The IMF

heybaby

On the back of todays announcement regarding the blackhole that is Anglo, I'm Looking to see what people think about the IMF's entry into Ireland, Personally i think this is increasingly likely within the next 6 months, what do you think in terms of a time frame and what are the fiscal ramifications for Ireland if they do come into the equation?

Économiste Monétaire

Moved from Economics.

jprender

I would presume that we will have to sell-out to the EU before the IMF get involved.

ei.sdraob

if( ($rate > 5%) && ( $no_money_left_in_NTMA_warchest ) ){

   goto ECB+IMF; // :eek:
}
else{
   
  die('default'); // :P
}

jprender

^ Funniest thing I've seen in ages.

feicim

^ Computer geeks:eek:

RATM

Here's their phone number + 1 (202) 623-7000, would someone go and ring them and tell them to hurry the fcuk up because they can't possibly do a worse job with the economy than the present bunch of incompetents.

Time Magazine

ei.sdraob wrote: »

if( ($rate > 5%) && ( $no_money_left_in_NTMA_warchest ) ){

   goto ECB+IMF; // :eek:
}
else{
   
  die('default'); // :P
}

One of the great difficulties of economics is that people are adaptive. It's a system that endogenises itself when you don't expect it to. For example, if rates were greater than 5% and NTMA was depleted, and we faced a serious threat of default, expect the national solidarity variable to shoot forward and suddenly the populace accepts higher taxes.

ei.sdraob

Time Magazine wrote: »

One of the great difficulties of economics is that people are adaptive. It's a system that endogenises itself when you don't expect it to. For example, if rates were greater than 5% and NTMA was depleted, and we faced a serious threat of default, expect the national solidarity variable to shoot forward and suddenly the populace accepts higher taxes.

True alot could happen in next 6 months, the above was just my way of saying

"stuck between a rock and a hard place"

and reminding people that we have a cushion in the NTMA to get us over a few months

theres also the PRIDE variable, how much will we be willing to accept in order to keep EU+IMF away? some people outside already commenting that it was foolish not to tap into the rescue fund at 5%

dan_d

I don't mean to be rude OP, but there are an extremely large number of threads on this very subject scattered around the politics and the Irish economy forums.

You should get a good idea of what people think from those.

heybaby

dan_d wrote: »

I don't mean to be rude OP, but there are an extremely large number of threads on this very subject scattered around the politics and the Irish economy forums.

You should get a good idea of what people think from those.

Indeed , however thats why i framed my question in light of 'today's 'announcement regarding the 33% increase in funds to anglo, this situation is a fluid one, the situation this week is more grave than last week, i wanted to get an up to the minute appraisal of the liklihood of an IMF intervention on the back of the anglo announcement today.

SkepticOne

dan_d wrote: »

I don't mean to be rude OP, but there are an extremely large number of threads on this very subject scattered around the politics and the Irish economy forums.

You should get a good idea of what people think from those.

In fairness, he posted it in the economics forum not here.

feicim

heybaby wrote: »

what are the fiscal ramifications for Ireland if they do come into the equation?

This article has some interesting views on the IMF.

http://www.999ideas.com/blog/?p=192

Now at first glance it seems like a nice idea to help a struggling country, but how do these organizations actually work? According to the information I found, they do more harm than good. The money loaned byt the IMF, for example, is used to repay creditors, who are often large U.S. Banks. This allows the troubled nations to borrow even more money from banks, even as they still owe the money to the IMF. However, countries that get these debts in order to repay other debts have to meet strict IMF demands. These can include tax increases, budget cuts, and other “austerity measures.”.

In other words, poorly run governments are bailed out - probably with much of the money going to corrupt officials - and the people of these poor countries are taxed more heavily so the wealthy owners of the banks can get wealthier. As Ralph Nader points out, this is effectively a subsidization of banks at our expense and the expense of the poor in those countries. Plus, the process perpetuates what it’s supposed to remedy: the effects of bad loans. The IMF (usually working with our Treasury Department) bails out the banks, effectively taking away the risk and saying, “if you loan too much we won’t let you fail.”

