The Irish Republic

[manshimajin]

Like you Pongo I would confirm that Ireland did not vote against the Euro. They were enthusiatic early adopters with what was recognised at the time as the most effective changeover of any EU country. There were two 'No' votes - the Nice Treaty and the Lisbon Treaty which were both about changes to the EU constitution and structure. Ultimately the Irish votres accepted both with some changes.

 

For a long time the Euro has been very good for Ireland. The problem, which is now emerging in a big way, is of course that the € interest rate cannot be set to deal with every country's interest rate needs. Ireland would have benefitted from a much higher interest rate when the housing boom started to overheat. But interest rates are not the only controls that can be exercised if there is a Central Bank that is not hand in glove with the banks. For example the Central Bank could have set tighter lending rules, higher bank capital requirements for developer and home loans to reflect risk, review of the sources and amounts of wholesale funding, tighter reviews of the banks' risk management etc... Sadly it would appear that a high degree of cronyism existed between politicians, regulators, banks and developers in Ireland so the brakes were not applied by the regulator when they should have been. That is not the fault of the Euro.

 

In reality some of the same issues probably apply in the Sterling area (compounded by the inability to use sterling notes in the different component parts of the area). The South East of England (and the IOM) could probably have benefitted from higher interest rates much earlier to stop the unhealthy inflation of property prices. But the North would probably have benefitted from lower interest rates to stimulate the economy there and attract investment. Neither the euro nor sterling are perfect and require better regional management than often happens.

 

On the issue of Irish corporate tax. Brian Lenihan, the Finance Minister, has stated unequivocally on RTE this lunchtime that he has had reassurances from EU partners that there is no requirement to change the rate upwards. He also hinted that the IMF were supportive of the rate because of the need to grow the economy as well as to control costs.

[Barrie Stevens]

The ironic thing for Ireland is that they originally voted No for joining, and were then bullied by Europe into scrapping through a yes vote.

 

Eh ? Ireland held a referendum on the Maastricht Treaty. It was supported by a very significant majority. This led to Ireland ultimately adopting the Euro when it was launched.

 

There was no specific separate vote apart from that. It was the policy of successive govts - govts which had been democratically elected. Ireland was one of the original Euro countries.

 

The Isle of Man also signed into the Maastrict Treaty (as amended) during the days of now Sir Miles Walker when he was then Chief Minister. I recall asking for it at Tynwald Library and Crown Division produced the original for me from the safe by appointment. Don't bother, impossible to understand unless you are Eurocrat! I recall that it gave the Manx nominal EU citizenship as an adjunct to their British status and the right to ask for help from the consulates etc of EU members if a British one was not available. There were lots of other provisions having potential to be invoked in the future as/if the EU takes over!

[P.K.]

So they'll be asking for a "contingency loan" to see them over the hard times ahead.

 

But will it be EU, IMF or both?

[manshimajin]

But will it be EU, IMF or both?[/font]

They are saying on RTE a mix of Eurozone, UK, Sweden and IMF.

 

It will be interesting to see if this stops the bond market from upping lending rates to Spain and Portugal. Probably 3-6 months out will tell.

[slinkydevil]

Republic of Ireland confirms EU financial rescue deal

Under the bailout scheme, income tax will increase but the country's low 12.5% corporation tax - controversial for some other countries but "non-negotiable" for the Irish government - will not be touched.

 

http://www.bbc.co.uk/news/business-11807730

[manshimajin]

Getting more complicated. The rats are deserting the sinking ship. The Greens want an election following the Budget, the independents want an election before a Budget, the Fianna Fáil backbenchers are wanting Brian Cowen to resign a.s.a.p.

 

Could become very messy if Ireland can't sort out its Budget quickly to at least set a path for the next 12 months.

 

More 'watch this space' and potentially the impact of uncertainty on other weak EU economies.

[Mutley]

5 years time it'll all be a distant memory....

[The Old Git]

Trying to get my head around how big a loan it is per head of population. Assuming the smaller definition of billion it seems to work out at about £18,000 per person.

[pongo]

I love Wikipedia.

