Governments deficit plan

feicim

What was the governments original 5 year plan to reduce the deficit?

I know that it was supposed to bring our budget deficit to within a couple of per cent of gdp by 2013 (then extended to 2014).

The plan started in 2008 when deficit was 12.7 billion or so (although this is being revised upwards to include an extra 4 billion that was given to anglo), then in 2009 deficit was 24.6 billion, this year its expected to be about 36 billion.

They took about 4 billion out last year, and this year they are taking 3 out. That makes a saving of about 7 billion.

This represents less than one tenth of the money they have had to borrow over the last 3 years.

Their five year "plan" is a complete sham, its not a plan at all its a fig leaf.

Seriously, how will it all end?

gurramok

It was agreed with the EU and some say pushed by the EU to reduce it by 3bn a year till 2014. Thats what the Irish people do not realise that this pain has another 5yrs to go and will go on further than 5 yrs if proper real spending cuts are not achieved.

And thats not even contemplating a Greek type scenario where we would be rescued by the ECB/EU/IMF in case of default, that means harsher pain. So yeh, more doom and gloom, just wish the average Irish voter who according to opinion polls would rather vote for non-spending cuts parties like Labour...would just wake up.

Count Dooku

feicim wrote: »

Seriously, how will it all end?

IMF and expelling Ireland from Euro

Nody

Count Dooku wrote: »

IMF and expelling Ireland from Euro

Even if that second part would go ahead (far more unlikely then the first one) it will still only be done far to late and throw away far to much money before that trying to stop it.

Nijmegen

The gap is indeed massive, though one should look at the figures of current/capital spending and ignore the banks, NAMA, etc, as "once off" spendings. We'll have to repay that debt, and the interest on it, but the interesting area is the daily spending, as that is where the cuts will need to come from.

As time goes on our debt interest will go up - this year it will be 16% of all tax paid just to service interest, roughly all the corporate tax we take in - and we really do need make continious cuts until we balance the budget.

It's a race: Cut too much, you screw the economy. Cut too little too late, you end up paying out most of your taxes to cover interest alone.

It's plain as the nose on your face that we need to keep cutting over the next ten years. We'll need to cut to balance the budget and then we'll need money to pay down the debt.

OMD

The plan is/was to reduce deficit to under 3% of GDP by 2014. Obviously cutting spending by 3 billion a year is a major part of this but what they are really banking on is GDP increasing and thus the debt will be a lower proportion of this increased figure.

Most people agree their plan is pretty ambitious.

jmayo

Looking at the thread title the first thing that came into my head was Baldric and one of his cunning plans.

feicim

I wonder was this a part of their plan?

http://www.independent.ie/national-news/government-perilously-close-to-calling-in-imf-report-warns-2341197.html

Idbatterim

the goverment would want to come up with ways of generating additional revenue. The cut cut cut route while necessary creates its own problems. Why not drop all taxes and charges for flights (for a trial period of say 6 months) that originate outside of Ireland. (Promote this and Ireland abroad, partner up with hotels and car rental companies to offer discounted prices.)Also the spirit of Ireland proposal, on paper atleast looks fantastic...

the_dark_side

I asked this question on another thread and I haven't had a reply yet, the question is this... how safe are people's savings? Can there be expropriation if the IMF do come in?

Japer

feicim wrote: »

What was the governments original 5 year plan to reduce the deficit?

I know that it was supposed to bring our budget deficit to within a couple of per cent of gdp by 2013 (then extended to 2014).

The plan started in 2008 when deficit was 12.7 billion or so (although this is being revised upwards to include an extra 4 billion that was given to anglo), then in 2009 deficit was 24.6 billion, this year its expected to be about 36 billion.

They took about 4 billion out last year, and this year they are taking 3 out. That makes a saving of about 7 billion.

This represents less than one tenth of the money they have had to borrow over the last 3 years.

Their five year "plan" is a complete sham, its not a plan at all its a fig leaf.

Seriously, how will it all end?

Cowen waking up with a big big hangover, not being able to borrow the money to pay everyone who gets the government cheque ( well, lets face it, they done so well up to now ) and then crawling to London - with a note of apology - to beg them to take the country back ?

