What will happen when the Germans say no

westtip

What is going to happen on the day of reckoning when Bryan Dobson looks us in the eye from the TV screens and says - The cheques are bouncing and the Germans are saying no more money.

What actually will happen then??

Perhaps the bearded gentlemen will call another day of action.

kippy

westtip wrote: »

What is going to happen on the day of reckoning when Bryan Dobson looks us in the eye from the TV screens and says - The cheques are bouncing and the Germans are saying no more money.

What actually will happen then??

Perhaps the bearded gentlemen will call another day of action.

No one really know how much longer we've left going as we are or even improving.....however I think we've another 2-4 years to get our ship in order before the money stops at least. So long as we try bring the finances under control in that period and are seen to be doing so things SHOULD be okay.
The issues occur if the banks implode.

irish_bob

westtip wrote: »

What is going to happen on the day of reckoning when Bryan Dobson looks us in the eye from the TV screens and says - The cheques are bouncing and the Germans are saying no more money.

What actually will happen then??

Perhaps the bearded gentlemen will call another day of action.

that will never happen , we are irish afterall , like dunne stores , were different cause :rolleyes:

hinault

I'm not sure that the possibility of Germany say "no" : is all that remote.

Currently the US buudget deficit $12trillion and growing.
Dubai owes $80b.
The German economy itself needs to be repaired.
The British economy is not in good shape either.

We're a small non-entity on the western seaboard of Europe,

The Germans will decide which country has the best possibility of repaying loans.


If you had the money, would you make a loan to this lot?

whatnext

westtip wrote: »

What is going to happen on the day of reckoning when Bryan Dobson looks us in the eye from the TV screens and says - The cheques are bouncing and the Germans are saying no more money.

What actually will happen then??

Perhaps the bearded gentlemen will call another day of action.

The Unions will bail us out, they have some sort of hardship fund I believe

starbelgrade

They are more likely to say "Nein."

PaulieD

I the long term, would this actually be a bad thing? Short term pain for long term gain.

westtip

PaulieD wrote: »

I the long term, would this actually be a bad thing? Short term pain for long term gain.

I agree they should pull the plug in the new year and say get on with it folks - you have done nothing but take since joining the EU, and we are fed up with you.

It would be one hell of a wake up call for Government if they had to say sorry folks but we didn't actually believe they would do it. it really would be the shake up we need.

ei.sdraob

will go cap in hand to someone else

Dannyboy83

PaulieD wrote: »

I the long term, would this actually be a bad thing? Short term pain for long term gain.

It would be very bad indeed.

I hope the EU will gradually take some of the decision making from the Irish government, who continually reassure us that they're neither capable of governing nor protecting their citizens.

For example, did the Irish government ever do anything like this:
http://www.irishtimes.com/newspaper/breaking/2009/1124/breaking50.htm

Its pathetic that we have to rely on the EU Parliament to protect us, while our government is busy tied up at tribunals trying not to get caught with their hand in the coffers and ducking for cover when expenses scandals blow open.

Taxipete29

hinault wrote: »

I'm not sure that the possibility of Germany say "no" : is all that remote.

Currently the US buudget deficit $12trillion and growing.
Dubai owes $80b.
The German economy itself needs to be repaired.
The British economy is not in good shape either.

We're a small non-entity on the western seaboard of Europe,

The Germans will decide which country has the best possibility of repaying loans.


If you had the money, would you make a loan to this lot?

Its very very remote. Maybe an economist could explain to us the consequences of Ireland as a member of the euro going bankrupt.

murphaph

Taxipete29 wrote: »

Its very very remote. Maybe an economist could explain to us the consequences of Ireland as a member of the euro going bankrupt.

I'm not an economist (but hey, they get it wrong a lot too!). I don't believe for a second that the Germans will (for the sake of the reputation of the Euro) just keep us afloat.

