Kenny rows with Sarkozy !

Spudmonkey

dlofnep wrote: »

The reason we cannot return to the markets is because we have an unsustainable level of debt. We will not be able to return to the markets in 3/4 years because we will still have an unsustainable level of debt.

Which we won't have in 3/4 years? Even though that will be 3/4 years borrowing 20bn a year?

dlofnep

ei.sdraob wrote: »

@dlofnep

you can not have it both ways unfortunately


i think we will have no choice but to default (thats where I agree with you) due to the unsustainable debt levels

but i do recognize that the cuts will have to be made one way or another, the gravy train has derailed (thats where we go separate ways)

I'm not having it both ways. I wish to see cuts also, but from the top-down. So I'm unsure where you're coming from.

dlofnep

Spudmonkey wrote: »

Which we won't have in 3/4 years? Even though that will be 3/4 years borrowing 20bn a year?

Our debt levels will still be unsustainable, and thus - we will not be in a position to re-enter the international markets. Economic commentators have stated that if we do not default, we will be forced to do so on sovereign debt later down the line. The prop up of banks has not stopped capital flight, and has not instilled confidence in the Irish banking sector - hence our inability to approach the markets for favourable rates.

This will continue to be the case until we have a sustainable level of debt. I'm not the only one that is saying this. We can of course implement strategic cuts to be more fiscally responsible. It's where these cuts are to be implemented that parties vary on.

ZWords

P. Breathnach wrote: »

Sometimes the facts spoil a good rant:
1. The row was not about our bailout terms, but a proposal to adopt a Common Corporate Tax Base, a matter that is largely technical, but which some people regard as the thin end of a wedge which might erode out tax independence [See http://www.rte.ie/news/2011/0311/euro-business.html].
2. Cowen also rowed with Sarkozy on the same matter [See http://www.irishtimes.com/newspaper/frontpage/2011/0205/1224289077668.html].
3. Everybody rows with Sarkozy: he's a feisty little bugger, and annoying as hell.

Kenny's posturing might make us feel better, but the suituation hasn't changed; We can't do much at all until the Euro banks go into meltdown and it is clear that Ireland is NOT to blame. Then we should welch on our committments immediately and giggle while the German banks fall like ninepins. In the meantime the 12 1/2% rate is our only source of capital supply, so let's take a leaf from our Northern friends; "No surrender". Here's hoping that the loony strain of Irish correctness that sent Dev to condole with the Germans on the death of Hitler doesn't get in the way of doing the nasty stuff...

ei.sdraob

dlofnep wrote: »

I'm not having it both ways. I wish to see cuts also, but from the top-down. So I'm unsure where you're coming from.

as is obvious from this thread the bottom and the middle already barely pay any taxes

dlofnep

ei.sdraob wrote: »

as is obvious from this thread the bottom and the middle already barely pay any taxes

People who earn more pay more, people who earn less pay less. What's the problem?

ei.sdraob

dlofnep wrote: »

People who earn more pay more, people who earn less pay less. What's the problem?

You tax them even more and they find ways not to pay, end result is less money from taxes

unless SF are planning to build a big wall to keep everyone in and impose capital controls in our little Cuba :P

dlofnep

ei.sdraob wrote: »

You tax them even more and they find ways not to pay, end result is less money from taxes

People on low wages have very little disposable income and can't afford to pay. That's the reality of the matter.

ZWords

dlofnep wrote: »

People on low wages have very little disposable income and can't afford to pay. That's the reality of the matter.

A significant proportion of the population - who have relatively low burdens in respect of rent and mortgages and medical expenses - are paying very little tax at all. These are old people, whose tax rates and medical card privileges should be on the same basis as the rest of the population.

Drumpot

The Raven. wrote: »

I would love to have heard that argument. Is there a clip of it anywhere?

I think it went something like this -

Kenny -"Well Nicholas, its been good talking to you, I just wanted to ask you one last thing. I promised the Irish people that I would fight hard on their behalf so I am going to have to publically look like I have been arguing with you. Its all for show, you know the craic".

Nicholas - "I have no problem with this Enda. I dont mind being the baddy to your people once you can keep them in check".

I would love to believe that there was heated arguments and that Kenny left them in no uncertain terms that we were going to stick up for ourselves. In the absence of tangible proof, all we have is "reports. When I start to see evidence that this "new approach" is actively making a differance I will be satisfied.

Until then I will be what everybody should be, sceptical.

Before anybody starts ranting that I am anti FG or FF, I am not affiliated with any party. I just expect more then ragtag waffle to impress me.