Idbatterim

people say why arent we on the streets rioting, could you imagine expropriation took place?!

OMD

Idbatterim wrote: »

the goverment would want to come up with ways of generating additional revenue. The cut cut cut route while necessary creates its own problems. Why not drop all taxes and charges for flights (for a trial period of say 6 months) that originate outside of Ireland. (Promote this and Ireland abroad, partner up with hotels and car rental companies to offer discounted prices.)Also the spirit of Ireland proposal, on paper atleast looks fantastic...

How much would it cost and how much would it generate? In 6 months about 10 million people travel through Dublin Airport alone. Say 5 million each way. So you are going to loose the tax on those 5 million who were coming anyway. How many new passengers do you need to break?

Idbatterim

if you get more people flying, more profits are made, more people employed, more corporation tax paid. Flight would have to be booked as return to get this offer. People living here would still pay the tax. Ofcourse you will lose out on the people that would have come here anyway. If its not tried out, we wont know.

Stinicker

the_dark_side wrote: »

I asked this question on another thread and I haven't had a reply yet, the question is this... how safe are people's savings? Can there be expropriation if the IMF do come in?

As it stands; Savings in the banks are guaranteed by the Government upto €100,000, this banking guarantee was introduced in September 30th 2008 for one year, it was extended last September for another year and was supposed to run out at the end of this month, however on September 7th 2010 it was extended until 31/12/2010.

Ireland's banks are broke and insolvent and if that guarantee was not introduced back in 2008, Anglo Irish Bank would have had to declare bankruptcy the following day, and depositors in Anglo Irish Bank would have lost their deposits and some of the developers may actually have been pursued for what they owed; within in day the contagion of the crisis would have brought down AIB, BOI and Irish Nationwide, once one Domino goes the chain reaction would destroy the Irish financial landscape.

So we now have the situation where our life savings are in the hands of Government.

Our Government we must remember are running a massive deficit and costs of borrowing are skyrocketing, we are facing a Sovereign Debt Crisis, and the Irish State is now in a position where it is almost guaranteed to to default on payment and bankrupt the state.

A bankrupt Government cannot guarantee nothing and the Guarantee is essentially worthless; meaning a run on the banks is totally inevitable at this stage. Our country is about to enter into a massive period of economic and social upheaval as a result of this.

IMF intervention is coming very very close because our Government can no longer borrow on the bond markets due to the high costs associated thuswith. The IMF will be the lender of last resort for the Government and they are like an International Loan Shark who will break your two legs if you'd don't repay, although not literally. Massive spending cutbacks will be made and no. 1 priority will be given to reducing the deficit and repaying debt. Everything will be cutback adding to further social upheaval.

Expropriation of peoples savings will also likely happen, and people will awake one morning to discover that 100K nestegg they had in the bank is now a 100K Irish Government Bond (an IOU from a bankrupt government). Withdrawal limits will also be imposed and there is a strong likelihood that peoples savings will be wiped out or else it will be a long time before they are returned after the expropriation.

After the collapse of the Soviet Union in 1989 many former CIS states expropriated their citizens savings and they were not returned until 15 years later with no interest and inflation in the meantime had reduced their spending power "true value" to about 10% of their actual value at the time of expropriation in 1989/90.

This sounds all doom and gloom, however they are the facts and what I have written above is not a case of "if it happens" it is only a matter of time and everyday a person has their money in any Irish financial institution the riskier it is getting that they will lose it all.

There has been massive haemorrhaging of deposits out of Irish banks in the last month as people who know what is happening are scrambling to save their own bacon. The rivers of capital pouring out of the nations banks has gone unreported in the media, mainly because the media in under strict orders not to report on it, as this would damage confidence even more and see a run on the banks started sooner (although it is inevitable that there will be a run); people clued into financial affairs are getting their money out now whilst the average ordinary Joe punter hasn't a clue (Media blackout contributing to it) and is oblivious to the Financial Armageddon approaching the country.

