Ireland in Preliminary Bailout Talks

jumpguy

The Irish Republic is in preliminary talks with eurozone officials for financial support, the BBC has learned.

Correspondents say it is no longer a matter of whether but when Dublin formally approaches the Financial Stability Fund (FSF) for a bailout.

The provisional estimate for FSF loans lies between 60bn and 80bn euros.

The Irish government has not formally denied that it is in talks about accessing the FSF, insisting instead that "it makes no sense" to do so.

http://www.bbc.co.uk/news/business-11750676

(With a rather flattering picture of Brian Cowen, might I add).

So it looks like what was feared is now looming, looking more like an inevitability rather than a worst-case scenario. We're feeked altogeher, so we are.

Interesting to see how this will pan out, who would've thought 5 years ago we would be in this situation?

FreudianSlippers

No source. Stay classy BBC.


Getting a loan from the EU Stability fund wouldn't be so bad IMO.

strobe

I don't get this really. Could someone explain to me what is so bad about taking a sh1tload of money off of the Germans and their mates if they are willing to give it to us? I mean we don't even have to pay interest on it right? Cheers.

jumpguy

strobe wrote: »

I don't get this really. Could someone explain to me what is so bad about taking a sh1tload of money off of the Germans and their mates if they are willing to give it to us? I mean we don't even have to pay interest on it right? Cheers.

It means whether a bunch of unions like it or not, or no matter how many students/oldies take to the streets, we'll be in for some serious foreign-controlled mad-craic austerity.

orourkeda

Another reason to believe that the Celtic Tiger was a fantasy.

danbohan

jumpguy wrote: »

It means whether a bunch of unions like it or not, or no matter how many students/oldies take to the streets, we'll be in for some serious foreign-controlled mad-craic austerity.

good !,

My name is URL

orourkeda wrote: »

Another reason to believe that the Celtic Tiger was a fantasy.

All tiger economies are based on fantasy and a static outlook

marglin

the really bad thing about it is its embarassing and it will seriously deter foreign investment, something a small open economy like irelands depends on.

and yes we will have to pay fu.ckloads of interest on it, we would be paying them back for twenty years.

they dont give a sh.ite about the irish public and will happily close schools, hospitals, you name it, as long as they get their money back. its not a free ride

the thing is we are small and relatively unimportant, we will be made an example of to teach the bigger problem countries like spain and italy a lesson

book your flight now if you can get out theres a fire

Herodotus

The following was just published on the BBC's website at 3pm.

The Irish Republic is in preliminary talks with eurozone officials for financial support, the BBC has learned.

Correspondents say it is no longer a matter of whether but when Dublin formally approaches the Financial Stability Fund (FSF) for a bailout.

The provisional estimate for FSF loans lies between 60bn and 80bn euros.

The Irish government has not formally denied that it is in talks about accessing the FSF, insisting instead that "it makes no sense" to do so.

There's no mention of it over on RTE.ie...

Eitherway I'm glad to be honest. The farce and spin that has continued over recent years is now over.

Why? the powers that be - both Irish policticians' and mardarins' - complete incompetence and destruction of the public finances is now clear for all to see.

Let no one blame the IMF / EU / Germans or any other 'foreigner' for the suffering already inflicted and that which will continue to be inflicted on Irish citizens in the months and years to come.

It was Irish politicians, Irish policymakers, Irish regulators and other Irish citizens who are to blame for the state of the nation. Let no one deride that fact.

That is Irish sovereignty.

I hang my head in shame at the inevitable bailout from Europe, but hope that Irish society, its political system and governement learns a harsh and much needed lesson.

We all in this together.

FreudianSlippers

Original thread is original.

orourkeda

Ooh ah IMF

Ooh ah IMF

My name is URL

marglin wrote: »

the really bad thing about it is its embarassing and it will seriously deter foreign investment, something a small open economy like irelands depends on.

and yes we will have to pay fu.ckloads of interest on it, we would be paying them back for twenty years.

they dont give a sh.ite about the irish public and will happily close schools, hospitals, you name it, as long as they get their money back. its not a free ride

the thing is we are small and relatively unimportant, we will be made an example of to teach the bigger problem countries like spain and italy a lesson

book your flight now if you can get out theres a fire

Make an example of.. by effectively destroying us? Yeah, that'll instill a sense of calm in the rest of Europe /s

PCros

The managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told reporters at the Apec summit in Yokohama on Saturday that his organisation had not been asked for aid.