Sounds like the EU is already doing the job of the IMF by loaning Ireland money.

KINGVictor

Time Magazine wrote: »

One of the great difficulties of economics is that people are adaptive. It's a system that endogenises itself when you don't expect it to. For example, if rates were greater than 5% and NTMA was depleted, and we faced a serious threat of default, expect the national solidarity variable to shoot forward and suddenly the populace accepts higher taxes.

Good analysis.

Maybe its another reason why most economists and economics as a Social science should perharps be more flexible and realistic in their sometimes rigid epistemological positions.

Most economists are positivist inclined, which makes sense because economics is basically about numbers but if we borrow a leaf from finance practitioners/researchers that are using qualitative methods/mindsets to understand issues such as herd-behaviours, the better it will be for economics as a science.

There is tremendous anger and suspision out there about economists( a lot of this anger is misguided) and understandably, a lot of folks do not understand the complexities of economic analysis.
However, the intrinsic nature of economic research/practise is seen (sometimes truthfully) as being too distant from reality and therefore treats humans as some inanimate variable. Economics is a science but the main subject matter that is studied (you and I) unlike the natural sciences is inherently unpredictable/ convoluted and subject to unexpected changes.

johnnyskeleton

heybaby wrote: »

Indeed , however thats why i framed my question in light of 'today's 'announcement regarding the 33% increase in funds to anglo, this situation is a fluid one, the situation this week is more grave than last week, i wanted to get an up to the minute appraisal of the liklihood of an IMF intervention on the back of the anglo announcement today.

It's not an exact science that can be updated on a daily basis.

If you want to hear that the liklihood of us borrowing fromt the IMF is currently 7.35% (compared to from the EU a whopping 28.63%) then fine, but it's still arbitrary.

Idbatterim

as a middle class private sector worker with no debt, I reckon the sooner they arrive the better!

Coillte_Bhoy

Idbatterim wrote: »

as a middle class private sector worker with no debt, I reckon the sooner they arrive the better!

Well hopefully you also have no kids in school, have no medical needs, in fact hopefully you dont avail of any public services at all. Also in a further depressed economy no doubt the private sector company you work for will obviously thrive. Dear god, words fail me at times, the level of ignorance out there.

Idbatterim

well excuse the ignorance! im self employed, do you know the extreme cost cutting that the company has had to implement? the extra hours required? then I see the absolute opposite extreme in the PS, but your probably right, I am being unreasonable. Some of our Public Servants really are worth double to triple what the German and British counterparts are on, sure arent we different?

Coillte_Bhoy

Idbatterim wrote: »

well excuse the ignorance! im self employed, do you know the extreme cost cutting that the company has had to implement? the extra hours required? then I see the absolute opposite extreme in the PS, but your probably right, I am being unreasonable. Some of our Public Servants really are worth double to triple what the German and British counterparts are on, sure arent we different?

I agree with you but it's not like the IMF are going to just come in reduce PS numbers and cut wages is it? Public services will be slashed as a result and the economy could go into a secver deflationary spiral. Surely it's better that we try and rectify things our selves?

femur61

Idbatterim wrote: »

as a middle class private sector worker with no debt, I reckon the sooner they arrive the better!

Couldn't agree more. I know I sound like a broken record at this stage but so many managers overpaid in the HSE, so many underpaid. So much money wasted, OUR money.

Coillte_Bhoy

Could all the posters who are creaming themselves at the thought of the IMF taking control of our financial affairs please outline why and what exactly they think the IMF will do?

ei.sdraob

Coillte_Bhoy wrote: »

Could all the posters who are creaming themselves at the thought of the IMF taking control of our financial affairs please outline why and what exactly they think the IMF will do?

if they tell the unions to **** off

then that would alone be worth the invitation

tara73

firstly, before thinking of the imf getting involved in ireland, the european union is and will be involved and will do everything to sort the mess out in what way ever.

ireland is part of the european union and it's the last straw for the eu to involve the imf, see greece.

for anybody interested in the imf and their work, argentinias default in 2001 is a recent example, here's a link to a report about it:
http://www.ieo-imf.org/eval/complete/pdf/07292004/report.pdf

loads of more information on the internet with argentinia as a latest example.