 

Like the bank, the Chancellor is Anglo Irish himself and heir to the Osborne baronetcy (of Ballentaylor, in County Tipperary, and Ballylemon, in County Waterford).

 

I wonder how long it will be before the Eurosceptics pick up on that and invent a conspiracy

[cheesypeas]

Getting more complicated. The rats are deserting the sinking ship. The Greens want an election following the Budget, the independents want an election before a Budget, the Fianna Fáil backbenchers are wanting Brian Cowen to resign a.s.a.p.

 

Could become very messy if Ireland can't sort out its Budget quickly to at least set a path for the next 12 months.

 

More 'watch this space' and potentially the impact of uncertainty on other weak EU economies.

 

How come we were all hearing about the 'pigs', but not Ireland?

Isn't the Irish prolem as big as say Portugals?

[manshimajin]

How come we were all hearing about the 'pigs', but not Ireland?

Isn't the Irish prolem as big as say Portugals?

I thought Ireland was one of the PIIGS.

 

The Irish problem looks to be much greater then Portugal's. But if you break it down into the Banks and the Government costs, Ireland is in deep trouble with the guarantee it gave on the banks and the banks dishonesty in revealing the appalling quality of the assets they were holding against their loans. In terms of Governement spending Ireland has been one of the most responsible countries in the EU in dealing with its deficit. It has already had 3 tough budgets with the next one due 7 December. The danger on that front IMO is that it has to balance cutting deficits with encouraging economic growth which is a mighty difficult act to get right.

[cheesypeas]

How come we were all hearing about the 'pigs', but not Ireland?

Isn't the Irish prolem as big as say Portugals?

I thought Ireland was one of the PIIGS.

 

The Irish problem looks to be much greater then Portugal's. But if you break it down into the Banks and the Government costs, Ireland is in deep trouble with the guarantee it gave on the banks and the banks dishonesty in revealing the appalling quality of the assets they were holding against their loans. In terms of Governement spending Ireland has been one of the most responsible countries in the EU in dealing with its deficit. It has already had 3 tough budgets with the next one due 7 December. The danger on that front IMO is that it has to balance cutting deficits with encouraging economic growth which is a mighty difficult act to get right.

 

I should have gone for the Irish spelling.

[Mutley]

Recovery Plan unveiled

 

My initial thoughts - reducing min wage will just make it more attractive to be on social welfare. Increasing VAT will just push shoppers over the Border again meaning less spends in the South. Not much of a plan so far....

[Sean South]

Recovery Plan unveiled

 

My initial thoughts - reducing min wage will just make it more attractive to be on social welfare. Increasing VAT will just push shoppers over the Border again meaning less spends in the South. Not much of a plan so far....

Reducing the min wage won't push more people on the Dole because the Dole is being cut too. Your assertion about the VAT is spot on though. The British Government won't be long getting a payback on their £7billion loan when the shoppers begin their weekly shopping crusade over the border. It is estimated that in November and December 2008 Irish shoppers contributed over £1billion in VAT to the Chancellor via Northern Ireland shopping. The clowns in power in Ireland are even more clueless than I thought possible. I said before and I say again The IoM needs to declare a VAT free status and turn the quay into a massive shopping centre and run ferries over and back to Ireland.

 

Seriously though, someone else posted earlier that Irish banks owe €80billion. I believe that's conservative. The Govt should have taken the smart decision and shut them (Bank of Ireland, AIB and Anglo) down fortwith, paid out the depositors and burned the bond holders. Instead they have done the opposite and have royally fucked the small shareholders and compensated the bond holders. The Government have shown shocking or even criminal stupidity and, sadly, are continuing to do so.

 

They need to make a stand now and refuse the EU/IMF aid in it's current format with the associated strings attached. Ireland are in a far better bargaining position than they realise and can hold out for a far better deal than they are getting.

[Mutley]

Reducing the min wage won't push more people on the Dole because the Dole is being cut too.

 

That wasn't clear when I posted. However there is no details of any dole cuts - just a "review". So far it's pretty slim on actual details on some of the major points. As usual the poor, working class and middle class are getting fucked. Politicians and their rich cronies getting off as expected. Full text of recovery plan here.