IMF wont be coming to Ireland

nesf

Mystik Monkey wrote: »

i'd agree that it appears they aren't as bad as they once were alright. The Ukraine intervention is hopefully the way they will continue, but I think it's fair to say if they were to get involved, the cuts being mooted by Cowen et al would pale to what would be required to service the debt levels associated with an IMF loan.

The debt levels associated with an IMF loan weren't ever the problem, it was the conditions attached to those loans. For instance in the Asian Tiger economies that saw IMF intervention, massive cuts in Government spending and large interest rate increases were required, neither of which are needed to service a loan.

Our problem is that we have an enormous deficit in relative terms. Cuts to Government spending will happen regardless of whether the IMF comes in or not simply because in relative terms servicing the debt we build up (i.e. just interest payments) will overwhelm our budget very very quickly if we don't rein in spending.

thebman

Flamed Diving wrote: »

I read economic journals, mainly. Don't have much time for newspapers. I would appreciate a link or something. Thanks ever so much for your help so far. Great work.

http://www.irishtimes.com/newspaper/finance/2009/0919/1224254861624.html

Buying our bonds indirectly is a bail out. Not a free money bailout but a bail out none the less.

Dr Galen

nesf wrote: »

The debt levels associated with an IMF loan weren't ever the problem, it was the conditions attached to those loans. For instance in the Asian Tiger economies that saw IMF intervention, massive cuts in Government spending and large interest rate increases were required, neither of which are needed to service a loan.

Our problem is that we have an enormous deficit in relative terms. Cuts to Government spending will happen regardless of whether the IMF comes in or not simply because in relative terms servicing the debt we build up (i.e. just interest payments) will overwhelm our budget very very quickly if we don't rein in spending.

sorry Nesf, I was basiclly trying to say what you've just said a lot better than I did.

My thoughts were, that if we get into a state that we need to calling the IMF, then the debts and crap that we'll be up to our eyes in, will mean that the present cuts will seem small in comparision. I didn't mean that servicing the IMF side of things would mean this.

Ok I'm confusing myself again, blame the antibiotics .

TLDR : I'm in broad agreement

nesf

thebman wrote: »

http://www.irishtimes.com/newspaper/finance/2009/0919/1224254861624.html

Buying our bonds indirectly is a bail out. Not a free money bailout but a bail out none the less.

Eh, the problem is that you're linking two separate things. That ECB refinancing deal is available to all EU banks. The requirement for reducing our deficit comes from the EU Commission, which is a separate entity. We'd be able to avail of the ECB refinancing so long as we remained part of the Eurozone, i.e. just like Greece has refused to reduce deficits and Greek banks can still avail of this ECB deal.

eoinbn

It would be hugely irresponsible of the IMF to say anything else. The fact that they are even answering questions about whether or not they will have to bail us out is a dire sign.
After the breakdown of talks last week it seems highly likely we are headed for more strikes, and I would assume more intense, in the new year. If the government are first to blink and roll back the cuts in forecoming budget then we are a gaint-step closer to the IMF.

thebman

nesf wrote: »

Eh, the problem is that you're linking two separate things. That ECB refinancing deal is available to all EU banks. The requirement for reducing our deficit comes from the EU Commission, which is a separate entity. We'd be able to avail of the ECB refinancing so long as we remained part of the Eurozone, i.e. just like Greece has refused to reduce deficits and Greek banks can still avail of this ECB deal.

Yes but realistically the ECB refinancing deal is a bailout in itself too for other countries.

I think we are just using it more than others which is why it is a more of a bail out for us than most others.

We have agreed with the EU commission to reduce our debt but I think its misleading to consider both to be completely separate things. If we were really taking the p*** on the ECB's refinancing deal so as not to reduce our expenditure as we agreed we would then the commission would be asking what the story was and the ECB would be reconsidering its refinancing deal.

nesf

thebman wrote: »

Yes but realistically the ECB refinancing deal is a bailout in itself too for other countries.

I think we are just using it more than others which is why it is a more of a bail out for us than most others.

Bailout or an attempt to prevent bank failure? The latter is a something that central banks worldwide are attempting to do.

thebman

nesf wrote: »

Bailout or an attempt to prevent bank failure? The latter is a something that central banks worldwide are attempting to do.

Most countries are trying to prevent bank failure but not all are borrowing 20 billion to get by each year and then more to bail out banks.

Looking at the overall scenario, Ireland is being bailed out by the ECB using the systems available to not have it be seen as a straight bail out.

I'd call it a bailout though and don't really care what other countries are calling it when they do it or what our government or the ECB call what they are doing. If other countries are doing similar to us then I'd say they are being bailed out too as realistically that is what is happening.