Would a political consenses help solve our problems?

LK1

I ain't no expert but seems to me at this stage that the bond markets, rather than having a problem with the 15bn 4 year plan(which the EU agree is the best way forward), have a problem with the ability of the Irish government to implement it. So it's the political infighting and indecisiveness that's the real problem.
Would a last ditched attempt at getting the main political parties to back fully the implementation of the plan make the bondholders happy and keep the EU/IMF from the door and maintain our sovereignty. As a carrot the govenment could agree with the opposition to a general election in the new year.

thebman

No we need an election, the problem is also that the markets don't trust the present government, the ones that created the crisis who have a load of political decision making they don't want to be held accountable so can't make certain changes that would greatly benefit our situation.

We need an election with a government with a strong majority.

LK1

Wouldnt an election now cause more jitters in the bond markets?I mean there's still no guarentee a new govenment would implement the necessary cuts due to the usual political pressures. If the markets knew the corrections would take place no matter what government, it might settle things?

Inquitus

A union backed party like Labour getting in is hardly going to calm the Bond markets. Though I do not disagree that a weak Gov with no mandate also does nothing to calm the bond markets. Either way we are shafted, surely we have the 3 most incompetent major political parties of any developed nation.

The_Honeybadger

LK1 wrote: »

I mean there's still no guarentee a new govenment would implement the necessary cuts due to the usual political pressures.?

The crux of the problem isn't it. I think we can assume there will be an election in 2011. The first political leader to stand up in the Dail and spell out to the unions, banks and any other group who wish to preserve the status quo, that the game is up and sweeping changes are on the way whether they like it or not will get my vote, once I believe they actually mean it and will follow through. Problem is of course that we have no such leader at the moment. As for consensus, I suspect FG know the depth of the problems and are happy to bide their time until at least some of it is sorted, they have little to gain by coming into power now so may help get the budget through, a cowardly move dressed up as in the national interest. Their support of the Croke park deal really makes you wonder if they would be any better than FF, the only thing they would bring to the table IMO is a clean pair of hands. None of their policies are that inspiring although their Faircare plan may be worth looking at.

thebman

LK1 wrote: »

Wouldnt an election now cause more jitters in the bond markets?I mean there's still no guarentee a new govenment would implement the necessary cuts due to the usual political pressures. If the markets knew the corrections would take place no matter what government, it might settle things?

At this stage we already can't borrow so if they are jittered more we are in the same boat anyway.

All the parties have said they will make the cuts, they only disagree on where the cuts will be made.

LK1

thebman wrote: »

At this stage we already can't borrow so if they are jittered more we are in the same boat anyway.

All the parties have said they will make the cuts, they only disagree on where the cuts will be made.

I agree. But the markets apparently aren't convinced our politicians will do it and we'll end up defaulting. But what if they managed to agree jointly on exactly where the cuts will be made leaving no room for doubt, no matter what government.

thebman

LK1 wrote: »

I agree. But the markets apparently aren't convinced our politicians will do it and we'll end up defaulting. But what if they managed to agree jointly on exactly where the cuts will be made leaving no room for doubt, no matter what government.

I don't believe that would restore confidence, the problem is the current government can't be trusted as they go us into this mess and have not done what they should have over the past two years to move us toward getting out of this mess.

Our government has been producing misleading figures and either getting it wrong time and time again or intentionally misleading them and either way the game is up.

At this stage, the markets could fear we are rigging our books, Greek style.

Anyway there are literally billions being wasted in quango's with FF appointee's that won't be dismantled under a FF government that could easily be tackled by a more responsible, alternative government.

At the moment, there is something silly like 13Bn being spent on Quango's that were created during the boom. Many of these are duplicating efforts, some seem to serve no real purpose and others are offering good services but we got by fine without them previously.

We need a top down review of what is essential and the government that has been creating the waste cannot be objective in removing it TBH.

rumour

thebman wrote: »

No we need an election, the problem is also that the markets don't trust the present government, the ones that created the crisis who have a load of political decision making they don't want to be held accountable so can't make certain changes that would greatly benefit our situation.

