Why Ireland NEEDS an EU bailout.

creeper1

I want to revisit this topic to discuss the absolute pressing need for a bailout of Ireland. If not a bailout then a relaxation of the rules of the kind of budget deficit that a EU member can run.

The situation has passed the question of whether we should have it. WE NEED IT!

We are in a serious recession. However we are being asked to both increase taxes and cut spending at this time. These things are not possible.

An increase in taxes - This is just insane! People are already struggling with wage decreases and loss of employment. Some are sinking into negative equity. There is no way any government will get any money out of people this way. It is just POLITICALLY IMPOSSIBLE.

A cut in public spending. This is just madness. ABSOLUTE MADNESS. There is no way that the public sector will stand for any cuts in pay. They are already pointing to the cut in their pensions. People are already complaining about any tax on social welfare.
It is just insane to cut govenment spending when we need all the cash we can get to stimulate the economy.
HOw the hell is sqeazing the public sector going to translate into more consumer spending? The answer is IT CANT!
SO CUTS IN PUBLIC SPENDING ARE ALSO POLITICALLY IMPOSSIBLE.

Both the above options are no use. There is no way to save or raise money with them.

That leaves just one remaining option. That is a bail out of Ireland or a relaxation of budget deficit rules. WE SHOULD BE DEMANDING THIS!!!

On what basis? Well the basis lies with our faith on the "smart economy" that is being developed. Our EU partners must believe in us and our plans in this regard which will get things back under control.

zootroid

So German and French workers should work to bail us out? Yeah....

If public sector wage cuts are politically impossible, then I don't know how to describe Europe bailing us out.

creeper1

zootroid wrote: »

So German and French workers should work to bail us out? Yeah....

If public sector wage cuts are politically impossible, then I don't know how to describe Europe bailing us out.

Both France and Germany are out of recession. They should do what is in the interests of the EU.

Anyway Germany is OK. They are one of the world's biggest exporters.

We are in a fix. We need help. I am sorry. There is no other way around it.

ashleey

I think you'll find that ireland is already being bailed out. 25 per cent of this year's bond issuance has been turned for cash at the ecb and the commission has already let the deficit go way above 3% and then the 10.75% the govt aimed for. How much more would you like germany to do given how cross they are about the poor regulation in dublin that let some of their banks go crazy and require a bailout?

The_Conductor

Its not in France's or Germany's interest to bail us out- we are well above the average EU GDP- if they bail us out they will have a long queue of other equally worthy bailout countries clambouring to be helped. The ECB is not threatening action against us- and agreed to give us 3 years to bring our budget deficit back into agreed territory- and is redeeming our sovereign bonds on demand- this is as good as its going to get.......

We were warned about the hole we were digging for ourselves numerous times by both the French and the Germans- and we ignored them. Admittedly- the German ambassador could have been a lot more diplomatic about it, but all we did was put our heads in the sand- and pleaded the 'special Irish case'. Whoever invented the term 'Celtic tiger' should be hunted down and beaten up- the initial phase of our boom was built on robbing tax revenues from our EU colleagues with abnormally low corporation tax rates.

We are now going to have to stomach some very tough medicine- we are going to have massively cut expenditure and increase taxation. In order to make it worth people's while to work- we are also going to have to massively chop social welfare entitlements- and make people take any jobs at all that are available. Just because you are qualified as a pharmacist or an architect- does not mean you have any right or expectation to a job in your chosen profession (and don't get me started on archaelogists- god only knows why we have 14 times more archaeology graduates in 2008 than we had in 1994.

We are going to have to reinvent Ireland from the bottom up- and this time round- we have to accept that we are a small island on the periphery of the EU, we are not going to get a welcome when we go to Brussels with a begging bowl- its not going to happen. We have to get out of our parochial mindset- where every village is against every other village, every county against every other county- and the rest of the country against Dublin. The biggest surprise is that the country hasn't imploded a lot before now. Our elected representatives have to represent the needs of Ireland, not the needs of Mary Doyle in Cahirciveeen......

