6.7 % rate for the bailout.

greenketchup

Empire o de Sun wrote: »

Just Germany? What about The Netherlands or France or Britain or Italy or Luxembourge ... etc.

Ireland is making money on the bailout to Greece!!!! Don't forget.

They all will, its crazy, it just seems to me that we're being good little Europeans and that the gov don't want to lose face with Brussels. We're going to be paying off this debt for a couple of generations. We deserve some pain but not this much, the little tax payer always picks up the tab..

The banks are gone, they're all going to be nationalised/sold off to big European banks. This is the way i see it, a bit simplistic, but we bail out the banks with everything we have, including the family silver, and pay it off over the next 30 years. In the meantime, the big European banks (senior bondholders) get off and get their money back, and probably get to buy a scaled down Irish bank minus the debts in a few years. its insane...

kippy

Anyone feel like setting up a bank?
It would probably be a good idea at this point in time.......

Festus

melekalikimaka wrote: »

we have been very anti eu recently before this

oh yes, very :rolleyes:

and we'll show them at the next EU referendum vote, won't we :rolleyes::rolleyes:

Fluorescence

Anyone else pretty scared now that the agreement has been reached with the IMF? Seems like we're now stuck with debt we had nothing to do with, and will be for a very long time to come

greenketchup

fluorescence wrote: »

Anyone else pretty scared now that the agreement has been reached with the IMF? Seems like we're now stuck with debt we had nothing to do with, and will be for a very long time to come

yup, its not looking good...

RealityCheck

fluorescence wrote: »

Anyone else pretty scared now that the agreement has been reached with the IMF? Seems like we're now stuck with debt we had nothing to do with, and will be for a very long time to come

Its the EU I'd be more worried about. If as Brian Lenihan has stated that the issue of senior bondholders in the banks was brought up and the idea of partial default rejected out of hand by the EU/ECB, it really does'nt look good. From media reports earlier in the week it was being said that the IMF did not agree with Europe. Add to this the higher interest rates being accrued on EU debt well then I think the IMF are the least of our worries. We can be left in no doubt that Europe have the banks of France, Germany and Britain at heart, not the good of the country.

jmayo

Deleted User wrote: »

we do have a choice and its between defaulting and this. Blindjustice says default. Lenihan says pay.

I agree with Blindjustice.

Festus wrote: »

...
and we'll show them at the next EU referendum vote, won't we :rolleyes::rolleyes:

Well payback is a bitch.
Anyway it a moot point as by then we will probably have a two tier EU, us, the Greeks, the Portugese, Latvians will be in the also rans using our own currency and the Germans, French, Dutch, Finns, Austrians, etc will have the New Euro.

BTW for anyone that wishes to study the Irish negotiating tactic please view the beginning of the following video...
If nothing else it might make one laugh on this very sad day.

https://www.youtube.com/watch?v=QiS1IcKuG8s

hmmm

RealityCheck wrote: »

Its the EU I'd be more worried about. If as Brian Lenihan has stated that the issue of senior bondholders in the banks was brought up and the idea of partial default rejected out of hand by the EU/ECB, it really does'nt look good. From media reports earlier in the week it was being said that the IMF did not agree with Europe. Add to this the higher interest rates being accrued on EU debt well then I think the IMF are the least of our worries. We can be left in no doubt that Europe have the banks of France, Germany and Britain at heart, not the good of the country.

We cannot finance our 20 billion euro deficit. We went begging to Europe. They said they would lend us the money, but one of the conditions was we took no action against senior bondholders. We didn't have to take their money on their conditions, why are you blaming Europe for anything?

Festus

fluorescence wrote: »

Anyone else pretty scared now that the agreement has been reached with the IMF? Seems like we're now stuck with debt we had nothing to do with, and will be for a very long time to come

I understand it is contingent upon the Budget and FYP being passed and adopted. If the governement can be collapsed before the budget is passed all bets are off.
We might need to go to court to force the government to hold any outstanding by-elections in the absence of Green and FF back benchers discovering they have a pair and acting in the interest of the ordinary citizen if this is to be achieved.

Fluorescence

Festus wrote: »

I understand it is contingent upon the Budget and FYP being passed and adopted. If the governement can be collapsed before the budget is passed all bets are off.
We might need to go to court to force the government to hold any outstanding by-elections in the absence of Green and FF back benchers discovering they have a pair and acting in the interest of the ordinary citizen if this is to be achieved.

We still have a chance? Thank fcuk. I think it's time to go knocking at the door of every TD in the country, begging them to turf the government out of office.

RealityCheck

hmmm wrote: »

We cannot finance our 20 billion euro deficit. We went begging to Europe. They said they would lend us the money, but one of the conditions was we took no action against senior bondholders. We didn't have to take their money on their conditions, why are you blaming Europe for anything?