If the Euro collapsed as a currency, people would likely look at the remains of the Eurozone for a stable, well governed country, with high productivity and exports of high value, indigenously developed products. This is where they will put their money, into say a Deutschmark which was one of the world's most stable currencies for the best part of half a century. The German's have a LOT less to fear from a TOTAL collapse of the Euro than the likes of Ireland. They could revert to form and let waster countries like Ireland sink on their own.

The Germans would like to avoid this but if Ireland does not cut it's spending drastically they will be left with no choice. Ireland would then probably have to peg its currency to Sterling and accept the devaluation based paycuts that Gordon Brown has been dishing out to every single british resident for the last few months! May as well accept a real paycut now tbh.

Taxipete29

murphaph wrote: »

I'm not an economist (but hey, they get it wrong a lot too!). I don't believe for a second that the Germans will (for the sake of the reputation of the Euro) just keep us afloat.

If the Euro collapsed as a currency, people would likely look at the remains of the Eurozone for a stable, well governed country, with high productivity and exports of high value, indigenously developed products. This is where they will put their money, into say a Deutschmark which was one of the world's most stable currencies for the best part of half a century. The German's have a LOT less to fear from a TOTAL collapse of the Euro than the likes of Ireland. They could revert to form and let waster countries like Ireland sink on their own.

The Germans would like to avoid this but if Ireland does not cut it's spending drastically they will be left with no choice. Ireland would then probably have to peg its currency to Sterling and accept the devaluation based paycuts that Gordon Brown has been dishing out to every single british resident for the last few months! May as well accept a real paycut now tbh.

I agree that the Germans are in a far stronger position should it all go belly up, but isnt a more likely scenario the EU and the ECB stepping in before that happens??

bridgitt

hinault wrote: »

If you had the money, would you make a loan to this lot?

Not when the government and government employees here pay themselves more than they would in your own country, and when as soon as they go on strike they head north and fill their trolleys with drink in Newry ! You thought Africa was bad ! As another poster said I don't believe for a second that the Germans will (for the sake of the reputation of the Euro) just keep us afloat. The Germans and Brits gave us enough money already ( 100 billion since the start of the EC I believe ) and will cop on one day. Nobody who lends this country money will see it again, so why should they bother ? Would you lend this country 25 billion a year ? The question is ; when will the government cheques bounce ?

murphaph

Taxipete29 wrote: »

I agree that the Germans are in a far stronger position should it all go belly up, but isnt a more likely scenario the EU and the ECB stepping in before that happens??

well, the ECB (despite what's on the tin) is a German run body. It derives its conservative nature from the Bundesbank and the Germans maintain much of the control and influence as the Bundesbank had long been internationally respected for its prudent management of German monetary policy. The ECB is of course located up the road from the Bundesbank-no coincidence.

The Germans are still the paymasters of Europe. They contribute the most to the EU and if they want to stop lending money to a silly Ireland who pays its teachers, nurses, police, politicians etc. etc. etc. a shedload more than their equivalents in Germany itself, then they will. The 'EU' would not be able to force Germany to hand the money over.

It makes me chuckle to remember when the Germans were criticising Charlie McCreevy and most Irish people were happy to tell 'the Germans' to mind their own business and shur'n wasn't our economy flyin' alogether and wasn' their's in the bin?!. Looks like the prudent German worker who lives in a modestly sized apartment, takes home a modest wage, has no credit card (even the likes of large retailers like IKEA in Germany do not take credit cards as Germans are in general averse to debt), no mortgage etc. is bailing out the over exuberant Irish equivalent who couldn't borrow enough money or couldn't be without that latest LCD TV. Who are the fools really?

daveyboy_1ie

westtip wrote: »

I agree they should pull the plug in the new year and say get on with it folks - you have done nothing but take since joining the EU, and we are fed up with you

This is the sort of nonsense talk that gets on my nerves, overall we have given plenty back to the EU. Our fishing resources alone are billions to them, our concessions by our farmers are crippling them, the list goes on.

We benefitted from the EEC/ EU no question, but so did they from us. The difference is we don't give hard cash over which is quantifiable so thats why the perception of us as takers exists.

ardmacha

I'm not an economist (but hey, they get it wrong a lot too!). I don't believe for a second that the Germans will (for the sake of the reputation of the Euro) just keep us afloat.