At the moment we have a massive deficit of leadership from all our politicians- there is no-one willing to stand up and say the hard things that need to be said. The public do not comprehend the gravity of the situation we are in- and no-one is enlightening them. Meanwhile we have every little special interest group holding their protests outside the Houses of the Oireachtas- sometimes as many as 6 or 7 seperate protests on any given weekday lunchtime. Our politicians habitually give in to these protestors- with comments about protecting the vunerable in society. Anyone who still has a job and is paying increased levies and taxes, are fast becoming the vunerable in society- but of course its not politically correct to say this.......

Our country is bankrupt, we're broke, both publicly but also privately. We need to accept this- and we need to communicate and educate each other on how to survive in our changed circumstances.

Peanut

creeper1 wrote: »

On what basis? Well the basis lies with our faith on the "smart economy" that is being developed.

Don't bet on it...

The Smart Economy (tm), a close relative of the Celtic Tiger, wheeled out by politicos whenever a sufficiently vague soundbite promising future economic salvation is needed.

The one-trick pony of low corporation tax for multinationals worked in the past, but it's time to get a bit more inventive.

Idbatterim

no way should any other country bail us out! no way! a knife should be taken to the public sector wage bill, yes maybe a small reduction in the social welfare bill and a few new taxes. An arguament will be made that, making more people unemployed from the civil service will further compound the problems. Ok , grade it, anyone under say 30k no pay cuts, 40 - 50k, 5% reduction, have maybe 5 bands, and as the pay goes up so does the salary cut...

Beasty

The public sector in Ireland is unsupportable in its current form. No amounts of increases in taxation will pay for it. If the government and unions do not accept this (and agree to massive cuts in public spending), it will become increasingly difficult to borrow to pay for public services.

Without cuts, at some stage the government will probably run out of money, and the EU and/or IMF will step in to help, but only on the basis that the cuts required to public spending are implemented. There is no point in waiting any longer - the government must take the hatchet to public spending.

hiorta

The need to live within the National Income is paramount.

T-Square

creeper1 wrote: »

A cut in public spending. This is just madness. ABSOLUTE MADNESS. There is no way that the public sector will stand for any cuts in pay.

Stuff and nonsense

Liam Byrne

creeper1 wrote: »

A cut in public spending. This is just madness. ABSOLUTE MADNESS. There is no way that the public sector will stand for any cuts in pay.

And there is no way that the public, whom that sector is meant to "serve", will stand for being fleeced and losing their jobs while seeing the public sector get off practically scot-free.

And before you start, I'm not talking about Fianna Failure imposed "levies" and "stealth taxes" etc; the private sector has had to endure those AS WELL AS pay reductions and reduced hours.

So forgive me if the people who are meant to be OUR employees (and that includes the incompetent and waste-of-space arseholes in Leinster House that got us into this mess) are not going to dictate to me what they should or shouldn't do.

irish_bob

Liam Byrne wrote: »

And there is no way that the public, whom that sector is meant to "serve", will stand for being fleeced and losing their jobs while seeing the public sector get off practically scot-free.

And before you start, I'm not talking about Fianna Failure imposed "levies" and "stealth taxes" etc; the private sector has had to endure those AS WELL AS pay reductions and reduced hours.

So forgive me if the people who are meant to be OUR employees (and that includes the incompetent and waste-of-space arseholes in Leinster House that got us into this mess) are not going to dictate to me what they should or shouldn't do.

all that and the fact that it would be a tad brass necked to expect a country like germany ( who pays its consultants half the wage we do and france a country that pays its teachers 75% less than we do ) to save our asses

peasant

creeper1 wrote: »

Both France and Germany are out of recession. They should do what is in the interests of the EU.

Anyway Germany is OK. They are one of the world's biggest exporters.

