don't have to deal with the IMF and the IMF can't force anything on the country that the government doesn't agree to.

Bugger! So the one possibility for fairness and transparency is a non-runner ?

Time Magazine

Liam Byrne wrote: »

fairness

The IMF. Fairness?

Lol.

Liam Byrne

The Economist wrote: »

The IMF. Fairness?

Lol.

I'm talking relatively; i.e. fairer than FF.

ei.sdraob

Liam Byrne wrote: »

I'm talking relatively; i.e. fairer than FF.

they wont be fairer the would do what it takes to

1. get their money back (at high interest)

2. slap the economy into shape so they dont have to do it again, since they are not elected they wouldnt squirm at making drastic cuts

3. shape the economy to suit the US (IMF is a US puppet and is used to give the US an advantage)


On one hand IMF coming in would put is back on the track to recovery
on the other hand that would come at a great cost and many strings attached


hence the need to sort this mess out ourselves as the alternative wont be pretty

Martyr

IMF would want "structural adjustments" ..things like water, electricity, hospital and transport privatization, such has been seen in poor african and south american countries.

if people in the public sector think FF are bad with cuts, just wait and see what the IMF would do..

Sand

The IMF gets a bad reputation, but thats because people confuse it with a charity.

Democracies like ours tend to have real difficulty making hard decisions, because making a tough but necessary decision is never going to win you votes. You might get the respect of taxpayers, but you earn the wrath of special interest groups.

IMF intervention is very likely because who sees Fianna Fail or Fine Gael or god help us, Labour, having the balls to force through the sort of rationalisation of social welfare and the public service that everyone knows has to come in this country?

Theyll all prefer to play local politics instead, like the Sligo Two, and wait for the adults in the shape of the IMF to come along to make the hard decisions so they can do a Kevin "Thats SOOOOOOOOO unfair!"

Its the same with all the other countries the IMF has to bail out. A failure of national politics, and blaming the IMF for forcing people to grow up and face reality.

tlev

I'd take the IMF over FF any day of the week.

ei.sdraob

tlev wrote: »

I'd take the IMF over FF any day of the week.

they certainly can not screw up anymore than FF

Dirk Gently

Sand wrote: »

Its the same with all the other countries the IMF has to bail out. A failure of national politics, and blaming the IMF for forcing people to grow up and face reality.

Wasn't Ireland the poster boy of the IMF as recently as 2007, what with our sound national political leadership and economic policies. (according to them) Did they not predict continued growth for us in the medium to long term. It would seem everything this government done was with the blessing and encouragement of the IMF. Somewhat ironic that they are now championed as our saviours.

ei.sdraob

clown bag wrote: »

Wasn't Ireland the poster boy of the IMF as recently as 2007, what with our sound national political leadership and economic policies. (according to them) Did they not predict continued growth for us in the medium to long term. It would seem everything this government done was with the blessing and encouragement of the IMF. Somewhat ironic that they are now championed as our saviours.

FF lied to the people, the IMF and just about everyone else

kevteljeur

clown bag wrote: »

Wasn't Ireland the poster boy of the IMF as recently as 2007, what with our sound national political leadership and economic policies. (according to them) Did they not predict continued growth for us in the medium to long term. It would seem everything this government done was with the blessing and encouragement of the IMF. Somewhat ironic that they are now championed as our saviours.

First off all, I suspect that countries needing loans are good business for the IMF. I'm pretty sure that interest is good for them. They are the international loan sharks. They're happy to big up Ireland, and if Ireland takes a fall which needs high-interest help, all the better.

I'm also not seeing any informed support of the IMF as our saviours, either; it's more like someone giving the bank the finger after a failed loan application, and championing the local loan shark while everyone else coughs uncomfortably and looks away in embarrassment. Sorry for the abuse of metaphor.

Personally, I think that being in Eurozone might prevent us from any bailout by the IMF; that's not to say that anyone else will bail us out, just that we'll have to sort it out by ourselves. If the situation deteriorates further, expect Cowen (or whoever is charge at that stage) to be summoned to Berlin for a stern talking to, followed by further cuts, as per the previous emergency budget.


.

Executive Steve

ei.sdraob wrote: »

FF lied to the people, the IMF and just about everyone else

No, the very fact that the IMF have to be called in to a country that prided itself on being "closer to Boston than Berlin" is a savage indictment on pretty much everything the IMF represent.

It's time for some fresh thinking.

irish_bob

[cm]tyranny wrote: »

No, the very fact that the IMF have to be called in to a country that prided itself on being "closer to Boston than Berlin" is a savage indictment on pretty much everything the IMF represent.

It's time for some fresh thinking.

what are you suggesting , voting NO to lisbon unless the IMF adopt more of a left wing ethos , do you think we have any power to change how the IMF is run , the post about how fianna fail lied to the IMF was right , you only have to look back to severa weeks ago when cowen claimed the international money bags gave us an A plus when in reality they gave us a C and told us we needed to cram like never before

Time Magazine

Liam Byrne wrote: »

I'm talking relatively; i.e. fairer than FF.

I doubt it.