If the Euro collapsed as a currency, people would likely look at the remains of the Eurozone for a stable, well governed country, with high productivity and exports of high value, indigenously developed products. This is where they will put their money, into say a Deutschmark which was one of the world's most stable currencies for the best part of half a century. The German's have a LOT less to fear from a TOTAL collapse of the Euro than the likes of Ireland. They could revert to form and let waster countries like Ireland sink on their own.

The Germans would like to avoid this but if Ireland does not cut it's spending drastically they will be left with no choice. Ireland would then probably have to peg its currency to Sterling and accept the devaluation based paycuts that Gordon Brown has been dishing out to every single british resident for the last few months! May as well accept a real paycut now tbh.

Good point (Apart from the fact that the we do not pay our teachers more than the Germans do).

A bit more Berlin and a bit less Boston would be very desirable. Having had bad experiences with inflation etc in the past the Germans are wary of it happening again. One very welcome outcome of the present mess in Ireland would be that it should no longer be respectable to advocate people living beyond their means up to their eyeballs in borrowings. If this leads to a generation who return to saving for things and who have a sense of the value of things then so much the better.

seangal

hinault wrote: »

I'm not sure that the possibility of Germany say "no" : is all that remote.

Currently the US buudget deficit $12trillion and growing.
Dubai owes $80b.
The German economy itself needs to be repaired.
The British economy is not in good shape either.

We're a small non-entity on the western seaboard of Europe,

The Germans will decide which country has the best possibility of repaying loans.


If you had the money, would you make a loan to this lot?

i think china will pull the plug on america first and that will change the world

hinault

murphaph wrote: »

well, the ECB (despite what's on the tin) is a German run body. It derives its conservative nature from the Bundesbank and the Germans maintain much of the control and influence as the Bundesbank had long been internationally respected for its prudent management of German monetary policy. The ECB is of course located up the road from the Bundesbank-no coincidence.

The Germans are still the paymasters of Europe. They contribute the most to the EU and if they want to stop lending money to a silly Ireland who pays its teachers, nurses, police, politicians etc. etc. etc. a shedload more than their equivalents in Germany itself, then they will. The 'EU' would not be able to force Germany to hand the money over.

It makes me chuckle to remember when the Germans were criticising Charlie McCreevy and most Irish people were happy to tell 'the Germans' to mind their own business and shur'n wasn't our economy flyin' alogether and wasn' their's in the bin?!. Looks like the prudent German worker who lives in a modestly sized apartment, takes home a modest wage, has no credit card (even the likes of large retailers like IKEA in Germany do not take credit cards as Germans are in general averse to debt), no mortgage etc. is bailing out the over exuberant Irish equivalent who couldn't borrow enough money or couldn't be without that latest LCD TV. Who are the fools really?

Could not agree more.

The fact of the matter is that the German nation (and indeed the Dutch) have been a very prudent nation of savers.
If they cannot afford something, they will not buy it.
Or more accurately they will save their money until they can afford it.

The average German lives very prudently.

What other nation on this planet, could have their population increased by 20% (German reunification) and still be the highest nett contributor to Europe?
No other nation on earth could - except Germany.

And yet this country with a population of 4m people consistently manages to get it's finances wrong - and during the so-called "good times" has the audacity to lecture Europe about how "the Irish model broke the economic paradigm".

We voted in the cretins who helped make the mess : madness is defined as doing the same think over and over again when you know you get the same wrong result.

Darragh29

murphaph wrote: »

I'm not an economist (but hey, they get it wrong a lot too!). I don't believe for a second that the Germans will (for the sake of the reputation of the Euro) just keep us afloat.

If the Euro collapsed as a currency, people would likely look at the remains of the Eurozone for a stable, well governed country, with high productivity and exports of high value, indigenously developed products. This is where they will put their money, into say a Deutschmark which was one of the world's most stable currencies for the best part of half a century. The German's have a LOT less to fear from a TOTAL collapse of the Euro than the likes of Ireland. They could revert to form and let waster countries like Ireland sink on their own.

