Irish Govt raises four-year austerity target to €15bn

[rory_20_uk]

The other main party was incapable of doing so after 13 years and an unmatched (and unfunded) spending bonanza, so no one else appears able to.

Achieving change in the UK would require:

Sorting out the way GCSE and A level papers are set (different exam boards competing for business based on grades, not results)
Realignment of teachers and their powerful unions (improving moral and autonomy, helping and if required weeding out the dreadful teachers, remove blinkered focus on grades)
A reappraisal of what is the point of school in the first place.

As most MPs are going to send their children to good state schools or Private schools anyway, there is no incentive for sorting it out (unless they want increased competition for their own offspring).

[Beskar]

What makes this situation more amusing, Britain and other nations have to bail out Ireland, while Ireland are passing stupid budget decisions like giving everyone free cheese.

"Free Cheese for Everyone!" "But sir, we have no money?!" "Who cares? We will get free bail-out and free cheese!"

[Furunculus]

What makes this situation more amusing, Britain and other nations have to bail out Ireland, while Ireland are passing stupid budget decisions like giving everyone free cheese.

"Free Cheese for Everyone!" "But sir, we have no money?!" "Who cares? We will get free bail-out and free cheese!"

what makes this sad is that germany caused this situation by botching discussion of haircuts on future defaults and thus sparking speculation on irelands financial position, and then all the euro nations strong-arm ireland into accepting a bail-out they didn't need because that speculation was threatening the other peripheral members.

it took less than a week to make ireland a satrapy of brussels, and if that seems like hyperbole then i recommend you read your gladstone:

"The finance of the country is intimately associated with the liberties of the country. It is a powerful leverage by which English Liberty has been gradually acquired … It lies at the root of English Liberty, and if the House of Commons can by any possibility lose the power of the control of the grants of public money, depend upon it, your very liberty will be worth very little in comparison …That power can never be wrenched out of your hands… That powerful leverage has been what is commonly known as the power of the purse – the control of the House of Commons over public expenditure – your main guarantee for purity – the root of English liberty. No violence, no tyranny, whether of experiments or of such methods as are likely to be made in this country, could ever for a moment have a chance of prevailing against the energies of that great assembly. No, if these powers of the House of Commons come to be encroached upon, it will be by tacit and insidious methods, and therefore I say that public attention should be called to this."

[Louis VI the Fat]

How an innovative economic succes was betrayed by cronyism, corrupt politicians, and short-sightedness and greed of the Irish themselves. The fun Celtic Tiger had changed into a corrupt basket case, were taxation had been replaced by pyramid games.

The Irish boom saw a vast property bubble puffed up by appallingly managed banks with the complicity of idle regulators and political cronies. House prices between 1994 and 2006 rose by around 520%. The relationships between developers, their financiers and the officials who authorised the building spree were usually cosy, often corrupt. Towards the end of the growth years, the country's financial sector descended into full-blown mania. Banks doled out credit indiscriminately and borrowed on international capital markets on a scale that far exceeded the nation's economic output. When the bubble burst, the government stepped in to rescue the banks, but their debts were ultimately bigger than the state's capacity to raise revenue. Ireland started sliding towards insolvency. Hence, the bailout.

Not all of the boom was bogus. The initial expansion was driven by growth in exports. A young, well-educated, cheap labour force attracted investment. So did an aggressively competitive 12.5% corporate tax rate. Ireland positioned itself as a lean, buccaneering start-up economy, challenging Europe's unwieldy giants. Membership of the single currency gave seamless access to export and capital markets.

But there was a shift at the start of the 21st century. As success fed into higher disposable incomes and demand for houses, the returns on property investment soared. The government, in turn, became dependent on tax revenues – and in some cases bribes – from the building trade. Politicians kept consumer demand buoyant with generous public spending, while rewarding developer friends with public works contracts. Ireland's narrow elite ran the economy like a casino and awarded itself free chips. No one, save a few lonely economists, had much incentive to call time on the party. By 2007, around one in five Irish jobs depended in some way on the property market.

Unique to Ireland is that the incompetent politicians not only sank the ship, but also managed to sink the lifeboats afterwards - an aspect the Irish public refused to see as it descended into a mixture between Celtic melancholy and an 'ourselves alone' siege mentality. The masochistic willingness of the Irishman to endure any hardship has been painfully exploited by the Irish politicians, who first stripped the Irishman of everything he had, including his children's future, before simply facing the inevitable.

Ireland's unique misfortune is to have, in Brian Cowen's Fianna Fáil government, leaders who shipwrecked the economy and then capsized the lifeboats. The initial crisis response in 2008 was designed in such a way as effectively to absorb the doomed banking sector into the state, with no safeguards for taxpayers. While fitting as a kind of poetic commentary on what had happened in the boom years, as policy it was insane. Every cent of tax revenue disappeared down a black hole of debt; a ballooning budget deficit demanded brutal austerity measures – public sector cuts, tax rises – which drained any remaining cash out of the economy and prolonged recession.