We are in a fix. We need help. I am sorry. There is no other way around it.

Ireland as a country to behave like your typical Irish youth, is that it?

Take all the Eu pocket money and college grants that we were given, squander it on drink , fast cars and a a bit of a flutter and now that we're broke we go running back to mommy and daddy, pockets turned out and yell "help me because you must" ?

Ain't gonna work that way, I'm afraid

damo

creeper1 wrote: »

Both France and Germany are out of recession. They should do what is in the interests of the EU.

Bailing out ireland so that we can pay our bloated over paid public sector is not in the interest of the EU.

creeper1

Let me tell you why cuts in government spending must not happen.

The fact remains that alot of developed countries are printing money and feeding into their economies at a massive rate to keep credit going.

The ECB is resisting pressure to do this on a scale that the US is doing.

At a time of recession it's time to spend more NOT LESS to get things moving again yet they are talking of taking money out of the economy. I'm sorry but that spells disaster.

Maybe if Ireland was still in control of it's own currency we would embark on quantative easing just like the US. Instead sovereignty has been surendered to the EU.

I wouldn't be surprised if there is a political movement to get Ireland out of the euro and Europe. After all, what good are they if they don't help out in our hour of need?

The_Conductor

creeper1 wrote: »

Let me tell you why cuts in government spending must not happen.

The fact remains that alot of developed countries are printing money and feeding into their economies at a massive rate to keep credit going.

The ECB is resisting pressure to do this on a scale that the US is doing.

At a time of recession it's time to spend more NOT LESS to get things moving again yet they are talking of taking money out of the economy. I'm sorry but that spells disaster.

Maybe if Ireland was still in control of it's own currency we would embark on quantative easing just like the US. Instead sovereignty has been surendered to the EU.

I wouldn't be surprised if there is a political movement to get Ireland out of the euro and Europe. After all, what good are they if they don't help out in our hour of need?

Its called quantitative easing- and while the US Treasury may have printed silly amount of money- the ECB's approach has been to add cash into circulation by buying bonds. The fact that the bond sellers are hoarding this cash- is not the ECBs fault- they have gotten the cash out the door. Europe , and its financial institutions, are a lot more risk adverse than the their US counterparts. Then again- as of yesterday 94 banks have failed in the US (at a cost of 480 billion and counting (and their fund for failed banks has another 220 billion in it)).

It may be a different approach- but keep in mind, Europe does not have the private sector debt that US consumers have- which is why a different instrument is appropriate (ignore the Irish and the Portuguese who are hocked up to their eyeballs for the purpose of this comparison).

The big problem with the European model- is that its one size fits all prescription- simply does not take into account the vagaries of the Irish/Portuguese/Spanish/Italian/Greek and funnily enough- the Dutch situations- its geared towards the economic powerhouses of Germany and France. The US model is similarly flawed- but its backed up far better by their federal schemes, which are actually doing a reasonable job of targetting employment blackspots (in some geographical instances- they will pay the salaries of up to 40% of a companies workforce with federal funds- this extends to bar and cafe staff- up to manufacturing- all industry sectors).

weiss

If the public sector were a business, it would have gone bust years ago.

You expect.. almost demand that France and Germany throw more money at it?

never gonna happen.

Amhran Nua

creeper1 wrote: »

A cut in public spending. This is just madness. ABSOLUTE MADNESS. There is no way that the public sector will stand for any cuts in pay. They are already pointing to the cut in their pensions. People are already complaining about any tax on social welfare.
It is just insane to cut govenment spending when we need all the cash we can get to stimulate the economy.
HOw the hell is sqeazing the public sector going to translate into more consumer spending? The answer is IT CANT!
SO CUTS IN PUBLIC SPENDING ARE ALSO POLITICALLY IMPOSSIBLE.