Soldie

dlofnep wrote: »

The reason we cannot return to the markets is because we have an unsustainable level of debt. We will not be able to return to the markets in 3/4 years because we will still have an unsustainable level of debt.

This is the shared view of many economists.

What you are saying is not just incorrect; it makes absolutely no sense.

We've been shut out of the bond markets since late October (see the yield balloon from the end of October onwards), which is long before the bail out took place. As a result of our reckless level of public expenditure, investors became more and more uncertain about the prospect of Ireland being able to pay back its debt, which is why the interest rates grew to such punitive levels. This is why our lenders of last resort (the EU and the IMF) stepped in with a strings attached deal. Even if it were the case that our debt level is what was stopping us from returning to the bond markets (which is patently not true), you still haven't explained how we'll overcome the problem of convincing the very people we have just default on to lend us some money.

dlofnep

Soldie wrote: »

What you are saying is not just incorrect; it makes absolutely no sense.

We've been shut out of the bond markets since late October (see the yield balloon from the end of October onwards), which is long before the bail out took place. As a result of our reckless level of public expenditure, investors became more and more uncertain about the prospect of Ireland being able to pay back its debt, which is why the interest rates grew to such punitive levels. This is why our lenders of last resort (the EU and the IMF) stepped in with a strings attached deal. Even if it were the case that our debt level is what was stopping us from returning to the bond markets (which is patently not true), you still haven't explained how we'll overcome the problem of convincing the very people we have just default on to lend us some money.

No it isn't. We will continue to have unsustainable levels of debt, far worse than ever before unless we default. Please explain to me how we can make it through this without defaulting, I'd love to hear it. That that very intevention was intended to restore confidence in the Irish Banking sector and stop capital flight, it failed.

It's not overcoming a problem of convincing anyone - it is a matter of sustainable versus unsustainable debt. Simply, we need to remove this ball and chain on us, correct our fiscal imbaances and return to the international markets with a sustainable level of debt.

Drumpot

Soldie wrote: »

What you are saying is not just incorrect; it makes absolutely no sense.

We've been shut out of the bond markets since late October (see the yield balloon from the end of October onwards), which is long before the bail out took place. As a result of our reckless level of public expenditure, investors became more and more uncertain about the prospect of Ireland being able to pay back its debt, which is why the interest rates grew to such punitive levels. This is why our lenders of last resort (the EU and the IMF) stepped in with a strings attached deal. Even if it were the case that our debt level is what was stopping us from returning to the bond markets (which is patently not true), you still haven't explained how we'll overcome the problem of convincing the very people we have just default on to lend us some money.

One of the reasons our bond yields went up so much was that our government lost all credibility. They kept doing Bank stress tests that were constantly proven wrong with regards to the problems within our banks. Even to this day nobody knows how deep the problems within our banks are and this is the root cause of most of our problems.

Our spending is not the major problem, it is the uncertainty surrounding the money pits of our banks. Dont get me wrong, we have to get our spending under control anyways, but had we not the debt problems within our banks we wouldnt of required the bailout.

The bond markets knew long before October that the chances of a bailout were looming. They are usually a few steps ahead of governments and everybody else and the cost is usually factored into Bond values well in advance.

We got the bailout because the yields were only going to go one way (presuming we could get anybody to buy them) and our government ran out of BS to feed the markets (who knew the game was up).

Soldie

dlofnep wrote: »

No it isn't. That that very intevention was intended to restore confidence in the Irish Banking sector and stop capital flight, it failed.

It's not overcoming a problem of convincing anyone - it is a matter of sustainable versus unsustainable debt. Simply, we need to remove this ball and chain on us, correct our fiscal imbaances and return to the international markets with a sustainable level of debt.

As per the four-year plan, most of the bail out was to go towards financing public expenditure; the remainder was earmarked for further bank recapitalisation.

Since you seem so convinced that the reason we cannot enter the bond markets is because of our debt level, I'd welcome your explanation as to why we were priced out of said bond markets before we were bailed out. The average yield on Irish ten-year bonds is just under 10% in spite of the fact that we've only drawn down some of the bail out thus far, which shows that the interest rates being offered to us are not related to our debt level.

If we were to default then our expenditure would have to fall in line with our tax revenue immediately, because we'd no longer have the EU nor the IMF to finance our deficit. The deficit currently stands at €20 billion; "correct[ing] our fiscal imbaances [sic]" would require cutting well in excess of that sum to account for the deflationary effects that would result from the cuts. It would be tantamount to dousing the budget in petrol and tossing a match on it. So much for protecting the "most vulnerable".

For what it's worth, I'd welcome a renegotiation of the deal, but the idea that we can default and then come out of that smelling of roses in a year or two is absurd.

P. Breathnach

Soldie wrote: »

... As a result of our reckless level of public expenditure, investors became more and more uncertain about the prospect of Ireland being able to pay back its debt, which is why the interest rates grew to such punitive levels...

I would add to that the point that we contribute less to the exchequer than do the citizens of other Eurozone states, particularly since we lost the Stamp Duty revenues that depended on the property bubble.

Scofflaw

Soldie wrote: »

What you are saying is not just incorrect; it makes absolutely no sense.

We've been shut out of the bond markets since late October (see the yield balloon from the end of October onwards), which is long before the bail out took place. As a result of our reckless level of public expenditure, investors became more and more uncertain about the prospect of Ireland being able to pay back its debt, which is why the interest rates grew to such punitive levels. This is why our lenders of last resort (the EU and the IMF) stepped in with a strings attached deal. Even if it were the case that our debt level is what was stopping us from returning to the bond markets (which is patently not true), you still haven't explained how we'll overcome the problem of convincing the very people we have just default on to lend us some money.

I like pictures, personally:



The Guarantee actually did a reasonable job of stabilising the situation - or, one might say, kicking the can down the road.

cordially,
Scofflaw

HarryPotter41

dlofnep wrote: »

Return to the markets with a sustainable level of debt. That is the key requirement of re-entering the markets. If our debt levels are unsustainable, nothing else matters. I am advocating a default of non-sovereign debt, not sovereign debt.

Right, so you borrow money form AIB, you then tell them you have no intention of paying it back cos you can't afford to. You use this money to lessen your debt burden and then pop into BOI down the road and expect that they will throw a lump of money at ya. And cheap money at that too. Hilarious.

Scofflaw

HarryPotter41 wrote: »

Right, so you borrow money form AIB, you then tell them you have no intention of paying it back cos you can't afford to. You use this money to lessen your debt burden and then pop into BOI down the road and expect that they will throw a lump of money at ya. And cheap money at that too. Hilarious.

Apparently, BOI either have no idea that you've just done that to AIB, or don't care because they know you're now in a better position to pay back your debts than you were before you stiffed AIB. That you might do the same to them apparently does not cross their innocent little minds, bless them.

cordially,
Scofflaw

jmayo

dan_d wrote: »

We keep our corporation tax where it is.

We leave the bailout deal sit for the moment - and go back to it at maybe 6 monthly intervals.

They've renegotiated Greece's deal to 7 years. And they're getting increasingly jittery about Portugal, Spain, and to an extent, Belgium.
Realistically, this deal has barely been in place 3 months. Let it pan out another few months, see how much more action the Gov is prepared to take to rein in spending, see how the other countries do - whether or not they need to be bailed out too - and then revisit it. There's no point going in guns blazing at this point in time, and then hailing it a disaster when nothing changes. In the long run for the EU, it's a hell of a lot better for us to be paying them back, be it with reduced interest or a longer term, than it is for us to hold up our hands and say we can't afford it.Especially if they've had to bail other countries out. But equally, we can't expect them to dance to our tune after a short time period and few token efforts that haven't achieved much towards their requirements.

I reckon....hasten slowly on this one.Our new Government isn't even in the door a week.Learn patience, and remember that saying - keep your friends close and your enemies closer.

One thing we have to wait for is Merkel to get her elections out of the way.
If she loses some of the locals like Badden-Württemberg, then expect her to be gone.
Then interesting to see what new guy/gal does.

BTW you forgot Italy. Italy is not in any great shape either and the whole Libyan crisis is not helping their oil costs.

dlofnep wrote: »

Return to the markets with a sustainable level of debt. That is the key requirement of re-entering the markets. If our debt levels are unsustainable, nothing else matters. I am advocating a default of non-sovereign debt, not sovereign debt.

Agree on defaulting on bank debts, but we need to slash our current budget deficit and be seen to be doing so.
Then we look very serious at managing our finances.
SF's proposals (no further cuts and reversing previous cuts) would make a mockery of us attempting to get further lending as we tried to keep a huge deficit.

dlofnep wrote: »

It wishes to make cuts, like any other party - but not cuts that impact on the most vulnerable in society.

Ehh who are the most vulnerable in society ?

sollar wrote: »

They want to increase the dole at a time when every working person is seeing their spending power shrivel. Crazy stuff.

The dole is too high and together with all the add ons make it unattractive for some to actually work.

Scofflaw wrote: »

I like pictures, personally:
...
The Guarantee actually did a reasonable job of stabilising the situation - or, one might say, kicking the can down the road.

cordially,
Scofflaw

That is not just an Irish issue. The EU, ECB and countries like Germany are also kicking the can down the road.
The Germans and hence the ECB are refusing to contenance quantitative easing which in all likelihood has to happen sooner or later in order to save the Euro.
They have to realise, even though they won't admit it, that Ireland, Greece, etc just cannot pay back the debts we owe to major European banks and the ECB.