Martyr wrote: »

IMF would want "structural adjustments" ..things like water, electricity, hospital and transport privatization, such has been seen in poor african and south american countries.

They would not want water privatisation, or electricity network privatisation, or hospital privatisation. They would be stupid ideas in a small, developed economy. Transport privatisation would be fantastic for this country, but I doubt the IMF would care about that.

Poor African countries are a different kettle of fish to Ireland, and the IMF know it. I don't know why you assume they don't.

ei.sdraob wrote: »

they certainly can not screw up anymore than FF

Yes, they can.

clown bag wrote: »

Wasn't Ireland the poster boy of the IMF as recently as 2007,

Not really.

kevteljeur wrote: »

First off all, I suspect that countries needing loans are good business for the IMF. I'm pretty sure that interest is good for them. They are the international loan sharks.

The IMF isn't a profit-motivated business. The interest rates aren't good. They are not loan sharks, they're an international agency that we volunteered ourselves into.

Martyr

The Economist wrote:

Poor African countries are a different kettle of fish to Ireland, and the IMF know it. I don't know why you assume they don't.

What will the IMF do?

kevteljeur

The Economist wrote: »

The IMF isn't a profit-motivated business. The interest rates aren't good. They are not loan sharks, they're an international agency that we volunteered ourselves into.

I stand corrected.



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Time Magazine

Martyr wrote: »

What will the IMF do?

Firstly, would; not will. We're not there yet. Nor do I think we'll get there. And there are additional difficulties with getting there because we don't have our own currency, so we really need to sort this out ourselves or be kicked out of the Euro. However our debt level (as a % of GNP) is still relatively small. We have maybe a couple of years until foreign banks decide that our debt levels are too high to lend more to us. It's then we're in trouble. Hopefully the public/SIPTU/your granny will cop the f*ck on before we hand over our sovereignty to DC.

If we could not pay off our debts, the IMF would give us a loan. Their job isn't to help countries who have run themselves into trouble, but to ensure that those problems don't spread to the people who lent them money. They're not a charity. We currently give the IMF money, who in turn give to nations who have run themselves into trouble, so it's a good thing that they make sure they get their money back.

They would give us a loan and demand changes be made to ensure we pay them back. We're a wealthy nation. We don't need to privatise water supply to ensure we pay it back. What it would mean is higher tax rates (say from 20% to 27% and from 41% to 50%) and serious cutbacks (along the lines of Bord Snip, but more severe, maybe a 20% cut in Dole etc.) so that instead of running serious deficits we'd be running serious surpluses, the vast majority of which would pay off the loan.

There're shades of grey with regard the IMF. The crazy rabid right-wingers need to get this idealistic notion that they'd "put us right" out of their head. They would, but it would come at considerable social pain. The crazy rabid left-wingers need to get this idealistic notion that they'll privatise our babies out of their head. The IMF are not idiots. But if a nation runs up so much debt it requires an international agency to step in to prevent the problem spreading, nobody's going to give them much sympathy. It may have been right-wing policies that got us into mess (debatable, but it may have been); but it would be left-wing policies and unions that would make us call the IMF.

Being honest, to avoid that, the nation need to cop on.

irish_bob

The Economist wrote: »

Firstly, would; not will. We're not there yet. Nor do I think we'll get there. And there are additional difficulties with getting there because we don't have our own currency, so we really need to sort this out ourselves or be kicked out of the Euro. However our debt level (as a % of GNP) is still relatively small. We have maybe a couple of years until foreign banks decide that our debt levels are too high to lend more to us. It's then we're in trouble. Hopefully the public/SIPTU/your granny will cop the f*ck on before we hand over our sovereignty to DC.

If we could not pay off our debts, the IMF would give us a loan. Their job isn't to help countries who have run themselves into trouble, but to ensure that those problems don't spread to the people who lent them money. They're not a charity. We currently give the IMF money, who in turn give to nations who have run themselves into trouble, so it's a good thing that they make sure they get their money back.

They would give us a loan and demand changes be made to ensure we pay them back. We're a wealthy nation. We don't need to privatise water supply to ensure we pay it back. What it would mean is higher tax rates (say from 20% to 27% and from 41% to 50%) and serious cutbacks (along the lines of Bord Snip, but more severe, maybe a 20% cut in Dole etc.) so that instead of running serious deficits we'd be running serious surpluses, the vast majority of which would pay off the loan.

There're shades of grey with regard the IMF. The crazy rabid right-wingers need to get this idealistic notion that they'd "put us right" out of their head. They would, but it would come at considerable social pain. The crazy rabid left-wingers need to get this idealistic notion that they'll privatise our babies out of their head. The IMF are not idiots. But if a nation runs up so much debt it requires an international agency to step in to prevent the problem spreading, nobody's going to give them much sympathy. It may have been right-wing policies that got us into mess (debatable, but it may have been); but it would be left-wing policies and unions that would make us call the IMF.

Being honest, to avoid that, the nation need to cop on.

no one should wish for a visit from the IMF , that would mean people loosing thier savings and deposits , i do however believe FF would perfer the IMF make the severe cuts than themselves , that way the suckers that are a large section of the community will let FF off the hook and forgive them in a mere ten years or so

cdb

The Economist wrote: »

We're not there yet. Nor do I think we'll get there.