The simplest way to avoid personal ruination during this crisis is to withdraw all funds immediately from your Irish bank in cash. Make sure you get German Euro Notes; these are easily identifiable as the first letter of the serial number beginning with X. The Note in that link begins with S and is an Italian Euro note. Irish Euro notes are denominated in "T" and do not accept these from the bank. Demand X German denominated notes as these have maximum value in the event of the Euro itself breaking up or going into meltdown.

Remember that storing Cash is the most dangerous method of storage and considerations should only be given to this option if you think you can secure it yourself. A safe and burglar alarms would be needed and CCTV, multiple hiding places "don't put all your eggs in one basket" is a good idea also. A shotgun can be got without too much hassle also and is a good investment if you plan to horde cash.

The best and safest method is to move your funds offshore, there are multiple banking havens around the world ranging from the Cayman Islands, The Bahamas, Switzerland and Singapore. Switzerland is a good choice as you can open an account by correspondence with the likes of UBS or Credit Suiss, and it offers good privacy and security. Interest rates will be low in Switzerland however a small price to pay for financial security.

Singapore is probably the best bet as they have the tightest security and privacy and there is practically no tax. However the drawback to Singapore is to open an account there you must do it in branch, which means a 13 hours flight to the straits at a cost of about €800 rtn, it will cost you roughly a grand to do it, but to the person with a lot of money what is €1 out of €250 to stop the Government taking it all.

Move your money out the country and you will be fine, leave it here and you only have yourself to blame when you wake up to discover your life savings wiped out.

We are governed by a corrupt Government and we are sailing in a force five economic storm with no compass or GPS and our Captain is drunk at the wheel. Forgive me if I don't have the confidence in our Government to keep my money in Ireland any longer.

blast06

Why not just put your money into say National Irish Bank which is guaranteed by the Danish state cos it is owned by Danske Bank ?
plus the NTMA already has enough hard cash to keep the country running for another 6 months so definitely no expropriation before then imho so take the reasonably high rates from the likes of Irish Nationwide until Xmas and then move your money.

Maybe theres a few things i am missing in the above points that would make it bad advice ??????

Scarab80

feicim wrote: »

What was the governments original 5 year plan to reduce the deficit?

I know that it was supposed to bring our budget deficit to within a couple of per cent of gdp by 2013 (then extended to 2014).

The plan started in 2008 when deficit was 12.7 billion or so (although this is being revised upwards to include an extra 4 billion that was given to anglo), then in 2009 deficit was 24.6 billion, this year its expected to be about 36 billion.

They took about 4 billion out last year, and this year they are taking 3 out. That makes a saving of about 7 billion.

This represents less than one tenth of the money they have had to borrow over the last 3 years.

Their five year "plan" is a complete sham, its not a plan at all its a fig leaf.

Seriously, how will it all end?

http://www.davy.ie/content/pubarticles/econcr20100917.pdf

Stinicker

blast06 wrote: »

Why not just put your money into say National Irish Bank which is guaranteed by the Danish state cos it is owned by Danske Bank ?

Ownership will be irrelevant when expropriation occurs, because the money is on deposit in Ireland; your 100K savings in NIB would still be transformed into 100K of junk bonds funny money.

The Danish state would let the Irish savers of Danske sitting high and dry and would not interfere because of the EU. The same thing happened in the UK where 400,000 savers of IceSave (a subsidary of Landsbanki - Iceland's version of the Anglo disaster).

The IceSave savers lost their deposits and got some money back from the FSA (British Guarantee system). The Government of Iceland was quickly ousted from office by the Icelandic people who were not going to allow mass robbery of their taxpayer to pay for the mistakes of a private bank. In a special referendum over 93% of Icelanders voted overwhelmingly against the paying back the landsbanki liabilities.

The Icelandic people have handled their crisis remarkably well, considering their tiny population. The political changes they made have contributed well to their survivability of the crisis. As for Ireland, I shudder the thought.

The safest place for savings is in a foreign owned bank offshore preferably outside the EU. You can have a Euro Denominated account in a Swiss or Singaporean bank, with online banking you can manage the funds easily and transfer money back to Ireland if you wanted to buy something. I wouldn't keep more in an Irish bank than I could afford to lose to be honest.

blast06

Ownership will be irrelevant when expropriation occurs, because the money is on deposit in Ireland; your 100K savings in NIB would still be transformed into 100K of junk bonds funny money.