"So far I have not had a request, and I think Ireland can manage well," he said.

That just contradicts the BBCs article which is full of shíte.

Cookie_Monster

PCros wrote: »

The managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told reporters at the Apec summit in Yokohama on Saturday that his organisation had not been asked for aid.

"So far I have not had a request, and I think Ireland can manage well," he said.

That just contradicts the BBCs article which is full of shíte.

thats because they've asked the EU for their fund, not the IMF

Kintarō Hattori

Damn, I'm in the process of buying a house with the missus? I honestly don't know if I should continue (haven't signed anything yet) or hold off? It's modest, 2 bedroom for €135k in Balbriggan, mortgage will be about €600 pm. Will house prices come down more, with such a small mortgage do we go ahead anyway?

I just don't know now, so all advice is welcome folks.

jumpguy

PCros wrote: »

The managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told reporters at the Apec summit in Yokohama on Saturday that his organisation had not been asked for aid.

"So far I have not had a request, and I think Ireland can manage well," he said.

That just contradicts the BBCs article which is full of shíte.

Yeah, RTE have an article now:

The Managing Director of the International Monetary Fund, Dominique Strauss-Kahn, has said Ireland can manage its economy on its own.
Speaking on the sidelines of an Asia-Pacific Summit in Japan, Mr Strauss-Kahn said Ireland's difficulties had been principally caused by one bank and were very different from those of Greece whose economy faced deep-seated problems.


Mr Strauss-Kahn told reporters in Yokohama that Ireland had not asked the IMF for aid.


'So far I have not had a request, and I think Ireland can manage well,' he said.


Eurozone sources said yesterday that discussions on a possible aid package were under way, with one official saying it was 'very likely' Ireland would get financial assistance from the EU facility set up after Greece was forced to seek help in May.


However, the Government has repeatedly denied that it plans to access EU funds.


European Central Bank President Jean-Claude Trichet today declined to comment on the situation in Ireland, but said governments need to step up budget tightening.

http://www.rte.ie/news/2010/1113/economy.html

How strange...maybe the BBC article is just an attempt by the English to destroy us? :pac:

griffdaddy

Can we not just get the money and then not answer the phone when they ring up looking for it back?

K-9

strobe wrote: »

I don't get this really. Could someone explain to me what is so bad about taking a sh1tload of money off of the Germans and their mates if they are willing to give it to us? I mean we don't even have to pay interest on it right? Cheers.

Think the Greeks pay about 5/6%.

Anyway, Cowen said there has been no talks. That's me reassured.

BraziliaNZ

Lets burn down the f**king Dail and everyone in it

FreudianSlippers

Kintarō Hattori wrote: »

Damn, I'm in the process of buying a house with the missus? I honestly don't know if I should continue (haven't signed anything yet) or hold off? It's modest, 2 bedroom for €135k in Balbriggan, mortgage will be about €600 pm. Will house prices come down more, with such a small mortgage do we go ahead anyway?

I just don't know now, so all advice is welcome folks.

That seems like a lot to pay per month for €135k. What's your loan amount?

FreudianSlippers

BraziliaNZ wrote: »

Lets burn down the f**king Dail and everyone in it

let's advocate murder! hurray.

Mrmoe

BraziliaNZ wrote: »

Lets burn down the f**king Dail and everyone in it

Great idea, bogus insurance claim, that is bound to get us out of the hole we are in:p

PCros

Cookie_Monster wrote: »

thats because they've asked the EU for their fund, not the IMF

True...whats the difference though?

Not being smart

Kintarō Hattori

OisinT wrote: »

That seems like a lot to pay per month for €135k. What's your loan amount?

