[Anthony16]

Originally Posted by dvpower

I presume you mean if we reject the treaty, which is a different thing from rejecting austerity measures.

Our 9 year bond is currently at 7.38%, so that's an indication of the kind of rate we would be looking at. I'd expect this to widen after a No vote, since we would be turning down the backstop that ESM access gives us.

No,i mean rejecting austerity as the greeks look like they will?

Who will lend to us and what interest rates?
Id imagine it would be significantly higher than the ESM interest rate if we required a second bailout.

[dvpower]

Originally Posted by Anthony16

No,i mean rejecting austerity as the greeks look like they will?

Who will lend to us and what interest rates?
Id imagine it would be significantly higher than the ESM interest rate if we required a second bailout.

No bailout fund would lend to us if we reject austerity i.e we want the money, but were not going to sign up to the conditions.

In this circumstance, the bond markets would be looking for extortionate rates if they would lend at all. The Greek 10Yr rate is at over 30%.

[SocSocPol]

Just vote NO!

[Anthony16]

Thanks.
May i ask ,can/could we function as a country/balance our books if we were to let the whole thing collapse?
Reject all the threats from Europe and go out on our own.
Im guessing the pay(and pensions) of all public servants would be halved,along with social welfare dependants and pensioners.
Big increase in taxes also.
Could we balance the books with these severe spending cuts?
Cheers

Originally Posted by dvpower

No bailout fund would lend to us if we reject austerity i.e we want the money, but were not going to sign up to the conditions.

In this circumstance, the bond markets would be looking for extortionate rates if they would lend at all. The Greek 10Yr rate is at over 30%.

[dvpower]

Originally Posted by Anthony16

Thanks.
May i ask ,can/could we function as a country/balance our books if we were to let the whole thing collapse?
Reject all the threats from Europe and go out on our own.
Im guessing the pay(and pensions) of all public servants would be halved,along with social welfare dependants and pensioners.
Big increase in taxes also.
Could we balance the books with these severe spending cuts?
Cheers

What do you mean by 'let the whole thing collapse'? Leave the Euro? Default on our debts? Balance our books overnight and continue to stay in the Euro and repay our debts?

I can't see any of these options leaving us in a better place than we are now.
The economy is very fragile - why would be want to subject it to more unnecessary shocks.

[onemorechance]

Enda's refusal to debate the Fiscal treaty is a sign that he knows he would lose the debate and thus cause a swing to the No vote.

It's sad, so sad
It's a sad, sad situation
And it's getting more and more absurd
It's sad, so sad
Why can't we talk it over

[Anthony16]

Yes,leaving the euro.
Some people seem to think we would be better off doing this.

Originally Posted by dvpower

What do you mean by 'let the whole thing collapse'? Leave the Euro? Default on our debts? Balance our books overnight and continue to stay in the Euro and repay our debts?

I can't see any of these options leaving us in a better place than we are now.
The economy is very fragile - why would be want to subject it to more unnecessary shocks.

[onemorechance]

Two-and-a-quarter billion tomorrow. Almost eight million on Wednesday, 50 million next Saturday, 57 million the following Monday

Sunday Indo

Enda should stand up for the people of Ireland in Europe. I don't see how a leader could be any more suppliant than Enda et al have been in Europe.



Even a 10% haircut on the bonds been paid over the next 7 days would yield e261 500 000! In just one week!

[dvpower]

Originally Posted by Anthony16

Yes,leaving the euro.
Some people seem to think we would be better off doing this.

If we left the Euro, our new currency would devalue leaving us, and companies that operate here, with a whole pile of euro debt that we / they could no longer afford to service.

The Economist have a piece this week looking at a possible break up of the Euro and outline some of the likely consequences. They come out in favour of saving it.

[dolanbaker]

Originally Posted by dvpower

If we left the Euro, our new currency would devalue leaving us, and companies that operate here, with a whole pile of euro debt that we / they could no longer afford to service.

The Economist have a piece this week looking at a possible break up of the Euro and outline some of the likely consequences. They come out in favour of saving it.

Just remember who would actually benefit from us all digging deeper into our pockets to bailout the system.

Outside of banking (& construction), the Irish economy is actually doing OK, so any devaluation will be quite modest. Germany has most to fear as their "Euro" would appreciate significantly without the PIIGS anchoring it down to its current value.

[Scofflaw]

Originally Posted by Noreen1

All fair points.
However, surely you agree that this situation needs to be addressed?

Absolutely.

Originally Posted by Noreen1

At the moment, the markets are dictating Government policy, whilst ignoring, or overcompensating for their own errors in the past.
Meanwhile, appeasing the markets has become the mantra for Government policy, while Governments also ignore the mistakes made by markets in the past.
Then there is the other elephant in the room - light touch regulation, by so many Governments - all at the same time!!
(Or, more pandering to a different group of moneylenders, if you like!)

How was it even possible for that to happen?

Simple enough, unfortunately. The banks are the creators of money, just as the markets are the distributors of it. More money looking for somewhere to go means more investment means more growth. It's extremely tempting as long as one forgets that cancer is also growth - that not all growth is either sustainable or desirable.

Originally Posted by Noreen1

We essentially have a situation where an entire Continent is teetering on the brink of collapse, and the best thing our Governments can come up with, after four years, is more austerity, in perpetuity - whilst doing nothing to address the control held by either the bondholders, or the Banks.

It's no more "austerity in perpetuity" than it was a boom in perpetuity, although the one is a mirror of the other.

Originally Posted by Noreen1

Keynesian economics has failed the citizens of the EU, helped along by inept Governments.
Therefore, should we not seek to find a better economic model, whether that is adapting Keynesian economics, or introducing a different school of economics, that doesn't rely on perpetual growth, which we all know, cannot happen constantly, and certainly not when austerity measures continue to reduce the spending power of the consumer.

Such an adjustment would be difficult - yet, it is necessary.
Nevertheless, all we ever seem to hear is an analysis on how to attempt, unsuccessfully, for the most part, to appease the markets.

That wasn't Keynesian economics! Keynesianism is anti-cyclic, that was pro-cyclic - spend it while you've got it and tomorrow be damned.

cordially,
Scofflaw

[stonetrower]

Sunday 27/05/2012 Merkel drops 6% in latest German poll and that was in just the past seven days www.ireland.com/breaking-news

[jacquesbernis]

Shane Ross..waits til the polls are in then goes with the likely losing side.
The man wouldn't know what to do if he got into power and had to make a decision with consequences.
Economist trying to make theory out of reality..always safer than the alternative..ask Jim Power

[highcream]

Do people not agree that an irish default is an inevitability anyway?
We are never going to be able to pay back those loans?
How can an economy grow if its hindered by cuts in all directions.
do u think The fear of a 50% cut in public spending is what is holding us back from default?
We all know the government are great buddies with the likes of jack o connor

[squod]

Originally Posted by highcream

Do people not agree that an irish default is an inevitability anyway?

It's not inevitable. Noonan is dead against the idea and will leave any decision making up to the boss in Brussels. Best that will happen is a write down of some debts.