If we dropped back to 2004 levels of expenditure, we'd be almost within budget. Its not a question of promoting consumer spending with this, its a question of survival. The areas of expenditure need to be closely looked at (which is impossible to do since only the ruling party has access to detailed figures), and cuts made. I'd hit the public sector last, and grade cuts to be highest at the top and lowest at the bottom, but when you have €13 billion going on quangos, and nurses who refuse to draw blood except on the picket line, there certainly is ample room for cuts.

creeper1 wrote: »

Both France and Germany are out of recession. They should do what is in the interests of the EU.

Anyway Germany is OK. They are one of the world's biggest exporters.

We are in a fix. We need help. I am sorry. There is no other way around it.

France and Germany ran serious stimulus programmes in order to get out of recession, there is no guarantee this is sustainable. One of the key markers in my opinion is Chinese export levels, since they produce the bulk of the low cost goods in the world. These exports are still collapsing at an unprecedented rate, and if there is no hope for the low cost goods, what chance for the higher cost stuff?

And overall, what did you envision, the EU would keep paying our hung over from the boom expenditure bill until we have another boom?

smccarrick wrote: »

the initial phase of our boom was built on robbing tax revenues from our EU colleagues with abnormally low corporation tax rates.

Thats called the free market there - nothing to stop them dropping their own tax rates to match ours. Nobody was robbed, they were out-competed. In any case, the initial phase of the boom is in no way responsible for our current problems, that would be lax financial regulation leading to a free for all in spending.

smccarrick wrote: »

We are now going to have to stomach some very tough medicine- we are going to have massively cut expenditure and increase taxation.

Why do we need to greatly increase taxation? Do you know how many times expenditure has doubled in the last ten years?

smccarrick wrote: »

ust because you are qualified as a pharmacist or an architect- does not mean you have any right or expectation to a job in your chosen profession

Thats the fast track to an exodus of highly skilled workers there though, the last thing we need.

smccarrick wrote: »

there is no-one willing to stand up and say the hard things that need to be said.

Check out the sig there.

dan_d

We are not going to receive money from the EU to fund our over-inflated wages in all sectors and to allow us to keep flinging money around as we have done for the last 10 years.
It's that simple.
We no longer have the money to fund public sector wages/child benefit etc, etc at the levels they are at.
Irish people need a strong dose of reality and it's just beginning.
The EU would slash all the above to more affordable levels before it would give us any more money. We are pretty insignificant in the greater scheme of things, and we're so busy trying to out-do each other that we never seem to see the bigger picture.
We have to accept that our wages are going to drop.
A bailout from the EU would just prolong the agony.

jimmmy

creeper1 wrote: »

After all, what good are they if they don't help out in our hour of need?

So now you expect Germany and France ( as someone else said, "the countries who pays its consultants half the wage we do and france a country that pays its teachers 75% less than we do ") to pump more money in to Ireland....and what will our govt do with it again....pay themselves and their employees ( the p.s ) the highest wages + perks ( pensions ) in the known world.

creeper1

jimmmy wrote: »

So now you expect Germany and France ( as someone else said, "the countries who pays its consultants half the wage we do and france a country that pays its teachers 75% less than we do ") to pump more money in to Ireland....and what will our govt do with it again....pay themselves and their employees ( the p.s ) the highest wages + perks ( pensions ) in the known world.

Yes but the government and their employees would be shopping in Ireland and spending their money domestically (hopefully) so that would boost private industry as well. Sorry but this kind of begrudgery attitude is just going to pull everyone down.

As for French teachers working for 25% of what Irish ones do, I don't really know what to say about that other than what kind of eejits are French teachers?

PeteHeat

Hi,

The E.U. are helping by accepting Irish Government Bonds in return for Cash to fund the country, love it or hate it but the Governmentt asked for the cash to fund Nama et all and got it on the backs of future generations by issuing "Bonds" polite name, real name Post Dated Cheques with interest paid to the bearer.