The Danish state would let the Irish savers of Danske sitting high and dry and would not interfere because of the EU. The same thing happened in the UK where 400,000 savers of IceSave (a subsidary of Landsbanki - Iceland's version of the Anglo disaster).

I have to be honest .... i don't really get this.
We have the same currency as Denmark unlike Iceland/UK scenario and thus if a lot of people moved their cash assets to NIB, then is it not a case of the Danske bank group receiving a lot of liquidity relatively cheaply even further minimising any tiny potential troubles that they would have of becoming another Anglo. Why then would they need to treat Irish deposits as junk bond equivalent ?

Also, you might have missed my comment on a previous post ..... am i talking crap ?!
"plus the NTMA already has enough hard cash to keep the country running for another 6 months so definitely no expropriation before then imho so take the reasonably high rates from the likes of Irish Nationwide until Xmas and then move your money."

Scarab80

Stinicker wrote: »

Ownership will be irrelevant when expropriation occurs, because the money is on deposit in Ireland; your 100K savings in NIB would still be transformed into 100K of junk bonds funny money.

What exactly are you suggesting that the irish government would be expropriating in relation to NIB? The security in having your money in a foreign owned bank operating in Ireland is precisely because the irish loan book in which depositers money is stored is backed by the more secure foreign business of that bank. If the government divest Danske of their irish business you release the Danish government of any responsibility of losses arising on that loan book. It makes no sense.

Stinicker wrote: »

The Danish state would let the Irish savers of Danske sitting high and dry and would not interfere because of the EU. The same thing happened in the UK where 400,000 savers of IceSave (a subsidary of Landsbanki - Iceland's version of the Anglo disaster).

The IceSave savers lost their deposits and got some money back from the FSA (British Guarantee system). The Government of Iceland was quickly ousted from office by the Icelandic people who were not going to allow mass robbery of their taxpayer to pay for the mistakes of a private bank. In a special referendum over 93% of Icelanders voted overwhelmingly against the paying back the landsbanki liabilities.

You've got this backwards. Landsbanki left their depositers high and dry because they were bust, the Icelandic government failed to meet these liabilities and it was left to the UK government to repay the depositers, which they did - beyond the levels of the FSCS - and repayed all monies to UK depositers.

For a similar situation to occur with NIB, Danske Bank would have to go bust and the Danish government would have to default on it's obligations to their depositers under their own deposit scheme.

dynamick

The 2009-2014 stability program is on track with revenues within 1% of target according to the monthly exchequer reports. I expect the target to be met this year.

The davy report posted above predicts we will meet the 2.9% deficit condition by 2014. A far more pessimistic asssesment in last week's economist predicted we would have a deficit of 4.3% in 2015, which is not bad at all.

There is zero chance of the commission allowing Ireland to default while they are funding our deficit and our nama operation through ecb repo - so long as we continue to do what we're doing.

The opposition parties have agreed to follow the terms of the stability program so there is no risk to the market that the new government will reverse the current economic policies.

As an aside, Denmark uses the Danish Krone not the Euro.

Stinicker

Scarab80 wrote: »

What exactly are you suggesting that the irish government would be expropriating in relation to NIB? The security in having your money in a foreign owned bank operating in Ireland is precisely because the irish loan book in which depositers money is stored is backed by the more secure foreign business of that bank. If the government divest Danske of their irish business you release the Danish government of any responsibility of losses arising on that loan book. It makes no sense.



You've got this backwards. Landsbanki left their depositers high and dry because they were bust, the Icelandic government failed to meet these liabilities and it was left to the UK government to repay the depositers, which they did - beyond the levels of the FSCS - and repayed all monies to UK depositers.

For a similar situation to occur with NIB, Danske Bank would have to go bust and the Danish government would have to default on it's obligations to their depositers under their own deposit scheme.

Denmark isn't in the Euro however the Danish Krona is pegged to the Euro. I am pretty sure the Danish Banking Guarantee is only going to cover depositors in mainland Denmark. NIB is a subsidiary of Danske Bank and would not be covered by any Danish Guarantee similar to how Iceland refused to cover the British and Dutch savers who lost out.

blast06 wrote:

plus the NTMA already has enough hard cash to keep the country running for another 6 months so definitely no expropriation before then imho so take the reasonably high rates from the likes of Irish Nationwide until Xmas and then move your money.