Ahem, it is high at 92% but €600pm is considerably lower than we've been paying in rent for the last 7 years. Plus we don't have any major expenditure as we don't go out/don't drink/don't smoke etc.

BraziliaNZ

OisinT wrote: »

let's advocate murder! hurray.

Let's allow a group of corrupt politicians to allow a generation to be destroyed!

Poly

Kintarō Hattori wrote: »

Damn, I'm in the process of buying a house with the missus? I honestly don't know if I should continue (haven't signed anything yet) or hold off? It's modest, 2 bedroom for €135k in Balbriggan, mortgage will be about €600 pm. Will house prices come down more, with such a small mortgage do we go ahead anyway?

I just don't know now, so all advice is welcome folks.

If it were me, I'd sit tight for a while, it will probably be still there next year

BraziliaNZ

In before the "I for one welcome our..." post

FreudianSlippers

Kintarō Hattori wrote: »

Ahem, it is high at 92% but €600pm is considerably lower than we've been paying in rent for the last 7 years. Plus we don't have any major expenditure as we don't go out/don't drink/don't smoke etc.

Not trying to be smart actually. Just wondering. €124200 repayments should probably be between €500 and €550pm.

I think there are 3 year fixed mortgages at 3.9% (or something) monthly payments of €540ish and then €500 for the rest of the term.

If your house went down to €100,000 it'd be about €100 less per month anyway.
If you have enough after bills and stuff to afford €1200pm you'd probably be fine.

Herodotus

The quote by the IMF was originally quoted by Reuters at 8.41am this morning.

It's out of date and spin. Remember the golden rule in politics - never believe something until it's officially denied.

This just went live over on Bloomberg.

Ireland is being urged by European policy makers to take emergency aid to contain a debt crisis rattling their markets, according to a person briefed on the discussions.

In a conference call of European Central Bank officials around noon Frankfurt time yesterday, Ireland was pressed to seek outside help within days, the person said on condition of anonymity. Separately, a European Union official said a request for assistance was likely even as Irish Finance Minister Brian Lenihan told RTE Radio that such a call “makes no sense” as the government is fully funded to mid-2011.

Irish bonds rose from a record low yesterday, gaining for the first time in 14 days as traders bet a bailout was near. Prime Minister Brian Cowen said for the first time that he is working with fellow EU leaders as “there are issues affecting the wider euro area” and that they are trying to “ensure that the bond markets respond positively to the euro.” He reiterated that his debt-strapped country has not sought cash.

“It seems difficult for Ireland to avoid tapping the fund unless they have new rabbits to pull out their hat,” said Julian Callow, chief European economist at Barclays Capital in London.

An ECB spokeswoman declined to comment and the Finance Ministry in Dublin said no talks on emergency funds were under way. ECB President Jean-Claude Trichet, speaking today in Tutzing, Germany, declined to comment on Ireland.

Possible Aid

Ireland could draw on the 60 billion euro ($82 billion) segment of the broader 750-billion-euro fund set up by the EU and International Monetary Fund in May, Irish state broadcaster RTE said, without saying where it obtained the information. The smaller pool is funded directly by the European Commission, the EU’s Brussels-based executive branch.

Luxembourg Prime Minister Jean-Claude Juncker, who chairs the panel of euro-area finance ministers, said yesterday there was “no immediate reason” to think Ireland will request cash and that officials would not meet before regular monthly talks in Brussels next week.

IMF Managing Director Dominique Strauss-Kahn said he was prepared to help. “If at one point in time, tomorrow, in two months or two years, the Irish want support from the IMF, we will be ready,” he told reporters today in Yokohama, Japan.

Cowen’s Conversations

Irish officials yesterday spoke to the offices of Trichet, European Commission President Jose Barroso and German Foreign Minister Guido Westerwelle, resisting the bailout that EU officials hope would calm markets, the Irish Times said without citing sources.

The British Broadcasting Corp. reported today that preliminary talks were under way for emergency aid. A Finance Ministry spokesman repeated a denial from yesterday that such talks were happening.

The premium that investors demand to hold Irish 10-year sovereign bonds over the benchmark German bonds was 564 basis points at 3:59 p.m. in London, down from a record 646 points yesterday.