They will not openly tell the Irish Government. what they can or cannot do with the money borrowed but they can limit the number of times our Minister for Finance can return for more cash or issue more bonds for same, those Post Dated Cheques do not have to be accepted.

We are in a very difficult financial position and no one action will fix this mess, when goods are on offer at prices that are less than the cost of manufacture and the public don't or can't buy we have a depression not a recession, the figures can be played with to technically call this a recession but the business closures, VAT receipts and number of job losses tell a different story.

It is very easy to point at the Public Service and how much it costs, that same service is made up of average people who have families and mortgages to support, their outgoings are no less than the outgoings of most households in this country.

The cost of servicing the mortgages throughout the country prevents any further pay cuts or we will have families camped on the side of the roads while empty houses stand with the For Sale signs in the gardens, maybe we should get more American and just have the signs tell the truth Foreclosure !

I believe we the public should undertake Not to bid or buy a repossessed home, car or machinery, if the idiot banks did not look to recent history regarding "Boom to Bust" cycles and allowed the cost of the family home to be over priced to such a level that the cost of servicing the average mortgage dictates wages / pay policy and by default the competitiveness of this country then they should be the ones to come up with the solution to the crisis that exists in so many Irish homes today.

There are those who would argue that if the Irish don't buy the repossessed homes foreigners will, if what I believe is coming down the road arrives outside investors will not want to come here except maybe to learn from our experiences, two groups enabled the average family home to reach the point where the people they were built for could not afford them, the Banks and our Government.

The land on which the homes stand were part of a pyramid scheme a game almost where the banks would keep lending more and more to speculators until such time where a developer got to buy and build houses with labour that was over priced because the same labour force were also paying high prices and servicing large borrowings, of course we must not forget the excessive profits taken by the developers.

The alleged experts in the Banks and Members of Government were so busy clapping each other on the back that none of them asked, what is the best way to perform my duty in the best interest of the Bank or My Country ?

Joe Public went along for the ride enjoying the holidays, numerous plastic cards in the wallet / purse, number of cars in the drive way (reg number the ultimate status symbol) and like our Government refused to listen to the warnings issued by those at home and the European Central Bank, so it was to hell with the begrudgers elect the one who tells you what you want to hear and all will be good for another five years.

Please do not forget to look inward when apportioning the blame for our present situation.

What I found surprising on the Pat Kenny Show was the statement to the effect that Irish Business presently has Forty Billion in approved borrowing facilities, the same businesses we all depend on to produce the goods for export, create employment and try to keep people employed.

On the same show the Minister defends dumping Thirty Billion (almost the entire tax receipts for one year) into a dead bank, while at the same time discussing taking over the responsibility for a sum of between Fifty and Ninety Billion that was gambled mainly building houses / industrial property, buying land (to build more houses) when we have more buildings of all types than we need.

I am a simple man and yes I am confused perhaps because I am angry at the way the people in power be they elected or by alleged education have made such a mess of this country in such a short time.

The country is no longer competitive because we now have a work force Both Public and Private Sectors that can't afford to work for less, not because they are living high but because they must make that enormous monthly mortgage payment to the very Banks we are told we must rescue.

The incompetence of our politicians and the greed of the banks both in the past and what they propose for the immediate future have decided the future of this country as being one that has future generations buried in debt.

And all we do is post on Boards complaining about how much the Nurses who carry out duties that would turn most of our stomachs, Gardai who risk life and limb to protect us (often from ourselves), Teachers who form the minds of our young and take over many of the parents duties, and the many who turn up to do their job each day are paid.

They have to live too.

.

Nody

creeper1 wrote: »

Yes but the government and their employees would be shopping in Ireland and spending their money domestically (hopefully) so that would boost private industry as well. Sorry but this kind of begrudgery attitude is just going to pull everyone down.

Let me answer you as a non Irish EU citizen; "Why would we care about Ireland? It is a island on the edge with an economy they crashed themselves, lets work on our own countries and the growing Eastern European markets that matters".