Maybe theres a few things i am missing in the above points that would make it bad advice ??????

I don't really want to advise anyone because everyone must take financial responsibility themselves however to me this is how the situation will play out from my own point of view.

I have zero confidence in this Government to manage anything at this stage and "better safe than sorry" is the attitude I am adapting in response to what I perceive to be a huge threat from Government to my own personal finances. The bond market will dry up for Ireland and we are almost at the point where we can borrow no longer unless from the IMF. This will lead to National bankruptcy, a run on the banks, expropriation of savings and wide scale devaluing of wealth.

Scarab80

Stinicker wrote: »

Denmark isn't in the Euro however the Danish Krona is pegged to the Euro. I am pretty sure the Danish Banking Guarantee is only going to cover depositors in mainland Denmark. NIB is a subsidiary of Danske Bank and would not be covered by any Danish Guarantee similar to how Iceland refused to cover the British and Dutch savers who lost out.

Their deposit guarantee covers the depositers of Danish banking institutions, in the same way that our deposit guarantee covers the overseas depositers in our banks and in the same way that the Icelandic guarantee covered the overseas depositers in their banks.

The difference being that Iceland defaulted on it's guarantee to overseas depositers because the country was bankrupt, that is not the case with Denmark obviously.

Stinicker

Scarab80 wrote: »

Their deposit guarantee covers the depositers of Danish banking institutions, in the same way that our deposit guarantee covers the overseas depositers in our banks and in the same way that the Icelandic guarantee covered the overseas depositers in their banks.

The difference being that Iceland defaulted on it's guarantee to overseas depositers because the country was bankrupt, that is not the case with Denmark obviously.

Well the Danish are in a better position than the Icelandic for sure, and I do not know the exact liabilities of NIB, but I cannot see the Danish people having their Government hand over Billions to some Irish depositors in the event NIB is exposed, not all countries and people are as gullible as we were when we evaporated €30bn into Anglo Irish Bank. The last thing I would want for my own finances would for to be dependent on a Foreign Government to bail out my bank, that is a bank that is too risky for my liking; however each to their own.

dynamick wrote:

The 2009-2014 stability program is on track with revenues within 1% of target according to the monthly exchequer reports. I expect the target to be met this year.

The davy report posted above predicts we will meet the 2.9% deficit condition by 2014. A far more pessimistic asssesment in last week's economist predicted we would have a deficit of 4.3% in 2015, which is not bad at all.

There is zero chance of the commission allowing Ireland to default while they are funding our deficit and our nama operation through ecb repo - so long as we continue to do what we're doing.

The opposition parties have agreed to follow the terms of the stability program so there is no risk to the market that the new government will reverse the current economic policies.

As an aside, Denmark uses the Danish Krone not the Euro.

There is not a snowballs hope in Hell of us meeting the 2.9% deficit criteria by 2014, even the 4.3% is a way off. Those figures in that chart are totally flawed and if I may draw your attention to the GDP figures. I would love to know where all this supposed GDP growth is going to come from,

5.57% for 2011,
6.68% for 2012,
6.46% for 2013,
6.12% for 2014?

GDP for 2010 is down 4.4% from 2009 levels this year which would suggest a 9.97% upward swing for next year? Even China is not achieving that!

GDP will continue to contract as more people become unemployed and more cutbacks are made. Added to that anything upto 100,000 people will have emigrated and that leaves less workers to produce more. Increased taxation will hurt the economy more also.

Those figures are flawed and our economic situation is almost impossible, with Government expenditure continuing to grow and tax receipts in a state of atrophy, Irish bond figures at record levels and a Government who is doing nothing to instill confidence; and instead we have a bumbling farce for a Taoiseach at the helm. We are headed straight into financial disaster and there are no two ways about it. The sooner we get our heads out of the sand, stop living in denial and tackle the problem head on the better.