Where did I say I blame Europe for everything??

The point was in response to someone being worried about the deal with the IMF. All I am pointing out is the fact that Europes motives rest in whats good for Europe, whereas in theory the IMF should have our interests at heart.

I will put it on the record that I believe without some level of debt restructuring, especially bank debt the arrangement will not work, and we will be in a bigger mess down the road.

Edit: Apologies I misread. Thought you said everything not anything. Well that is a whole different story. See point 2 above.

Festus

fluorescence wrote: »

We still have a chance? Thank fcuk. I think it's time to go knocking at the door of every TD in the country, begging them to turf the government out of office.

Politicians have neck. It doesn't automatically follow that they have balls, moral fortitude or courage.

Festus

blue_steel wrote: »

Peddling this 5.8% figure is the final straw. Even at the 11th hour our elected representatives are deliberatly misleading us. They are more concerned with protecting the interests of German citizens than Irish ones. Hard to believe how spineless they are. I think this deal will see Ireland go for one of the most pro-european countries in the union to complete euro sceptics. The German-Franco axis has cut us adrift.

Correct me if I'm wrong here but it is because of the EU that we got cheap money that fueled the Celtic Tiger. When the Euro launched and was very cheap from 2003 - 2006 and averaged 2.89 from 1998 to 2010.

In fairness the banks have to be blamed for pushing the money and the politicians have to be blamed for not controlling the economy and in fact fueling the property bubble, but still the money from europe was cheap.

Thing is, now it is even cheaper. Why can't we borrow at the ECB rate of 1%?

Something stinks when we're shut out of a market we voted for that has money at 1% and we're being forced to buy money at 6%

ArtSmart

Festus wrote: »

I understand it is contingent upon the Budget and FYP being passed and adopted. If the governement can be collapsed before the budget is passed all bets are off.
We might need to go to court to force the government to hold any outstanding by-elections in the absence of Green and FF back benchers discovering they have a pair and acting in the interest of the ordinary citizen if this is to be achieved.

I missed Chopra's response to that question. - though Rhen gave it welly no prob to the bollix.

i do wonder though. as in, this budget - or one that looks very similar - certainly amount wise, will be passed with a new govt anyway.
so it's all really down to the 'we (EU) want this sorted ASAP or portugal / spain will be next' sort of thing.

and labour FG aint gonna be able to 're-negotiate' the bailout. - despite Gilmore's blather on rte tonight - which i thought was weak and out of synch - as when the dust settles over the next few days, the deal will seem reasonable to most i reckon.

by reasonable i mean when you're being mugged, it's not so bad when they leave you your shoes. FF are finished no matter what, so less speil Gilly baby.

ArtSmart

Festus wrote: »

Correct me if I'm wrong here but it is because of the EU that we got cheap money that fueled the Celtic Tiger. When the Euro launched and was very cheap from 2003 - 2006 and averaged 2.89 from 1998 to 2010.

In fairness the banks have to be blamed for pushing the money and the politicians have to be blamed for not controlling the economy and in fact fueling the property bubble, but still the money from europe was cheap.

Thing is, now it is even cheaper. Why can't we borrow at the ECB rate of 1%?

Something stinks when we're shut out of a market we voted for that has money at 1% and we're being forced to buy money at 6%

done up like a kipper we was.

naw, they're party poopers the lot of em. so what if there was a bit of sick on the dance floor? it's a party aint it?

eoinbn

Festus wrote: »

Thing is, now it is even cheaper. Why can't we borrow at the ECB rate of 1%?

Something stinks when we're shut out of a market we voted for that has money at 1% and we're being forced to buy money at 6%

Germany doesn't borrow at 1%, it borrows at ~4%. You are confusing the rate of interest that banks are charged for money with the rate at which countries borrow.

Festus

eoinbn wrote: »

Germany doesn't borrow at 1%, it borrows at ~4%. You are confusing the rate of interest that banks are charged for money with the rate at which countries borrow.

Very confused - why can't we borrow at current ECB rate of 1%. We are in EU after all.

kaiser sauze

Festus wrote: »

Very confused - why can't we borrow at current ECB rate of 1%. We are in EU after all.

The ECB rate is what the ECB will lend to banks at.

This is why when the ECB rate goes up, your mortgage rate will go up, the cost to your bank to fund the advancing of your loan has gone up.

The bond markets is where sovereign nations will usually borrow, and we are locked out of that now due to being quoted over 9%.

Festus

kaiser sauze wrote: »

The ECB rate is what the ECB will lend to banks at.

This is why when the ECB rate goes up, your mortgage rate will go up, the cost to your bank to fund the advancing of your loan has gone up.