The Germans would like to avoid this but if Ireland does not cut it's spending drastically they will be left with no choice. Ireland would then probably have to peg its currency to Sterling and accept the devaluation based paycuts that Gordon Brown has been dishing out to every single british resident for the last few months! May as well accept a real paycut now tbh.

The ECB have the mother of all valid excuses if they decide to cut us loose. If this budget doesn't begin with the sound of a two-stroke chainsaw being started up and taken to the cost of running the public sector, the people lending to us at the moment can turn around and say: "look, the cashflow problems that this country are having now are entirely in-house issues that they have created for themselves in the first instance, we helped them out to begin with and have afforded them more than enough breathing space to sort things out and get their house in order but they are their own worst enemy at this stage, so f*ck em, goodluck"....

You couldn't blame anyone with a cheque book for ending up with this point of view either.... You can only cry wolf so many times before people stop believing you...

murphaph

I just hope the ECB have conveyed to Cowen that they need to see these measures THIS December! If the ECB begins to reign in lending sooner rather than later, Cowen can't just hope to limp along to the next election. He will have to act and act decisively. Really, Ireland sadly needed this kick up the hole.

ashleey

The Germans have already laid down the law in return for the Nama bonds and all the rest. Hence all the soft leaks about what is going to be cut in the budget. They are direct quotes from a report sitting in Lenihan's desk with a German signature posted about 8 months ago.

Sand

I dont think an Irish bankruptcy would have an immense effect on the reputation of the euro, though we should encourage the view that it would as it will help the Germans find reasons to help us as opposed to simply point and laugh - schaudenfreude being a German word and all that.

We have two issues

- Control the damage by cutting the deficit as fast as is humanly possible
- Start recovering by doing everything possible to encourage investment and enterprise, at the lowest cost possible. The cheapest way possible to do this is to cut out state monopolies, kill vested interests and eliminate barriers to economic activity.

We also need to start being smarter in administering this country - I saw a post here about the dog tax costing roughly twice as much to administer as it actually raises in tax. Simple solution: eliminate the tax, eliminate the administration and save a couple of million. A flat tax system can raise just as much revenue and be just as progressive as a tiered tax system, but is far simpler and thus cheaper to adminster.

The principles of the McCarthy report need to be absorped - its needs to be a question of not only "Can we do this cheaper?" but actually "Why are we doing this at all?" There are so many quangos and jobs for the boys boards/semi state bodies where no one would notice if they were simply wrapped up tomorrow.

The electorate also needs to get smarter. Fianna Fail win elections because they give us what we want. As opposed to what we need. Labour and FG play the same game, but worse than FF do. We need to be smart enough to call bull**** on our politicians. This is hard, and its actually an example of the prisoners dilemma in that if one constituency elects a locally driven county councillor does better than constituencies that elect nationally minded statesmen.

And yet, everyone suffers when the county councillors **** up at running a national economy. We need a second Republic where the potential for locally driven candidates are simply prevented from rising above their station - i.e. we dont need Jackie Healey Rae in a national parliment when he is at best a county councillor. A party list system is the best way to achieve this, eliminating the link between the local "big man" and his feudal serfs.

The current system in this country has failed - we cant assume that it will be radical enough to get us out of this situation, indeed, it has been conventional enough to assume that the greatest priority is rescuing the bankers, lawyers and politically connected. The Germans and our other international backers in the bond market will be reassured about our ability to repay based not only on fiscal discipline over the next few years, but also a serious examination of what was wrong with our political and public service that sleepwalked us into this fiscal disaster.

ei.sdraob

i found an interesting graph which illustrates just how bad our economy has gone



http://www.cmavision.com/market-data#riskiest

MiniDriver

I think the German economy is a lot less strong than people think - they rely on the export of capital machinery and luxury cars to debt-ridden economies who can no longer afford to buy. In fact it suits them to lend to other European countries as a form of retailer-funding for their own industries.