Yields on bonds of Spain and Portugal jumped earlier in the week amid concern that fallout from Ireland would spread. The extra yield that investors demand to hold Portuguese 10-year bonds instead of German bunds climbed to a record 484 basis points on Nov. 11.

A decision by Ireland to use the European Financial Stability Facility would be a “circuit breaker” for the market turmoil and boost the euro, Emma Lawson, a Hong Kong-based currency strategist at Morgan Stanley, said in a report yesterday.

Euro’s Decline

At the end of European trading yesterday the euro was poised for its biggest weekly loss since August although it climbed yesterday from a six-week low against the dollar.

Ireland’s woes formed part of the debate at the Seoul summit of Group of 20 leaders, from which the finance chiefs of Germany, France, the U.K., Spain and Italy successfully cooled market concerns by saying in a statement that a plan being debated to have investors cover future bailout costs would have “no impact whatsoever” on existing debt.
The drafting of that crisis program hasn’t “been helpful,” Cowen said in an interview with the Irish Independent newspaper published yesterday. German Chancellor Angela Merkel rejected such criticism, saying in Seoul yesterday “the future crisis mechanism has nothing to do with the debate going on right now.”

“Clarification was needed and it is good news it’s now out there,” said Erik Nielsen, chief European economist at Goldman Sachs Group Inc.

Bailout Fund

EU countries established the bailout fund in May to protect the euro area from the fallout of the Greek-led debt crisis. Speculation has grown that Ireland would need it after a housing-led recession and the need to save its biggest lenders plunged it into fiscal turmoil.

Bailing out Ireland’s financial system could cost as much as 50 billion euros under a “stress case” scenario compiled by the Finance Ministry and central bank. The country’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said yesterday.

Irish officials have indicated they hope a 2011 budget, due for release on Dec. 7, will placate markets as they try to cut a budget deficit which will be about 12 percent of gross domestic product this year, or 32 percent when the costs of the banking rescue are included. Lenihan’s plan includes 6 billion euros of spending cuts and tax increases next year.
Time Needed

“The more time elapses, the bigger is the chance that the results of fiscal policies will show,” said Holger Schmieding, chief economist at Joh Berenberg Gossler & Co. in London. “The more time elapses before a country taps the fund the better.”

Ireland’s banks are nevertheless becoming more dependent on the European Central Bank after it said in September saving its lenders may cost as much as 50 billion euros as the state sinks more funds into nationalized Anglo Irish Bank Corp. and other lenders. Lenders’ borrowings from the ECB rose 7 percent last month, according to statistics published on the central bank’s website yesterday.

“The chances are rather big that at some point they need to ask for financial assistance just to calm down the situation,” Aline Schuiling, an economist at ABN Amro Bank NV in Amsterdam, said yesterday. “There will have to be a solution.”

jumpguy

Ireland being "urged" by the EU to take aid worries me tbh. Competition is everything and other EU countries aren't happy with some of our business-attracting incentives, mainly the corporation tax. EU loans might be a good solution in the short-term for us, but may be self-serving for the EU...

Don't take this as some anti-EU bashing, I think this is a legitimate worry tbh.

Hail 2 Da Thief

Kintarō Hattori wrote: »

Will house prices come down more.

Yes & expect prices to drop even further than you'd ever have believed possible.
The country & it's people are broke. There's a huge amount of properties lying empty throughout the country because there is no demand to purchase them.
If you want a good source of info on the Irish housing market visit http://www.thepropertypin.com/

Kintarō Hattori

OisinT wrote: »

Not trying to be smart actually. Just wondering. €124200 repayments should probably be between €500 and €550pm.

I think there are 3 year fixed mortgages at 3.9% (or something) monthly payments of €540ish and then €500 for the rest of the term.

If your house went down to €100,000 it'd be about €100 less per month anyway.
If you have enough after bills and stuff to afford €1200pm you'd probably be fine.

It is about €580pm as far as I can recall. If we both still have jobs we can easily afford the mortgage as we'd be left with quite a bit even after travel expenses and the various bill/insurances that come with a house.