The bond markets is where sovereign nations will usually borrow, and we are locked out of that now due to being quoted over 9%.

Ok, but the main problem is with the banks - right?
So why don;t the banks borrow what they need to fill the hole at 1%

ok ok so the government guarantees and nationalisation is complicating it so privatise them again and let them borrow at 1%

Why the heck are we shoring up private and corporate debt?

zig

Festus wrote: »

Why the heck are we shoring up private and corporate debt?

Well originally it was to make sure there'd be money in the cash machines in 2008, but everything has gone horribly wrong since. You've just asked the golden question which no one can find the answer to.

kaiser sauze

Festus wrote: »

Ok, but the main problem is with the banks - right?

Yes, however, our deficit is a big concern in the short term also.

Festus wrote: »

So why don;t the banks borrow what they need to fill the hole at 1%

At the moment, Irish banks are frozen out of the inter-bank rate(*) as they have not come clean on the full extent of their losses and this makes foreign banks unwilling to lend to them.

This was why the bank guarantee was first issued, because without it, all our banks would have been frozen out of the inter-bank market and they had not enough liquid capital themselves to keep money in the ATMs.

* = the Inter-Bank Rate is another rate to be aware of, sometimes called the LIBOR (there is also the EURIBOR). This is the rates at which regular banks lend to each other. This will always be higher than the ECB rate.

Festus wrote: »

ok ok so the government guarantees and nationalisation is complicating it so privatise them again and let them borrow at 1%

To privatise them again you would have to have an initial public offering (IPO) on the stock market and right now, no investor would buy any shares in them as they have not got the cash reserves to survive in the marketplace. This is why the government is borrowing from the EFSF/IMF/Denmark/UK/Sweden to increase their capital (cash reserves) to 12% of liabilities.

Hopefully, my previous explains why they could not get the 1% rate.

Festus wrote: »

Why the heck are we shoring up private and corporate debt?

From one capitalist to another, I cannot understand why either. Something about contagion reaching other shores, but to me it would simply be the natural order of things.

"You take a risk, you eat the loss".

Festus

zig wrote: »

Well originally it was to make sure there'd be money in the cash machines in 2008, but everything has gone horribly wrong since. You've just asked the golden question which no one can find the answer to.

Well Icelandic banks apparently loaned money to politically parties, or a political party, and their former prime minister has been indicted for accepting money from banks and negligence. I don;t know what went on but presumably it was linked to bank deregulation and naughty goings on by the banks and printing krona.
Okay we didn't print euros but we did inflate our property market with phoney valuations and loaned against that - and if the loans were fractional reserve loans then that should be criminal. Maybe Anglo "donated" to FF on the understanding that nothing would be done to cool the property market and everything be done to boost and bolster it.
I recognised the property bubble since 2002 and have not seen one iota of action from the government to cool it off. If anything the last act of reducing stamp duty seem to be an effort to support a dying market.

What are the chances that proper criminal investigations will take place here against the politicians who oversaw this debacle? Cowen is probably a patsy in all this, or was, and Dirty Bertie the architect.

Will anyone be held to account or is it the old irish standby - look after your own and ask no questions you'll be told not lies.
By look after your own I'm suggesting no politician regardless of party will shaft another for fear of damning themselves.

Scofflaw

Festus wrote: »

Well Icelandic banks apparently loaned money to politically parties, or a political party, and their former prime minister has been indicted for accepting money from banks and negligence. I don;t know what went on but presumably it was linked to bank deregulation and naughty goings on by the banks and printing krona.
Okay we didn't print euros but we did inflate our property market with phoney valuations and loaned against that - and if the loans were fractional reserve loans then that should be criminal. Maybe Anglo "donated" to FF on the understanding that nothing would be done to cool the property market and everything be done to boost and bolster it.
I recognised the property bubble since 2002 and have not seen one iota of action from the government to cool it off. If anything the last act of reducing stamp duty seem to be an effort to support a dying market.

What are the chances that proper criminal investigations will take place here against the politicians who oversaw this debacle? Cowen is probably a patsy in all this, or was, and Dirty Bertie the architect.

Will anyone be held to account or is it the old irish standby - look after your own and ask no questions you'll be told not lies.
By look after your own I'm suggesting no politician regardless of party will shaft another for fear of damning themselves.

This came up in another context, but there's no real need for direct corruption, only what you might call political malfeasance and an absolutely extraordinary shell game played with an entire nation's finances.