Idbatterim

5.57% for 2011,
6.68% for 2012,
6.46% for 2013,
6.12% for 2014?

those growth rates are fantasy jobs. Atleast 3 billion will be cut from expenditure this year, aswell as a host of other factors which are also critical. Now excuse me while I go commit suicide...

johnnyskeleton

Stinicker wrote: »

5.57% for 2011,
6.68% for 2012,
6.46% for 2013,
6.12% for 2014?

GDP for 2010 is down 4.4% from 2009 levels this year which would suggest a 9.97% upward swing for next year? Even China is not achieving that!

Those figures are nominal figures. Roughly half of the increases in GDP predicted by the government are not real increases in GDP, but due to inflation and satistical measures.

Predicting growth from MNCs may be part of it, but 3% growth from these sectors is a lot. Plus, this would not tally with the increased taxes predictions. In order to achieve a level of tax such as would close the gap, they need to pretty much have another construction bubble.

Also, I wonder are Davys including additional interest on each year's deficit?

SkepticOne

Stinicker wrote: »

Well the Danish are in a better position than the Icelandic for sure, and I do not know the exact liabilities of NIB, but I cannot see the Danish people having their Government hand over Billions to some Irish depositors in the event NIB is exposed, not all countries and people are as gullible as we were when we evaporated €30bn into Anglo Irish Bank. The last thing I would want for my own finances would for to be dependent on a Foreign Government to bail out my bank, that is a bank that is too risky for my liking; however each to their own.

But I thought the discussion was about what might happen in the event that Ireland is no longer able to guarantee Irish banks. Is anyone worried about the state of NIB or Denmark's ability to guarantee deposits in NIB yet?

Scarab80

johnnyskeleton wrote: »

Those figures are nominal figures. Roughly half of the increases in GDP predicted by the government are not real increases in GDP, but due to inflation and satistical measures.

Predicting growth from MNCs may be part of it, but 3% growth from these sectors is a lot. Plus, this would not tally with the increased taxes predictions. In order to achieve a level of tax such as would close the gap, they need to pretty much have another construction bubble.

Also, I wonder are Davys including additional interest on each year's deficit?

The figures are based on DOF figures, which is what i originally wanted to post but couldn't find them. Found them now....

http://www.budget.gov.ie/Budgets/2010/Documents/Final%20SPU.pdf

Goes into a decent amount of detail on how they arrived at the figures.

In relation to interest repayments...

It is estimated that the interest costs on the National Debt will amount to €4.4 billion in 2010, €5.7 billion in 2011 and €6.6 billion in 2012.

ei.sdraob

sigh


GDP = private consumption + gross investment + government spending + (exports − imports)


borrow alot of money from outside and your gdp goes up, the country is not any richer in the long run... just as you would not be any "richer" just because you have a mortgage with a bank

baalthor

SkepticOne wrote: »

But I thought the discussion was about what might happen in the event that Ireland is no longer able to guarantee Irish banks. Is anyone worried about the state of NIB or Denmark's ability to guarantee deposits in NIB yet?

Surely the Danish Govt. guarantee only applies if Danske Bank (the whole group, not NIB) collapses or is unable to meet its commitments ?

If the Irish government did what stinicker suggested I don't think the Danish govt. or financial authorities would be under any obligation to Irish depositors.

With regard to the serial numbers on the euro notes, Ireland only produces 5 euro notes (along with several other countries) so unless you withdraw your money in fivers it's not really an issue.

Brussels Sprout

baalthor wrote: »

With regard to the serial numbers on the euro notes, Ireland only produces 5 euro notes (along with several other countries) so unless you withdraw your money in fivers it's not really an issue.

Ireland produces fives, tens and twenties (but not fifties as far as I know).

I can't imagine people not accepting T-reg euros in the future. I mean that's completely unworkable since they are all over the euro zone right now. If you look through your wallet you'll likely find notes that were originally registered in many different countries. Just because something was registered as an Irish euro note doesn't make it some sort of Irish sub-section of the euro. At the end of the day it's still the same currency. There's no way that the irish euro notes can be ring-fenced within Ireland and then devalued or whatever it is that Stinicker is suggesting.

SkepticOne

baalthor wrote: »

Surely the Danish Govt. guarantee only applies if Danske Bank (the whole group, not NIB) collapses or is unable to meet its commitments ?