Idbatterim

the thing is Ireland is a tiny country, there are god knows how many americans states, with a multiple of the size and population of here, do they have the numbers of hospitals, schools etc that we do? that is a genuine question by the way. My dad is German, and couldnt / cant understand, how nothing runs properly here, given its such a small country. As long as evey Parish wants their own city like facilities, and infrastructure and services, and every local TD is trying to maintain this, and be all things to all people, we are screwed!

RobbieTheRobber

Why do we want the IMF to come in.?
For a body that is being touted to fix everything i dont rememebr at any point during 2002 to 2007 when the IMF came out and told the world wide banking sector about the bubble that was being allowed to bloom and the consequences.

So to me for this bunch of economists to be touted as the saviours when I have seen no evidence of them ever doing this, is really really funny.

ei.sdraob

RobbieTheRobber wrote: »

Why do we want the IMF to come in.?
For a body that is being touted to fix everything i dont rememebr at any point during 2002 to 2007 when the IMF came out and told the world wide banking sector about the bubble that was being allowed to bloom and the consequences.

So to me for this bunch of economists to be touted as the saviours when I have seen no evidence of them ever doing this, is really really funny.

i posted links and quotes before in a post (cant find it now among my thousands of posts) where the IMF has been reported on in media warning Ireland since about 2002 ....

George Orwell 1982

Idbatterim wrote: »

well excuse the ignorance! im self employed, do you know the extreme cost cutting that the company has had to implement? the extra hours required? then I see the absolute opposite extreme in the PS, but your probably right, I am being unreasonable. Some of our Public Servants really are worth double to triple what the German and British counterparts are on, sure arent we different?

Wait til your taxes rise.

The public sector will be reduced to a skeletan service but you'll see that this would reduce our debt problems very much. You'll then be paying much higher taxes to pay for the bank bailout for well over a decade. Who will you blame then?

mox54

as a private sector working class employee with debts to beat the band!!, kids and mortgage and all that hoo...it makes no mind to me whether the IMF are here or not:), it's still a massive mess that I'll personally have to dip into my pocket to help sort it out, IMF or not......... so lets just get on with it and stop the hysterical speculation!!, imo we dont need the imf and are wealthy enough to cope ourselves!

lessons need to be learned and heads roll!! Govt change is essential:cool:

RobbieTheRobber

ei.sdraob wrote: »

i posted links and quotes before in a post (cant find it now among my thousands of posts) where the IMF has been reported on in media warning Ireland since about 2002 ....

and what about the 3 to 4 trillion world wide banking crisis, which while not causing our problems definetly worsened them. Did they warn the world about that?

Voodoo_rasher

heybaby wrote: »

On the back of todays announcement regarding the blackhole that is Anglo, I'm Looking to see what people think about the IMF's entry into Ireland, Personally i think this is increasingly likely within the next 6 months, what do you think in terms of a time frame and what are the fiscal ramifications for Ireland if they do come into the equation?

Capital Gains Tax may not stay at 25% forseeable future for example; forcing ppl to alter their future plans, hurried sales of assets to escape a sharp drop in proceeds etc

daltonm

tara73 wrote: »

firstly, before thinking of the imf getting involved in ireland, the european union is and will be involved and will do everything to sort the mess out in what way ever.

ireland is part of the european union and it's the last straw for the eu to involve the imf, see greece.

for anybody interested in the imf and their work, argentinias default in 2001 is a recent example, here's a link to a report about it:
http://www.ieo-imf.org/eval/complete/pdf/07292004/report.pdf

loads of more information on the internet with argentinia as a latest example.