Even if it dropped in value to €100,000 I wouldn't be too concerned as I want to settle down and stop renting. €100pm less wouldn't be a massive difference so I could live with that.

K-9

Kintarō Hattori wrote: »

Ahem, it is high at 92% but €600pm is considerably lower than we've been paying in rent for the last 7 years. Plus we don't have any major expenditure as we don't go out/don't drink/don't smoke etc.

As others said, I'd wait, prices are hardly going to go up in the next 6 months at the minimum.

Sure any money you save, you can put the mortgage over a shorter term.

To me anything over 25 years is too long. Mine was 20, seemed long but 10 years don't be long going in!

FreudianSlippers

Kintarō Hattori wrote: »

It is about €580pm as far as I can recall. If we both still have jobs we can easily afford the mortgage as we'd be left with quite a bit even after travel expenses and the various bill/insurances that come with a house.

Even if it dropped in value to €100,000 I wouldn't be too concerned as I want to settle down and stop renting. €100pm less wouldn't be a massive difference so I could live with that.

I agree with you here too. Owning > renting. If you're paying €700pm on rent then you should pull the trigger and go for it. If you like the house and it's €580pm there's no point in waiting it out.

K-9 wrote: »

As others said, I'd wait, prices are hardly going to go up in the next 6 months at the minimum.

Sure any money you save, you can put the mortgage over a shorter term.

To me anything over 25 years is too long. Mine was 20, seemed long but 10 years don't be long going in!

I don't think they'll go up, but they may not go down drastically. I really don't think they'll go far under €100,000 but that all depends on location etc.

Totally agree with length, but not totally possible for everyone.

BraziliaNZ

It's crazy that I can't find a place to rent for myself for anything less than about 750 euro (decent place) in Dublin, when mortgage repayments are even cheaper than that these dys it seems. When will rental prices even out with purchase prices? Or can it happen? Rent is still outrageous in Dublin.

FreudianSlippers

BraziliaNZ wrote: »

It's crazy that I can't find a place to rent for myself for anything less than about 750 euro (decent place) in Dublin, when mortgage repayments are even cheaper than that these dys it seems. When will rental prices even out with purchase prices? Or can it happen? Rent is still outrageous in Dublin.

Agreed. Some friends of mine are paying out their arses on rent.

BraziliaNZ

With all these talks of property value crashing etc, unless you're earning some serious coin it's totally unfeasible to rent a place to yourself in Dublin, unless it's some pigsty of a bedsit or something.

sron

Kintarō Hattori wrote: »

It is about €580pm as far as I can recall. If we both still have jobs we can easily afford the mortgage as we'd be left with quite a bit even after travel expenses and the various bill/insurances that come with a house.

Even if it dropped in value to €100,000 I wouldn't be too concerned as I want to settle down and stop renting. €100pm less wouldn't be a massive difference so I could live with that.

It could go well beneath that though; there's really no telling at this point. If I were you, I wouldn't buy so much as a Monopoly house for another five years.

But if the house suits and you can afford it...

Princess Consuela Bananahammock

Does Ireland actually deserve bailing out? I mean, repeately voting FF, takign out obscene mortgages and actually thinking that this would go on for ever (yes, it was possibly to have seen the bubble bursting), rampant financial corruption (which we were quiet happy to turn a blind eye to)...

I'm not saying it's a good or a bad idea, just posing the question.

mikom

http://news.bbcimg.co.uk/media/images/49927000/jpg/_49927449_010512009-1.jpg

Caption for pic.

"oh oh spaghettios"

darragh16

Burn the croke park agreement before the IMF do it....

Sea Sharp

Ikky Poo2 wrote: »

Does Ireland actually deserve bailing out? I mean, repeately voting FF, takign out obscene mortgages and actually thinking that this would go on for ever (yes, it was possibly to have seen the bubble bursting), rampant financial corruption (which we were quiet happy to turn a blind eye to)...

I'm not saying it's a good or a bad idea, just posing the question.

We don't deserve it but the bail out will help prevent the euro from collapsing.