A very informative post and I hope it turns out to be the case though given the apparent inability of Cowen & Co. to take any meaningful action, (in terms of what appears to be a lack of conviction in implementing the recommendations of An Bord Snip Nua etc), what would have to change in the coming years in order for us to avoid IMF intervention?

I cannot see this present government or indeed any other government introducing the drastic measures that appear necessary to reign in spending by slashing the huge public sector wage bill for example and reducing borrowing. If this proves to be the case is IMF intervention not inevitable?

Time Magazine

cdb wrote: »

what would have to change in the coming years in order for us to avoid IMF intervention?

It's simple enough. Increase revenue and decrease expenditure.

I cannot see this present government or indeed any other government introducing the drastic measures that appear necessary to reign in spending by slashing the huge public sector wage bill for example and reducing borrowing. If this proves to be the case is IMF intervention not inevitable?

The public sector wage bill is a bit of a wild herring. Pay and pensions are about €20bn in total, and those in the public sector get about 20% more than their private counterparts, but they've already taken a 7% pension levy/effective pay cut, so the gap is about 10%. Is there room for improvement? Yes, but 10% of €20bn is only €2bn. Our deficit is ten times that.

Basically we need unions to stop whinging about cuts and pretending that we can afford thing we cannot. We need to swallow the bitter pill that's coming our way (expect PAYE to increase, water charges, property taxes, social welfare cuts, lower tax thresholds etc etc) and just bear it for a few years. This mess has FF paws all over it, but what's done is done and even if FG were to enter govt tomorrow we'd have the same problem.

What'd be great is if people who could reasonably afford a pay cut from e.g. €38,000 to €34,000 (by higher taxes or whatever) just took the hit. The reality is that the money has to come from somewhere - we can share the pain around or we can inflict it mostly on those who lose their jobs and go from €38,000 to €10,000. The problem is too vast to hope that we can leave it to those on €50k+ to make up the balance. The people who bitch and moan about 10% cutbacks in dole, or old-age pensions, or the introduction of a loan-scheme for university fees, or any other reasonable enough fiscal change, are the people who either ignorantly or willingly are not supporting this republic. That's their choice, but I'm not going to listen to them if they ever try and take the "We live in a society not an economy" approach again.

P. Breathnach

The Economist wrote: »

... The public sector wage bill is a bit of a wild herring. Pay and pensions are about €20bn in total, and those in the public sector get about 20% more than their private counterparts, but they've already taken a 7% pension levy/effective pay cut, so the gap is about 10%. Is there room for improvement? Yes, but 10% of €20bn is only €2bn. Our deficit is ten times that.

Basically we need unions to stop whinging about cuts and pretending that we can afford thing we cannot. We need to swallow the bitter pill that's coming our way (expect PAYE to increase, water charges, property taxes, social welfare cuts, lower tax thresholds etc etc) and just bear it for a few years. This mess has FF paws all over it, but what's done is done and even if FG were to enter govt tomorrow we'd have the same problem.

What'd be great is if people who could reasonably afford a pay cut from e.g. €38,000 to €34,000 (by higher taxes or whatever) just took the hit. The reality is that the money has to come from somewhere - we can share the pain around or we can inflict it mostly on those who lose their jobs and go from €38,000 to €10,000. The problem is too vast to hope that we can leave it to those on €50k+ to make up the balance. The people who bitch and moan about 10% cutbacks in dole, or old-age pensions, or the introduction of a loan-scheme for university fees, or any other reasonable enough fiscal change, are the people who either ignorantly or willingly are not supporting this republic.

I agree with all of that -- subject only to the condition that I get a free pass, and don't have to contribute.

That's their choice, but I'm not going to listen to them if they ever try and take the "We live in a society not an economy" approach again.

But we do live in a society, and part of what went wrong is that some influential people put across the message that we live in an economy rather than a society. For me, some of of the implications of living in a society are that we share our burdens, look after the weak, and pay our taxes.

hobochris

P. Breathnach wrote: »

I agree with all of that -- subject only to the condition that I get a free pass, and don't have to contribute.



But we do live in a society, and part of what went wrong is that some influential people put across the message that we live in an economy rather than a society. For me, some of of the implications of living in a society are that we share our burdens, look after the weak, and pay our taxes.

Problem there is that the Society that everyone is striving for, where we all get looked after, costs money, that's where the need for running things with an economy mindset kicks in.

Time Magazine

P. Breathnach wrote: »

But we do live in a society ... we share our burdens, look after the weak, and pay our taxes.

Bingo. People on €38,000 are probably in the richest 3% or 4% of people in the world. They may play their part.

What's done is done and refusing to acknowledge that is what will to lead to IMF scenarios.

P. Breathnach

hobochris wrote: »

Problem there is that the Society that everyone is striving for, where we all get looked after, costs money, that's where the need for running things with an economy mindset kicks in.

I think you don't quite see what I meant. I never said that everybody should be looked after; I suggested that we should look after the weak - we, not somebody else.