If the Germans cut off funding it will be because they have been forced to in order to prevent their own collapse.

LoanShark

I believe Brian Lenihan will guide us through this..

Mind you, I believe in Santa, The Easter Bunny and The Tooth Fairy!

murphaph

MiniDriver wrote: »

I think the German economy is a lot less strong than people think - they rely on the export of capital machinery and luxury cars to debt-ridden economies who can no longer afford to buy.

Germany makes more than just luxury cars and capital machinery of course. It designs, manufactures and exports all manner of things that the rest of the world wants (including a lot of software, like SAP). German quality is world renowned and is this reputation is generally deserved. The "ah shur'n it'll do" attitude doesn't exist here-things are just done properly.

German companies can afford to lower their prices (as their staff aren't paid as well as in the likes of Ireland) without folding to a point where they can sell. German exporters will then increase the prices when feasible to do so. I can't see how being an exporter of high value, in demand, often unique equipment is somehow a sign of a weak economy. Germany is also the world's biggest exporter in absolute terms, bigger than China.

MiniDriver

murphaph wrote: »

Germany makes more than just luxury cars and capital machinery of course. It designs, manufactures and exports all manner of things that the rest of the world wants (including a lot of software, like SAP). German quality is world renowned and is this reputation is generally deserved. The "ah shur'n it'll do" attitude doesn't exist here-things are just done properly.

German companies can afford to lower their prices (as their staff aren't paid as well as in the likes of Ireland) without folding to a point where they can sell. German exporters will then increase the prices when feasible to do so. I can't see how being an exporter of high value, in demand, often unique equipment is somehow a sign of a weak economy. Germany is also the world's biggest exporter in absolute terms, bigger than China.

It doesn't matter how high-value the equipment is if those "demanding" it can't afford it. I didn't say that the German economy is "weak", I said that it is less strong than people think it is. This is because it relies on exports to countries with weaker economies.

Essentially it's the last domino in the chain.

murphaph

MiniDriver wrote: »

It doesn't matter how high-value the equipment is if those "demanding" it can't afford it. I didn't say that the German economy is "weak", I said that it is less strong than people think it is. This is because it relies on exports to countries with weaker economies.

Essentially it's the last domino in the chain.

All economies are a bit subdued right now, but my point is that relative to say, Ireland, the German economy is very strong.

Can you maybe give an example of a stronger economy, and explain why, in your opinion, because I'm having difficulty understanding your point?

johnathan woss

MiniDriver wrote: »

It doesn't matter how high-value the equipment is if those "demanding" it can't afford it. I didn't say that the German economy is "weak", I said that it is less strong than people think it is. This is because it relies on exports to countries with weaker economies.

Essentially it's the last domino in the chain.

Look, they export machinery (also high value chemicals) that everybody wants.

If other countries can't afford them they will be willing to barter oil, natural gas, phosphorous, food, etc for them.

MiniDriver

murphaph wrote: »

All economies are a bit subdued right now, but my point is that relative to say, Ireland, the German economy is very strong.

Can you maybe give an example of a stronger economy, and explain why, in your opinion, because I'm having difficulty understanding your point?

Well I think all economies will remain subdued because we're seeing a secular change in the world economy - we have seen peak credit, and I suspect we're coming towards peak resources. The bubble we've had is I believe the last bubble - which means no recovery to the sort of global economy we saw in 2007.

That means I think all economies will shrink and stay shrunk. Germany maybe less than Ireland, but it will still see some secular changes. We're seeing several thousand Opel workers losing their jobs already.

I can't name a stronger economy than Germany, though there are some possible candidates (maybe Norway, Canada) because I believe the systemic imbalances in the world economy will manifest themselves in surprising ways. Also Germany is far from squeaky clean - its banks are heavily exposed to the accession countries mortgage debts.

I think Irish people have a kind of blind faith in Germany, and what I am saying is that blind faith isn't necessarily merited.