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Stephen Donnelly, on how the ECB actually owes Ireland €64 billion!

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    #122
    jmayo
    Registered Users Posts: 13,092 ✭✭✭✭jmayo


    preddy wrote: »
    What was our over expenditure leading up to this "20 odd Billion" deficit ?

    Ehhh how about hugely increased public sector spending that jumped massively between late 90s and 2007 ?
    All those extra public servants, all the benchmarking awards, all the extra quangoes did add up you know.

    Or perhaps it might have something to do with the taxation cuts that were brought in from the mid 90s ?
    Then again there is our very lavish social welfare system ?

    Now if you don't get the fact that if we take in say 30 odd billion in taxes/revenues, but spend on day to day expenses 50 odd billion is bad in itself, then I am out of this discussion.
    preddy wrote: »
    You can't say the banking crisis has had nothing to do with our revenue situation at all.

    The banking situation has a lot to with our current and more importantly future revenue situation.
    The banking crisis has meant we had to take a bailout.
    Some would say we would still have had to take a baiklout sooner or later if we did not address the current budget deficit.
    We were borrowing 20 billion a year FFS.

    The banking crisis has meant that there is no proper functioning banking system to lend into businesses that could help us out of the current situation.
    It means that our capital reserves in the NTMA were eaten away and the rainy day fund is not there to invest in such things as infrastructure projects to help us out of our recesssion.

    But, and I am tired saying this, we would still be facing harsh cuts without a penny ever going into banks or on bondholder bailouts.
    Some people refuse to acknowledge this and it really pis*es me off.
    Duggys Housemate wrote: »
    Apologists for the bailout mention the deficit all the time.

    If you care to check the number of times I have been infracted over on Politics for my opinion on bankers, regulators and politicans you would find I am no apologist for bank guarantee, NAMAs or bailouts of any kind. :mad:

    Only two banks (AIB & BOI, maybe PTSB) should have been saved and that would have saved us anything in the order of 60 odd billion that has been wasted in the INBS and Anglo cesspits through either recapitlisation or investment through NAMA.
    Duggys Housemate wrote: »
    What causes alarm for lenders is a high deficit, not under control, and a debt ratio which is higher than 100%. Both. The deficit is coming down, were the bank bailout removed from the debt-GDP ratio we would have a lower debt than the UK, and a decelerating deficit. The UK can borrow, we cannot. the UK deficit is accelerating.

    True the bank bailout did push us into a troika bailiout.
    BTW the UK or the US are always a better bet to come out of recession so will always find it easier to attract money than us.

    As someone said at time of the guarantee the government (with it's inept regulators, dept of finance), signed an open ended cheque for the banks, not knowing fully how bad the situation was, all in hope they could bluff the markets into thinking everything was hunky dory and eventually the tap of cheap credit bubble would be turned back on to enable the resultant property bubble to carry on.
    Duggys Housemate wrote: »
    Regulation in a currency union should stay at the top. Were the Fed to cause a boom in California by keeping interest too low - but perfect for the East Coast - most people would not blame the California Central Bank, in fact there would be little they could do with the tsunami of money flowing from the East looking for better returns.

    I think you have hit on the big issue with the Eurozone.
    The original and even the current system does not allow enough flexibility to cater for all the diverse countries within it's sphere of influence.


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    #123
    Ghandee
    Closed Accounts Posts: 6,653 ✭✭✭Ghandee


    Just a quick update on this.

    Stephen met with the troika yesterday.

    Something that stood out from his meeting was this bit:
    We also discussed the issues of bondholder payment. it was pointed out that it was the previous government and not the Troika that insisted on payments to unseen unguaranteed bondholders of the pillar banks.

    Why do FG insist they have no choice in the matter though?

    Some interesting points made, especially the claim that 'plan A may not be working' (no shiit Sherlock)
    So I met the Troika yesterday. And it was a very interesting meeting. From their point of view the Government’s programme, which is predicated on economic growth, may need tweaking to reflect changing economic conditions. In short, they’re not sure Plan A is working and they are open to a plan B.

    I was delighted to hear they were aware of the difficulties that the current approach to fiscal consolidation is causing. They felt that the growth projections for the country are broadly right but this year’s growth would be lower than expected. In response, I’ve called on the government to finally come up with policies that put citizens ahead of bankers’ balance sheets and conclusively address the household debt problem.

    Troika representatives were conscious that cost of living in Ireland was too high, stressed the need for internal devaluation, and stated that the implementation of solutions to the mortgage crisis has been too slow in coming.

    http://www.stephendonnelly.ie/featured/so-i-met-the-troika-yesterday/


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