Fianna Fáil and the PDs wanted two things - low taxes and high spending. They squared the circle by taxing credit instead of income. The government shifted much of its tax base from income tax to taxing property transactions - stamp duty and the like - and other spending. That worked because people were in any case borrowing the money to buy houses, and that credit was easy to get - so people just borrowed a little more to pay the stamp duty. That was OK, because house prices were going up, so people expected to make that stamp duty back - which is to say, the next buyer was going to borrow even more, and pay even more taxes out of that increased borrowing. People were borrowing to pay their taxes, and hoping to recoup their money out of the next borrower.

Unfortunately, that meant that the government's tax take was being funded by foreign lending to Irish banks, and being spent on social support, civil service wages, and reducing income taxes, which allowed them to buy elections. And people were borrowing to fund their lifestyles too, which meant that even more of the state's tax take came out of borrowing via VAT and other consumption taxes.

In order for the banks to keep the government's circle squared, the government neither enquired too closely into the banks' lending practices, nor looked too closely at what the banks were claiming as assets, because it was the banks' lending that filled the state's coffers, as well as funding the house price rise that made paying taxes painless.

In a sense, then, the situation now is that the government is having to backfill the hole created by the borrowing that sustained state spending using the taxes we should have been paying in the first place through the boom.

cordially,
Scofflaw

RealityCheck

eoinbn wrote: »

Germany doesn't borrow at 1%, it borrows at ~4%. You are confusing the rate of interest that banks are charged for money with the rate at which countries borrow.

Its about 2.5%.

kippy

This whole thing seems to be a massive money trail and the longer we are in it, the further up the trail the effects are felt.
Joseph Bloggs mortgage holder/Joe Blogs Developer-Irish Banks/Irish state-EU banks/EU States- ????
Where is next in line. Who lends to EU banks and EU states.....is that the end of the line, are we in a circle after that?

Festus

Scofflaw wrote: »

This came up in another context, but there's no real need for direct corruption, only what you might call political malfeasance and an absolutely extraordinary shell game played with an entire nation's finances.

Fianna Fáil and the PDs wanted two things - low taxes and high spending. They squared the circle by taxing credit instead of income. The government shifted much of its tax base from income tax to taxing property transactions - stamp duty and the like - and other spending. That worked because people were in any case borrowing the money to buy houses, and that credit was easy to get - so people just borrowed a little more to pay the stamp duty. That was OK, because house prices were going up, so people expected to make that stamp duty back - which is to say, the next buyer was going to borrow even more, and pay even more taxes out of that increased borrowing. People were borrowing to pay their taxes, and hoping to recoup their money out of the next borrower.

Unfortunately, that meant that the government's tax take was being funded by foreign lending to Irish banks, and being spent on social support, civil service wages, and reducing income taxes, which allowed them to buy elections. And people were borrowing to fund their lifestyles too, which meant that even more of the state's tax take came out of borrowing via VAT and other consumption taxes.

In order for the banks to keep the government's circle squared, the government neither enquired too closely into the banks' lending practices, nor looked too closely at what the banks were claiming as assets, because it was the banks' lending that filled the state's coffers, as well as funding the house price rise that made paying taxes painless.

In a sense, then, the situation now is that the government is having to backfill the hole created by the borrowing that sustained state spending using the taxes we should have been paying in the first place through the boom.

cordially,
Scofflaw

That also makes the tax payer culpable. I've always understood that when taking a mortgage the moeny cannot be used to pay stamp duty. In fairness the mortgage probably did not include stamp duty but some other loan did.
If that is the case and the government knew that people were taking loans to pay tax, and the government did nothing to stop the practice then while those who did it are not off the hook those who faciliated the practice - politicians, revenue commisioners and banks, need to be hung out to dry.

karlth

Festus wrote: »

Well Icelandic banks apparently loaned money to politically parties, or a political party, and their former prime minister has been indicted for accepting money from banks and negligence.

No that is not correct. He is being indicted for negligence not corruption.

Some large corporation made large campaign contributions (50.000 euros or thereabouts) to some candidates, but that is not being investigated.

Bob_Latchford

more detail on the rates from different parts inc uk

http://www.ntma.ie/Publications/2010/TechnicalNoteOnEUIMFProgrammeBorrowingRates.pdf

EFSF: 6.05 per cent per annum. In order to obtain funds for on lending to Ireland the EFSF will borrow on the international capital markets on the strength of guarantees provided by Euro area countries (excluding Ireland and Greece). In order to obtain the top AAA rating from the credit rating agencies it was necessary for the EFSF to put in place certain credit enhancements in the form of collateral and the cost of this arrangement is reflected in the interest rate charged by EFSF on its lending. The technical assumption is made that the bilateral loans from the three EU Member States will be on the same terms as the funds from the EFSF.

Bob_Latchford

3 equal parts, 2 at 5.7 & 1 at 6.05 = average of 5.81666666

Blended was a strange term its just average most people i would thought would have understood average :rolleyes: