varadkar reckons we may need new bailout

lg123 · 29-05-2011 12:12PM #1

spotted this on yahoo news but nothing on RTE?! http://uk.finance.yahoo.com/news/Minister-says-Ireland-need-reuters_molt-4042519936.html?x=0

i'm not in ireland so not fully in the loop, i thought things were on track(ish) with the bailout?

[or have i just made myself look like an idiot]

ei.sdraob · 29-05-2011 12:15PM

Yeh heard the same on the radio there,
I posed this question 6 months ago, how the hell are we meant to be back to the bond-markets in 2012? Things have only gotten worse since that thread.

D1stant · 29-05-2011 12:21PM

Yeah nice work FG. The minister for Transport tells us?

FG/Labour have now backtracked on just about everything in their manifestos. Which is no surprise, but they could at least get the messaging coherent. Between this and the Bruton fiasco to screw lower paid workers even more

Count Dooku · 29-05-2011 05:03PM

i.e. he admitted that even increased by 30% taxes in 2014 will be not able to cover deficit and government doesn't have plan to cut welfare/PS payroll bill

pog it · 29-05-2011 05:14PM

Duh. Hope this isn't a surprise to people.

We will owe €173 bn by end of this year. 200bn by next year.

mlumley · 29-05-2011 05:22PM

And they keep telling us that we will pay all debts. There is no way this can be done by taking money from the economy, when they gonna cop on that default is the only way out.

Noreen1 · 29-05-2011 07:17PM

mlumley wrote: »

And they keep telling us that we will pay all debts. There is no way this can be done by taking money from the economy, when they gonna cop on that default is the only way out.

They also keep yammering about "consumer confidence".

The truth is, that people cannot spend money in the local economy that they don't have......... yet the "expert" answer to the nations problems is to take more money from peoples pockets........

Honestly, most people couldn't make this waffle up - but we're supposed to be good little citizens, and believe it!:rolleyes:

Sure it's all going according to plan....
The question is, who is the plan supposed to benefit? It most certainly hasn't helped the Irish citizen....

Flex · 29-05-2011 07:48PM

Noreen1 wrote: »

They also keep yammering about "consumer confidence".

The truth is, that people cannot spend money in the local economy that they don't have......... yet the "expert" answer to the nations problems is to take more money from peoples pockets........

Honestly, most people couldn't make this waffle up - but we're supposed to be good little citizens, and believe it!:rolleyes:

Sure it's all going according to plan....
The question is, who is the plan supposed to benefit? It most certainly hasn't helped the Irish citizen....

Whats the alternative so? We're still living way beyond our means as a country and the only reason we still have this standard of living that we have right now is because we're living on borrowed money. That borrowed money is finite and is going to run out soon. We havent really done anything meaningful to address the deficit since this mess started either.

Seriously, do people think the government is cutting spending/raising taxes/implementing levies for the craic or something???

Noreen1 · 29-05-2011 08:00PM

Flex wrote: »

Whats the alternative so? We're still living way beyond our means as a country and the only reason we still have this standard of living that we have right now is because we're living on borrowed money. That borrowed money is finite and is going to run out soon. We havent really done anything meaningful to address the deficit since this mess started either.

Seriously, do people think the government is cutting spending/raising taxes/implementing levies for the craic or something???

I don't believe they're cutting spending for the craic.

What I do believe, is that three years of cuts has caused the economy to contract. People cannot spend what they don't have.
Therefore, it's not unrealistic to expect further contraction as cuts deepen - hence my point about "consumer confidence" being spin - and unrealistic spin, at that.

Pre the bank guarantees, the answer would have been a government backed stimulus plan.
Since that is not an option, given the ridiculous cost of borrowing/the atrocious lack of foresight during the "boom" - the only option, now, would appear to be an employment strategy.

Unfortunately, what passes for an employment strategy appears to be a "free labour" scheme, that neither increases the Government tax take, reduces the Welfare bill, or creates any extra income to spend in the real economy.

Like I said - you couldn't make it up!

AlekSmart · 29-05-2011 08:42PM

Noreen1 wrote: »

They also keep yammering about "consumer confidence".

The truth is, that people cannot spend money in the local economy that they don't have......... yet the "expert" answer to the nations problems is to take more money from peoples pockets........

Honestly, most people couldn't make this waffle up - but we're supposed to be good little citizens, and believe it!:rolleyes:

Sure it's all going according to plan....
The question is, who is the plan supposed to benefit? It most certainly hasn't helped the Irish citizen....

This aspect of the Richard Bruton solo-run did catch my eye right nuff....:rolleyes:

I'm at a loss to see how Richard Bruton can manage to prove how significantly reducing the wages of the very lowest echelon of the Irish Labour market will significantly boost Irelands competitiveness.

I feel his reasoning is open to challenge.

What is not challengeable is the reality that reducing the Sunday and Shift Premia paid to many sectors of blue-collar workers will significantly and immediately reduce the States PAYE,PRSI and USC income.

Given that Mr Brutons fellow Minister Ms Burton has robustly resisted any large scale reductions in Social Welfare payments then it's kinda baffling where Mr Bruton will get the money to pay Ms Burtons "customers".....unless he has a Cunning Plan ?

Rather than continuing with a policy of disincentivizing the actual process of Work itself through enthusiastic tomfoolery such as the Working Time Act,this Government needs to stop making WORK a dirty word.

Nijmegen · 29-05-2011 09:24PM

The 8.5% contraction in retail sales and the increase in Irish bond yields to over 12% would seem to indicate that neither the punter on the street or in the international markets has very much faith in Ireland Inc.

Ireland is now living in the same sort of 'soft landing for the property market' delusion regards financial collapse.

squod · 29-05-2011 10:53PM

Thanks to everyone who voted FF or FG in the last election. NOT :mad:

D1stant · 29-05-2011 11:31PM

squod wrote: »

Thanks to everyone who voted FF or FG in the last election. NOT :mad:

And labour was ok?

The only party that would have deviated from the FF path was SF and we all know it.

Diarmuid · 30-05-2011 06:02AM

squod wrote: »

Thanks to everyone who voted FF or FG in the last election. NOT :mad:

if only we had a Labour/Sinn Fein government, they could have already sowed the magic beans to grow the money tree

The level of cuts coming down the road for Ireland is clearly going to come as a shock to some. Considering the size of the hole we are in, that's shocking in itself.

femur61 · 30-05-2011 08:29AM

Sam Smyth highlighted again we're borrowing money from nations to pay the PS who get a lot less than our PS here. Doesn't make sense at all, I can't fathom at all the hold unions have in this country. Only 18% are employed in the PS but yet we seem to be held to ransom. Unless there is a wage restructering we will have to default and many people seem to think thats a great idea, but where then will we get money to pay the PS and frontline services. And before people start the mantra that Iceland did default, now have some growth realise there was and still is extreme poverty in that country.

Anyway back to the point he is on the radio this morning saying it was a hypothetical question and a hypothetical answer!

ei.sdraob · 30-05-2011 09:09AM

femur61 wrote: »

Sam Smyth highlighted again we're borrowing money from nations to pay the PS who get a lot less than our PS here. Doesn't make sense at all, I can't fathom at all the hold unions have in this country. Only 18% are employed in the PS but yet we seem to be held to ransom. Unless there is a wage restructering we will have to default and many people seem to think thats a great idea, but where then will we get money to pay the PS and frontline services. And before people start the mantra that Iceland did default, now have some growth realise there was and still is extreme poverty in that country.

Anyway back to the point he is on the radio this morning saying it was a hypothetical question and a hypothetical answer!

While you have a point above, you are missing the fact that half of the debt is socialized banking debt.

All calls for default/restructuring have been on the banking portion of the debt which has made the overall position unsustainable. The only people calling for complete default are SF.
The reason the bonds have gone to 12% is that investors in what was meant to be safe government bonds are waking up to the fact that they are no longer safe now that the government doubled its debt burden by socialising unrelated bank debt.

This is yet another thread where one needs to point distinguish that our position is made up of 2 problems, and no the banking issue does not excuse public spend waste and vice versa!

pog it · 30-05-2011 10:16AM

Brian Lucey says we have three main categories of debt (I previously thought there were only the two).

The sovereign debt (used to pay for roads, etc.), Nama bonds, and the banks debt. I had been kinda seeing the nama bonds and the bank debt as going together but there must be a differentiation I guess since they have been separated.

Did you hear about the news that for Nama to break even, or not to lose even more, the upwards only rent review has to be maintained! This is so not going to help the wider economy.

I think the main problem is that the Irish Government have not outlined clearly to us what their exact plan is and are really lucky that people are not calling for true clarification. I think there needs to be a state address about the current and future situation and about where they are taking us as regards state assets being sold, taxation, etc. People should be made aware as right now there is a serious sense of denial amongst the population as another poster here pointed out.

ei.sdraob · 30-05-2011 10:28AM

Unfortunately the NAMA plan backfired, it was meant to take **** of the banks and put it into SPV to hide the debt for a decade or so.
But this trick didnt workout to well and is seen now as state debt.

Historically there are only two ways out of so much debt for a state:
* Devalue - not possible
* Default/Restructuring/Renegotating - were we are heading

Some here keep towing the party line that there is a 3rd way of repaying the debt and growing our way out of it and cutting any waste,
I used to think this is what will happen, but once the banking debt was added and Croke park event, no to so anymore.

So far in this crisis every wrong option was pursued first, so we might well endup with a case of all 3 options being ran thru.

dan_d · 30-05-2011 10:45AM

If I was Enda Kenny, I'd be slapping Varadkar across the back of the head right now. For not keeping his trap shut. He's the Minister for Transport for heaven's sake. Surely he'd be better off sticking to what he knows and not commenting on things that are not within his brief?

I'm all for telling the truth. If we had done that 2 years ago, things probably wouldn't have got this bad. But s*&t, we've all seen in the last few years what a few off-the-cuff Ministerial comments have done to "spook" these magical markets, that seem to control everything when it comes to a country's finances. He may be telling the truth, particularly in relation to the banking debt that we've taken on. However, does he really think that he's going to help the situation at all by making random statements like this? Seriously? Does he not know the media will run rampant on this, with all Morgan Kelly's and David Mc William's up on their soap boxes shouting from the roof tops again? (they must love seeing headlines like this - I'd imagine they rub their hands together with glee!) Haven't our politicians learned anything in the last 2 years? They don't seem to have a plan at all - so they'd want to come up with a definite one, sharpish, and until that's done, keep their mouths shut.

pog it · 30-05-2011 10:54AM

What are the chances that they are going to sell state assets in some form or another, bring in a wad more taxes, and hope that the economy will start to grow? (yes the irony of it all). Is this their sole plan? And if it is, how can this work?

If anything I'm spending less and less as the recession continues and a lot of that is due to uncertainty and I'm sure there are hundreds of thousands like me. I also think that most people who have been paying off credit card debt will have learned their lessons about overspending and will be careful for many years to come. Again how can this substantially help the economy?

Eamon Gilmore actually dismissed the Ernst and Young report which forecasts the economy will not grow this year and said that 'everyone else' is forecasting growth, from the ERSI and the Department of Finance (Lol).

I think we need to oppose the next budget if it targets the ordinary people any more. That's when we are finally going to have to have mass protests and tell them enough is enough.

Tora Bora · 30-05-2011 11:33AM

dan_d wrote: »

If I was Enda Kenny, I'd be slapping Varadkar across the back of the head right now. For not keeping his trap shut. He's the Minister for Transport for heaven's sake. Surely he'd be better off sticking to what he knows and not commenting on things that are not within his brief?

.

Hang on a minute! Isn't Varadker, the new minister, who declared a few weeks ago, his new found fame, meant he couldn't socialise or go for a few scoops anymore, without being surrounded by back slappers and the opposite:) He reckoned, the best he can do anymore to relax, is get home from the job, to his empty apartment, and crack open a sliced pan and a few slices of ham, and sit down to watch another riveting episode of Vincent Browne:cool:

The lad, has cracked already and is reading off script. Headmaster Enda, might have to give him a serious amount of lines to write.
"We will not need another bailout"
"We will not need another bailout"
"We will not need another bailout"
"We will not need another bailout" .....................

Then there's Bruton, fecking off on a personal agenda

"I must not have personal agendas"
"I must not have personal agendas"
"I must not have personal agendas"
"I must not have personal agendas" .........................

Nijmegen · 30-05-2011 11:38AM

Well, we're supposed to return to the markets who will, having seen our successful financial adjustment under the EU/IMF deal, provide lending to us at affordable rates.

It perhaps beggars reality then to say that we won't need a second bailout when our bond yields are at an all time high, over 12%.

Are they going to fall the day before we're due to go back to the markets?

We will, I presume, have a soft landing?

astrofool · 30-05-2011 12:17PM

I don't doubt that we'll need another bailout, and then another and another, until it hits breaking point and we default.

However, while the EU/IMF is willing to bankroll us, we may as well take the money, interest rate on the loans won't matter if we default anyway.

Ministers should, however, keep quiet about it, as it will cause the EU/IMF to lose face, and possibly withdraw the bailout money sooner, forcing an earlier default.

We can in the mean time, keep cooking the numbers to show that we're on track, keep moving expenditure and revenue between the quarterly books so it looks like we're on the "road to recovery".

Until Germany accepts that inflation is going to happen, it's all just a big dance.

dan_d · 30-05-2011 12:19PM

The thing is that statements like that feed the problem. We might have trouble going back to the markets - a minister suggests this may mean we will need another bailout - the markets do their spooking thing (!) - more suggestions of another bailout - markets run around screaming - and lo and behold, we need another bailout.

It's a self-fulfilling prophesy - type - thing (!). In other words, Varadkar et al should keep their mouths shut until things like this are a definite.

pog it · 30-05-2011 01:59PM

I have a feeling that Varadkar is one of the most ambitious politicians of the lot, and perhaps he's saving himself now with this warning, before the **** properly hits the fan? Which means he's anticipating disaster and this is career damage control?

_Kaiser_ · 30-05-2011 03:44PM

pog it wrote: »

I have a feeling that Varadkar is one of the most ambitious politicians of the lot, and perhaps he's saving himself now with this warning, before the **** properly hits the fan? Which means he's anticipating disaster and this is career damage control?

I've no dout that Varadkar and Kenny and the rest of the senior leadership know EXACTLY what's coming and when - but they're attempting to prevent a full scale panic by staving it off as long as possible by only revealing as much as they have to/the public is ready to know.

The dog in the street knows that default is virtually inevitable at this stage but there's a big difference between citizens bitching in a pub/online to each other and the leaders of a country saying it.

The problem though is that the way they're doing it (by stripping the public to the financial bone) which is only going to deepen the effects of the inevitable collapse and increase the time it'll take for us to recover from it.

Tora Bora · 30-05-2011 03:53PM

Kaiser2000 wrote: »

I've no dout that Varadkar and Kenny and the rest of the senior leadership know EXACTLY what's coming and when - but they're attempting to prevent a full scale panic by staving it off as long as possible by only revealing as much as they have to/the public is ready to know.

The dog in the street knows that default is virtually inevitable at this stage but there's a big difference between citizens bitching in a pub/online to each other and the leaders of a country saying it.

The problem though is that the way they're doing it (by stripping the public to the financial bone) which is only going to deepen the effects of the inevitable collapse and increase the time it'll take for us to recover from it.

Michael Noonan, is probably increasing his investments in German bunds:pac:

monkeybutter · 30-05-2011 06:58PM

Amazing how like FF FG is, they even spout the same lies, fair play to leo for giving an honest answer

Amhran Nua · 30-05-2011 07:16PM

mlumley wrote: »

And they keep telling us that we will pay all debts. There is no way this can be done by taking money from the economy, when they gonna cop on that default is the only way out.

Just a quick word on this, default is only a way out if we have no deficit. Straight after we default, or restructure or whatever, nobody will be lending to us for a few years. So either the books are in order or they will be put in order immediately, which means massive cuts on all sides.

pog it · 30-05-2011 07:42PM

monkeybutter wrote: »

Amazing how like FF FG is, they even spout the same lies, fair play to leo for giving an honest answer

And that's exactly what he wants you to think. Isn't he great?

Yahew · 30-05-2011 08:09PM

Amhran Nua wrote: »

Just a quick word on this, default is only a way out if we have no deficit. Straight after we default, or restructure or whatever, nobody will be lending to us for a few years. So either the books are in order or they will be put in order immediately, which means massive cuts on all sides.

Thats a tired old mantra. I'd say if we default on bank loans the sovereign debt holders wont give a sh*t.

Amhran Nua · 30-05-2011 09:03PM

Yahew wrote: »

Thats a tired old mantra. I'd say if we default on bank loans the sovereign debt holders wont give a sh*t.

Maybe not. Are you willing to take that risk? If four million people depended on it, would you then be willing to take that risk? The smartest answer right now is to cut the deficit down to size, then we can do what we like, or at least have more options than now.

Delancey · 31-05-2011 12:12AM

Amhran Nua wrote: »

Maybe not. Are you willing to take that risk? If four million people depended on it, would you then be willing to take that risk? The smartest answer right now is to cut the deficit down to size, then we can do what we like, or at least have more options than now.

That is precisely what Morgan Kelly had advocated and while his argument has merit I also have to agree with what Enda Kenny said when he compared Kelly's proposal to giving the economy a '' lethal injection ''.

Amhran Nua · 31-05-2011 12:25AM

Delancey wrote: »

That is precisely what Morgan Kelly had advocated

I'm advocating spreading it over three to five years. A little tight on the upper end but doable. Keep in mind that if expenditure was at 2004 levels, we'd be breaking even right now, it multiplied during the last ten years. At this point the government seems to be pursuing a policy of "anything but serious cuts", apparently fearing the unions more than bankruptcy and operating under the delusion of some deus ex machina, however I absolutely guarantee this attitude is going to get adjusted sooner rather than later.

fliball123 · 31-05-2011 08:29AM

Amhran Nua wrote: »

I'm advocating spreading it over three to five years. A little tight on the upper end but doable. Keep in mind that if expenditure was at 2004 levels, we'd be breaking even right now, it multiplied during the last ten years. At this point the government seems to be pursuing a policy of "anything but serious cuts", apparently fearing the unions more than bankruptcy and operating under the delusion of some deus ex machina, however I absolutely guarantee this attitude is going to get adjusted sooner rather than later.

The problem is that we are still spending too much ...For this country to be back on the up some severe cuts to all areas of spend along with more taxes need to be frontloaded again not spread out over more years...The country if f(#$@ed one way or the other better to pull the plaster off fast than a number of slow sharp jerks IMO

Scofflaw · 31-05-2011 09:00AM

fliball123 wrote: »

The problem is that we are still spending too much ...For this country to be back on the up some severe cuts to all areas of spend along with more taxes need to be frontloaded again not spread out over more years...The country if f(#$@ed one way or the other better to pull the plaster off fast than a number of slow sharp jerks IMO

At times like these it's important to recall that analogies are a tool for explaining things, rather than a guide to appropriate action.

cordially,
Scofflaw

monkeybutter · 31-05-2011 10:30AM

pog it wrote: »

And that's exactly what he wants you to think. Isn't he great?

What?

Jaysoose · 31-05-2011 10:39AM

fliball123 wrote: »

The problem is that we are still spending too much ...For this country to be back on the up some severe cuts to all areas of spend along with more taxes need to be frontloaded again not spread out over more years...The country if f(#$@ed one way or the other better to pull the plaster off fast than a number of slow sharp jerks IMO

The adjustments should have been made 2 years ago..we are still looking at the same issues and i honestly think Enda and the lads are hoping it just goes away..

Bits_n_Bobs · 31-05-2011 11:10AM

I think (hope?) they are looking for political cover for taking on the Unions, which they will receive from the troika come September when the missed deadlines and general unreality of Croke Park is revealed.

In the meantime however they should really be getting a move on in tackling the professions. It's also a disgrace that they still have done nothing to sort out the bankruptcy legislation in this country, not to mention the long awaited whistleblowing legislation. These things are ready to go, will make an immediate improvement and there's zero excuse not to get on with them.

pog it · 31-05-2011 11:35AM

Scofflaw wrote: »

At times like these it's important to recall that analogies are a tool for explaining things, rather than a guide to appropriate action.

cordially,
Scofflaw

At times like these it's more important to listen to Morgan Kelly than trust in the government to take 'appropriate action'.

Sincerely,
Pog it

Browney7 · 31-05-2011 01:06PM

pog it wrote: »

I have a feeling that Varadkar is one of the most ambitious politicians of the lot, and perhaps he's saving himself now with this warning, before the **** properly hits the fan? Which means he's anticipating disaster and this is career damage control?

My thoughts exactly.

monkeybutter · 31-05-2011 01:54PM

That's very cynical now isn't it, he is the only one speaking the truth, we may need a second bailout as we don't control the bond markets, so no one can categorically say we won't.

2012 may be too soon for us. 2022 may be too soon for us.

My main complaint with governments is they don't communicate with the electorate, it's about time they did, so I'll spair the cynicism for the time being.

The other line is NO NO we won't need a bail out, NO NO, oh wait yes, we do need a bailout, that is Enda Kenny and that was Brian Cowen.

Daegerty · 31-05-2011 11:28PM

I don't really care how many bailouts Varadkar thinks we need. I'd be more interested to hear what the Varadbus has to say for itself

recedite · 01-06-2011 09:25AM

Honesty is the best policy.
The German electorate values honesty. The Greek and Irish want cunning politicians. In the end though, we all get the govt. we deserve.

ztrey · 10-06-2011 05:21PM

whatever goverment are in power if they say one thing generally the oppsite will apply,ie ff told us there will be no bailout at the same time nama were here 2 discuss our bailout,fg said no 2 tax hikes in election but guess what yep more tax hikes on d way.i reckon vadraker got it right a 2nd bailout may be on d way

varadkar reckons we may need new bailout

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