This idea that all banks must be saved is garbage and it is their way of shoring up the "banking system".
They are trying to prevent the contagion spreading, but all it is doing is probably causing more long term instability.

Scofflaw wrote: »

Apparently, BOI either have no idea that you've just done that to AIB, or don't care because they know you're now in a better position to pay back your debts than you were before you stiffed AIB. That you might do the same to them apparently does not cross their innocent little minds, bless them.

cordially,
Scofflaw

Well it appeared to work for michael lyng :rolleyes:,:mad: who 41 months later has not been brought to justice or it appears had an arrest warrant issued for him.

Soldie

Scofflaw wrote: »

I like pictures, personally:

The Guarantee actually did a reasonable job of stabilising the situation - or, one might say, kicking the can down the road.

cordially,
Scofflaw

The picture doesn't load for me, unfortunately!

dan_d

jmayo wrote: »

One thing we have to wait for is Merkel to get her elections out of the way.
If she loses some of the locals like Badden-Württemberg, then expect her to be gone.
Then interesting to see what new guy/gal does.

BTW you forgot Italy. Italy is not in any great shape either and the whole Libyan crisis is not helping their oil costs.

Knew I forgot one of them!:o
Wholly agree on your marks regarding Merkel's elections....many of her remarks are driven by domestic politics.

dan_d

ei.sdraob wrote: »

It is interesting how Greece gets a further reduction with no strings attached, yet we have to increase corpo rate in return :rolleyes:

Very.Sorry about the double post, but I also wanted to know what Greece agreed to in order to get the reduction on their loan?Or is it just a general consensus that the Greeks have pushed through much harsher austerity measures than we have??

Scofflaw

Soldie wrote: »

The picture doesn't load for me, unfortunately!

Sorry - should be available directly here: http://i55.tinypic.com/14wc58w.gif

jmayo wrote:

Well it appeared to work for michael lyng , who 41 months later has not been brought to justice or it appears had an arrest warrant issued for him.

Now if only Ireland were a single individual as opposed to a country...

cordially,
Scofflaw

Scofflaw

dan_d wrote: »

Very.Sorry about the double post, but I also wanted to know what Greece agreed to in order to get the reduction on their loan?Or is it just a general consensus that the Greeks have pushed through much harsher austerity measures than we have??

No, they also increased the value of state assets to be sold from €7bn to €50bn:

Greece insisted Monday that a target of raising euro50 billion from by development of state assets by 2015 was realistic, but that the issue should not have been announced by the country's international debt inspectors.

The first public spat between Greece and its international rescuers broke out over the weekend after representatives of the International Monetary Fund, European Central Bank and European Commission said Friday that Greece must privatize euro50 billion ($68 billion) in state assets by 2015 and speed up structural reforms in coming months to keep its troubled finances afloat.

The three institutions, collectively known in Greece as the troika, are supervising reforms essential to the disbursement of funds from a three-year euro110 billion package of rescue loans that saved Greece from defaulting on its debts.

Source: http://www.bloomberg.com/news/2011-02-14/greece-50-billion-from-state-property-feasible.html

cordially,
Scofflaw

HarryPotter41

Scofflaw wrote: »

Apparently, BOI either have no idea that you've just done that to AIB, or don't care because they know you're now in a better position to pay back your debts than you were before you stiffed AIB. That you might do the same to them apparently does not cross their innocent little minds, bless them.

cordially,
Scofflaw

The difference here is that BOI will be reading it in every paper in Europe and on every TV channel in Europe as well. So while that idea might work with Fisher Price banking, not in the real world.

ei.sdraob

Germany and France are fighting global rules that would force lenders such as Deutsche Bank AG (DBK) and BNP Paribas SA to reveal their reliance on debt, according to an internal note prepared by the European Commission.

The euro region’s two biggest economies are “fiercely against” proposals drawn up by the Basel Committee on Banking Supervision for lenders to reveal as soon as 2015 whether they would meet a cap on borrowing, known as a leverage ratio, that may only become binding three years later. Austria and Greece are also opposed, according to the document obtained by Bloomberg News.

http://www.bloomberg.com/news/2011-03-11/germany-france-said-to-fight-basel-rules-forcing-banks-to-reveal-leverage.html


So what do the Germans and French have to fear :rolleyes:

Our corporation tax could be a ploy to distract people from the the fact that German and French banks might not actually be as strong as they are made out to be.