Ireland is not bankrupt yet. The Treasury is forecast to run out of cash some time next spring. Finance minister Brian Lenihan had hoped to bring the deficit under control and appease nervous investors before then. But the country's eurozone partners are not waiting to see if domestic remedies work. They are forcing Ireland to take medicine prescribed by the European Central Bank and the International Monetary Fund. The exact shape of the package is not yet known, but it is likely to include tens of billions of euros in bailout money in exchange for more tax rises and spending cuts.

Other countries have seen booms burst, property bubbles implode, financial collapse. From Japan end 1980s to the LAtin American ans South East Asian collapses a decade ago. Non had an Euro. The Euro angle is vastly overdone by triumphant British nationalists.

Eurosceptics in Britain have been quick to weave a tale of Irish sovereignty surrendered to Brussels bureaucrats. Thus is the folly of the single currency proved, they argue.But on the question of sovereignty, the European angle is overplayed. It is debt that has deprived Dublin of budget autonomy. Countries that suffered financial crises ended up taking money and policy dictation from the IMF long before the euro was born. At least today, Ireland retains its political rights in EU institutions. Arguably, the fact that this is a pan-European rescue gives Dublin more clout than it would have in a lonely one-on-one fight with the bond market.

Besides, without access to ECB emergency finance, Irish banks would have collapsed last year, possibly taking the Irish state down with them. The ensuing panic would have infected the UK, regardless of its euro-aloofness.
The threat to Ireland now does not come from visiting European officials.
http://www.guardian.co.uk/commentisf...onomy-imf-euro

[gaelic cowboy]

Here is a PDF of the actual government plan to reduce government spending and so aid recovery

It all pretty standard and what I generally expected to happen.

[Louis VI the Fat]

Why are the Irish made to suffer for the greed of bankers, foreign investors, and the cronyism of their politicians? It feels like a return to 1848. Everybody somehow makes a profit out of the Emerald Isle, including the local overlords, yet, the Irish themselves are hurting, are told there will be no limit to their plight, but that it is somehow for the best if they just sit quiet and endure it.


Are the bailouts wrong? Should we (have bitten) bite the bullet? Market confidence is not restored, speculators are rewarded, and the bill is for the Irish and European taxpayer:

Most people know Swift as the author of “Gulliver’s Travels.” But recent events have me thinking of his 1729 essay “A Modest Proposal,” in which he observed the dire poverty of the Irish, and offered a solution: sell the children as food. “I grant this food will be somewhat dear,” he admitted, but this would make it “very proper for landlords, who, as they have already devoured most of the parents, seem to have the best title to the children.”

O.K., these days it’s not the landlords, it’s the bankers — and they’re just impoverishing the populace, not eating it. But only a satirist — and one with a very savage pen — could do justice to what’s happening to Ireland now.

Paul Krugman: http://www.nytimes.com/2010/11/26/op...ef=global-home

[gaelic cowboy]

The problem my dear fellow is the banks have pulled a fast one and the politicians have fell for it by falling for a theory quite simmilar to the Domino Theory except for debt.

Our politicians were too stupid to see our bankers codded them and sank the country into the IMF but the EU must take blame for letting this get to the point were Portugal/Spain are next.

We should all of us have burned both Senior bonholders and the Subodinated debt as bad investments just like if you and me opened a coffee shop Louis and ending up paying back them back say 20 cent in the euro for a liquidation firesale.

If we were not trying to extract value from these loans and trying to pay back all bonds like the ECB wants us too we would still have a bit of austerity on Ireland but were 2/3 yrs into it now we would probably be comng out now fact.

These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Or to be more accurate, they’re bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.

But there is no alternative, say the serious people: all of this is necessary to restore confidence.

As long as the ECB acts like it can ignore this reality and only looks to run the NICE bits of central banking and not the bad this will continue.

Your cry should be save the EU bin the bonds and we will see about the Euro later.

[Vladimir]

Why are the Irish made to suffer for the greed of bankers, foreign investors, and the cronyism of their politicians? It feels like a return to 1848. Everybody somehow makes a profit out of the Emerald Isle, including the local overlords, yet, the Irish themselves are hurting, are told there will be no limit to their plight, but that it is somehow for the best if they just sit quiet and endure it.


Are the bailouts wrong? Should we (have bitten) bite the bullet? Market confidence is not restored, speculators are rewarded, and the bill is for the Irish and European taxpayer:

Paul Krugman: http://www.nytimes.com/2010/11/26/op...ef=global-home

I believe the Irish are made to suffer because of greedy Irishmen! You can't keep passing it of to a segment of the population you don't like. Europe has tried to pass off their own greed to "Jewish" bankers for hundreds of years.

This isn't much different in America. The American people are suffering from greedy bankers, politicians, executives, service sector employees...who thought the gravy train of low interest rates would last forever. While some of them are fools the rest knew what "adjustable rate" meant when they secured the loan.