My name is URL

Ikky Poo2 wrote: »

Does Ireland actually deserve bailing out? I mean, repeately voting FF, takign out obscene mortgages and actually thinking that this would go on for ever (yes, it was possibly to have seen the bubble bursting), rampant financial corruption (which we were quiet happy to turn a blind eye to)...

I'm not saying it's a good or a bad idea, just posing the question.

Deserve to be bailed out? What would the alternative be exactly? I don't think deservedness comes into it really. If it was just allowed to collapse completely it would have an effect on the rest of Europe. Ignoring the fact that you deeply resent Ireland, it's still a silly question.

K-9

OisinT wrote: »

I agree with you here too. Owning > renting. If you're paying €700pm on rent then you should pull the trigger and go for it. If you like the house and it's €580pm there's no point in waiting it out.


I don't think they'll go up, but they may not go down drastically. I really don't think they'll go far under €100,000 but that all depends on location etc.

Totally agree with length, but not totally possible for everyone.

True, just outlining the worst case.

€135,000 doesn't seem bad but thinking long term, it is a 2 bed so you'd have to think of resale values if you wanted to trade up.

drdeadlift

would it be better not to have ff at the helm if Ireland get a loan of such a large amount of money.I dont think they will know what to do with it.

Rosita

OisinT wrote: »

No source. Stay classy BBC.


Getting a loan from the EU Stability fund wouldn't be so bad IMO.

I agree. The alternative doesn't seem great anyway.

In fairness to the BBC stories which are being politically denied will tend not to have publishable sources. Doesn't necessarily make them unreliable.

There was no publishable source for Watergate either.

Princess Consuela Bananahammock

Sea Sharp wrote: »

We don't deserve it but the bail out will help prevent the euro from collapsing.

My name is URL wrote: »

Deserve to be bailed out? What would the alternative be exactly? I don't think deservedness comes into it really. If it was just allowed to collapse completely it would have an effect on the rest of Europe. Ignoring the fact that you deeply resent Ireland, it's still a silly question.

Dersrve, my good men, deserve. As I said, I wasn't commenting on whether or not it was a good or a bad idea.

My point, is this juts telling politicans and bankers, ****... we got away with it... let's go again. Accountability is going out the window, because we are not holding those accountable for what caused it.

Also, URL, "the fact that I deeply resent Ireland"...? WTF is that based on? It's as common and ignorant as "Liverpool are **** without Gerrard" or "the death pentaly will solve crime problems".

Yes, if it needs to happen it'll happen, I'm aware of that, but how long before the cycle repeats itslef?

mikom wrote: »

http://news.bbcimg.co.uk/media/images/49927000/jpg/_49927449_010512009-1.jpg

Caption for pic.

"oh oh spaghettios"

"Ah dah-da-da-da-da-daht's all folks"

FreudianSlippers

Rosita wrote: »

I agree. The alternative doesn't seem great anyway.

In fairness to the BBC stories which are being politically denied will tend not to have publishable sources. Doesn't necessarily make them unreliable.

There was no publishable source for Watergate either.

I know. The original article was only 3 lines long though, they've since updated it.

Agricola

Christ what a mess. I used to think that if the men who fought for independence could see how successive generations have managed to bankrupt the country, they'd think twice about breaking away from the uk. But considering these clowns in FF are their spiritual successors, maybe they'd be more delighted about the fact that Irishmen managed to screw us up and not a bunch of outsiders!

I hope to fúck alot of hard lessons will be learned by this and we come out the other in with a properly run democracy. I wont hold my breath though.

Tusky

Are any economists or politicans commenting on this on twitter ?

indiewindy

Agricola wrote: »

Christ what a mess. I used to think that if the men who fought for independence could see how successive generations have managed to bankrupt the country, they'd think twice about breaking away from the uk. But considering these clowns in FF are their spiritual successors, maybe they'd be more delighted about the fact that Irishmen managed to screw us up and not a bunch of outsiders!

I hope to fúck alot of hard lessons will be learned by this and we come out the other in with a properly run democracy. I wont hold my breath though.

Unless Zanu FF are wiped out at the next election lessons wont be learned