Here's an even more up to date look http://www.wsws.org/articles/2010/may2010/roma-m18.shtml

"The main points of the austerity package include a 25 percent cut in public salaries, a 15 percent cut in pensions and a 15 percent cut in unemployment benefits. These measures, taken to offload the debt the government owes to the international bankers onto the backs of the working class, would have been enough to condemn a large portion of the population to misery. But the plan continues with provisions to dismantle virtually everything that was left of the welfare state."
>>>>>snip
"The new austerity package include a 25 percent cut to child benefits, a 15 percent cut to benefits for caring for a disabled person, the elimination of benefits for young families, the elimination of compensatory payments for sacked public employees, a freezing of benefits for single parents, the abolition of transport subsidies for students and the elderly, and the removal of energy subsidies for households."

Justin Collery

The Romanian example is interesting. Their GDP is not a million miles from ours (in $ terms about $200bn) and their loan requirements were not a million miles from ours either (about $20bn). Look at the measures that were implemented:

public wages down by 25 percent
value-added tax up to 24 percent
pensions down by 15 percent
unemployment benefits down by 15 percent
Heating allowances cut to 0 percent (yes gone)

Many more besides. I'm not sure why the same will not happen in Ireland, it's the same people doling out the orders.

daltonm

jcollery wrote: »

The Romanian example is interesting. Their GDP is not a million miles from ours (in $ terms about $200bn) and their loan requirements were not a million miles from ours either (about $20bn). Look at the measures that were implemented:

public wages down by 25 percent
value-added tax up to 24 percent
pensions down by 15 percent
unemployment benefits down by 15 percent
Heating allowances cut to 0 percent (yes gone)

Many more besides. I'm not sure why the same will not happen in Ireland, it's the same people doling out the orders.

Another interesting thing to note for example is that the old age pension in Romania was 160 per month - barely enough for the people to survive on yet it was still subject to a 15% cut.

I certainly hope we can sort out this mess ourselves - the IMF would shred us to pieces if this is what they can do in Romania.

Mr Benevolent

daltonm wrote: »

Another interesting thing to note for example is that the old age pension in Romania was 160 per month - barely enough for the people to survive on yet it was still subject to a 15% cut.

I certainly hope we can sort out this mess ourselves - the IMF would shred us to pieces if this is what they can do in Romania.

Romania has a significantly lower cost of living.

ei.sdraob

Confab wrote: »

Romania has a significantly lower cost of living.

Have you ever asked "why does Romania have a significantly lower cost of living"?

wages and welfare are a significant factor (among others) in the runaway inflation we had

smokingman

Confab wrote: »

Romania has a significantly lower cost of living.

Thats not the point, the GDP and borrowing requirements are similar. The % cuts will be the same here, nothing to do with cost of living or absolute numbers.

Smoking man

femur61

The minimum wage here is too high. We holidayed in Ireland this year and a meal for 5 in a pub was €80. I don't blame the pub owner for being greedy the price of the meal had to cover not only overheads of pub, but staff wages as well. This is one sector that needs to be looked at.

danbohan

jcollery wrote: »

The Romanian example is interesting. Their GDP is not a million miles from ours (in $ terms about $200bn) and their loan requirements were not a million miles from ours either (about $20bn). Look at the measures that were implemented:

public wages down by 25 percent
value-added tax up to 24 percent
pensions down by 15 percent
unemployment benefits down by 15 percent
Heating allowances cut to 0 percent (yes gone)

Many more besides. I'm not sure why the same will not happen in Ireland, it's the same people doling out the orders.

no need to wait for imf to do this , all of the above ++ should be done in next budget anyway

jprender

danbohan wrote: »

no need to wait for imf to do this , all of the above ++ should be done in next budget anyway

It should be, but no politician or party will make these cuts.

Hard decisions my arse.

irishh_bob

Confab wrote: »

Romania has a significantly lower cost of living.

if IMF intervention resulted in cuts in public sector pay of 25% and social wellfare and pension cuts of 15% , i would consider that getting off lightly

public sector pay in the uk is around 25% less than in ireland and social wellfare is more than half of what it is in ireland , i spent a week in the north of england and scotland in the past month , i can honestly say i didnt notice the cost of living much cheaper than ireland , beer was no cheaper , petrol was more expensive , eating out was every bit as expensive and accomodation was also as expensive ( 35 pound per night for a B+B ) , the south of england is more expensive again