PeteHeat

Nody wrote: »

Let me answer you as a non Irish EU citizen; "Why would we care about Ireland? It is a island on the edge with an economy they crashed themselves, lets work on our own countries and the growing Eastern European markets that matters".

Why should the citisen of any other country (E.U. or not) be interested in Ireland except maybe as a perfect example of what not to do when an economy starts to grow at a rate never seen before ?

If we were an economy the size of Germany or the US what happens here could have an effect on their lifestyle.

The average person in other E.U. countries have their own day to day problems, to them Irelande is the island beside Great Britain where they had a ten year party and now instead of drinking it they are crying in their beer.

.

Amhran Nua

Nody wrote: »

Let me answer you as a non Irish EU citizen; "Why would we care about Ireland? It is a island on the edge with an economy they crashed themselves, lets work on our own countries and the growing Eastern European markets that matters".

Er because we have the EU by the sack at the moment. Likely that will change on the 2nd, but we'll see.

hiorta

Ireland's 'need' does not come into the equation - like everything else in the world, Ireland can only get what Ireland has earned.
Dishonestly, rampant greed at all levels, deceit have brought the current situation into being and only large doses of opposite energies can dilute and repair the self-inflicted damage.
Yet, even now, the notion of someones hand-out dominates Irish minds.

The EU money was a wonderful opportunity, but you blew it.
Where do you think more handouts are going to come from?

If the positions were reversed would you give to someone who has just drank their precious inheritance?

creeper1

hiorta wrote: »

Ireland's 'need' does not come into the equation - like everything else in the world, Ireland can only get what Ireland has earned.
Dishonestly, rampant greed at all levels, deceit have brought the current situation into being and only large doses of opposite energies can dilute and repair the self-inflicted damage.
Yet, even now, the notion of someones hand-out dominates Irish minds.

The EU money was a wonderful opportunity, but you blew it.
Where do you think more handouts are going to come from?

If the positions were reversed would you give to someone who has just drank their precious inheritance?

Don't start your lecturing about greed or deceit. I note that your location is Scotland. It's not like your own politicians are much better. Remember the expenses claims in Westminster?:rolleyes: Yeah up on your moral high horse.

Europe is demanding a balancing of books but quite honestly they aren't going to get what they are looking for. Who is going to bail us out? Europe that's who. The consequences for their currency of Ireland going bankrupt (which looks more and more likely) would be too much to bear.

Yes Ireland will be bailed out. Most or all of the money will go to the banks but at least we can start afresh and do things the right way this time.

Both Ireland and FF are wiser now. We will do thing differently.

Tordelback

Both Ireland and FF are wiser now. We will do thing differently.

I note that your original argument was that we should just keep on doing exactly what we've been doing.

Amhran Nua

hiorta wrote: »

The EU money was a wonderful opportunity, but you blew it.

What EU money, the boom was entirely based on bank credit gone mad.

ei.sdraob

Amhran Nua wrote: »

What EU money, the boom was entirely based on bank credit gone mad.

Im sorry but seems your party has no knowledge of economics

The EU interest rates were kept and are at rock bottom

That money was taken and squandered on property boom not on infrastructure and renewable's (Germany are now a leader in that) thanks to FF terrible policies aimed at lining developers pockets

Amhran Nua

ei.sdraob wrote: »

Im sorry but seems your party has no knowledge of economics

The EU interest rates were kept and are at rock bottom

Apology accepted. The EU didn't put any money into the boom, so in fact saying that we "blew the EU money " makes no sense. The interest rates were a factor but loose lending conditions were much more of a problem.

ei.sdraob wrote: »

That money was taken and squandered on property boom not on infrastructure and renewable's (Germany are now a leader in that) thanks to FF terrible policies aimed at lining developers pockets

Yup, and thats whats all over our policy pages.