As far as I can tell, what stinicker is suggesting is that once the Irish government is bankrupt then the Irish guarantee of Irish banks is fairly meaningless. I would agree with this. However none of that will affect subsidiaries or branches of foreign banks operating in Ireland since those banks don't depend on the Irish guarantee in the first place. NIB was never covered by the Irish guarantee.

If the Irish government did what stinicker suggested I don't think the Danish govt. or financial authorities would be under any obligation to Irish depositors.

stinicker also mentions expropriation but it is not clear whether that means outright taking of money from banks or whether it is effective expropriation due to the collapse of the Irish guarantee. In either case it is hard to see how this would work with subsidiaries or branches of a foreign bank. If it is outright expropriation then I'm not sure the constitution allows that.

dynamick

Stinicker wrote: »

There is not a snowballs hope in Hell of us meeting the 2.9% deficit criteria by 2014, even the 4.3% is a way off. Those figures in that chart are totally flawed and if I may draw your attention to the GDP figures. I would love to know where all this supposed GDP growth is going to come from,

5.57% for 2011,
6.68% for 2012,
6.46% for 2013,
6.12% for 2014?

GDP for 2010 is down 4.4% from 2009 levels this year which would suggest a 9.97% upward swing for next year? Even China is not achieving that!

The correct figures for required GDP growth at constant market prices are as follows:
2009 -7.5
2010 -1.3
2011 3.3
2012 4.5
2013 4.3
2014 4.0

GDP grew 2.7% in Ireland in Q1 2010 (the highest in the eurozone)
New GDP data for Q2 will be released at the end of the month but right now we are ahead of target on growth.
http://www.cso.ie/releasespublications/documents/economy/current/qna.pdf

ei.sdraob wrote: »

sigh


GDP = private consumption + gross investment + government spending + (exports − imports)


borrow alot of money from outside and your gdp goes up, the country is not any richer in the long run... just as you would not be any "richer" just because you have a mortgage with a bank

double sigh!
The point of the stability program is to reduce our deficit. GDP growth can't be attributed to borrowing when borrowing is falling!

ei.sdraob

dynamick wrote: »

double sigh!
The point of the stability program is to reduce our deficit. GDP growth can't be attributed to borrowing when borrowing is falling!

In case you haven't noticed deficit grew by quite a bit this year since EU is not buying us keeping banking debts separate. But let me guess your ignoring that. Well the markets are not

And yes borrowing does increase our gdp.incidenaly we borrowed **** load this year. With rumors of the pensions piggy bank being broken soon

dynamick

ei.sdraob wrote: »

In case you haven't noticed deficit grew by quite a bit this year

What I noticed is that our exchequer deficit is down a third from 18 billion to 12 billion YTD at the end of August.

ei.sdraob wrote: »

since EU is not buying us keeping banking debts separate. But let me guess your ignoring that. Well the markets are not

The bank bailout costs are non-recurring exceptional items that do not significantly affect our progress towards meeting our stability plan target of 3% by 2014. (the increased interest costs required to fund the bailout do have to be counted but that's relatively small)

ei.sdraob wrote: »

And yes borrowing does increase our gdp.incidenaly we borrowed **** load this year. With rumors of the pensions piggy bank being broken soon

Increased borrowing increases our GDP but our borrowing is falling so our GDP is growing despite our borrowing not due to it. Look at the details of the Q1 2010 national accounts when our economy grew by 2.7% *IN * ONE * QUARTER*!

Have a look at Table 5 to see the makeup of that 2.7% growth: that growth disn't come from borrowing fueled government expenditure (which has been falling for the past 4 quarters) - no it's a rise in export values of 9% in one quarter. With the two major components of corporate costs slashed (wage and property costs) the economy is on economic viagra and I expect to be further titillated by the next set of quarterly accounts in 10 days time.

As for the pension fund, I'm afraid the NPRF is spoken for now by the anglo bailout costs. That's gone - lucky we had it. The lesson for the future is to pay attention to over aggressive balance sheet growth in our banks because western countries provide an unspoken guarantee for the liabilities of their largest banks.