We need an election with a government with a strong majority.

Thats true, but look at the consequences of an election.

When will we have a new government? January, February, March?

When will we have a new budget? February, March April?

Were already into the end of Q1 of the year with no budget and no cut backs agreed. What the markets see is this eventuality, meaning no decision on spending let alone control for some months. The result of which only accelerates our impending insolvency.

Add to that the fact that some political parties are openly advocating in this country that the cuts do not need to be as severe as suggested. All this does is reduce our future ability to borrow. So for example the labour domestic campaigning will have the opposite effect to what they are selling to voters. They get into power and have nobody to lend to them. Thus they will be forced to impose cuts probably more severe than those proposed now because the finances will be in a worse state.

Every indicator is leading to a major major reduction in government spending, the longer we leave it the worse the reduction in spending will be. Why do you think the main Unions are so silent currently.

Politically and financially we are out of options. However it would be nice to have a government that could tell this to the people.

What we are at to me is somewhat akin to being in the middle of a battle and the troops decide to take time out to reach consensus on what to do next. All the time the enemy advances.

thebman

rumour wrote: »

Thats true, but look at the consequences of an election.

When will we have a new government? January, February, March?

When will we have a new budget? February, March April?

Were already into the end of Q1 of the year with no budget and no cut backs agreed. What the markets see is this eventuality, meaning no decision on spending let alone control for some months. The result of which only accelerates our impending insolvency.

Add to that the fact that some political parties are openly advocating in this country that the cuts do not need to be as severe as suggested. All this does is reduce our future ability to borrow. So for example the labour domestic campaigning will have the opposite effect to what they are selling to voters. They get into power and have nobody to lend to them. Thus they will be forced to impose cuts probably more severe than those proposed now because the finances will be in a worse state.

Every indicator is leading to a major major reduction in government spending, the longer we leave it the worse the reduction in spending will be. Why do you think the main Unions are so silent currently.

Politically and financially we are out of options. However it would be nice to have a government that could tell this to the people.

What we are at to me is somewhat akin to being in the middle of a battle and the troops decide to take time out to reach consensus on what to do next. All the time the enemy advances.

We'll personally I think us going to the bailout package is inevitable anyway.

Our present government have gotten every other figure wrong so there is no reason to suspect they are right in this case.

Cuts can be swift once a change of government occurs as they can deal with the massive excess FF waste quangos much faster than FF can try to cut public pay and deal with the backlash.

So the markets might be edgy for the first month but if the new government announces they are dismantling 30 quango's in the next 4 months and it will save the state 4 billion extra on top of the December budget then it will likely make markets more upbeat that we are capable of tackling this mess.

The December budget must be passed in any case and all parties (even Labor) have said they will not roll back those cuts so FF cut 6 billion from the budget and the government collapses and before we back to the markets, we elect a new government that cuts 4-5 billion more in useless quango's and we are in very good shape to be able to borrow.

Lame Lantern

What would help us is if we had broad-based consensus across society, not merely in the political sphere. We should have been treating this crisis as an inevitable natural disaster, the sudden exploitation of our economy's weaknesses arising from an unforeseen banking liquidity shortfall happening on a global scale, resulting in the insolvency of Ireland's small-to-medium sized financial institutions. Whether you agree with this assessment or not, it's largely how the crisis has been observed in countries that have dealt successfully with similar issues to us, like in the UK.

There should have been all-party consensus and a media interested in covering the situation with a calm mindset. Instead we have opportunistic opposition parties rewriting their own histories and riding a wave of blithe anger into power, a news media dominated by failed politicians now handed enough ammunition to snipe successfully at a government they've been envious of for last ten years (failing to legitimately analyse the situation in favour of propogating their own editorial lines) as well as a wave of profiteering "economists" writing books and giving panicked interviews to Morning Ireland, keeping the public confused and looking after their own profiles.

Throughout this crisis we have not seen any willingness to legitimately troubleshoot and problem-solve from anybody outside our increasingly mute government and now that market opinion and international coverage are becoming so much more critical we're going to suffer as a result.

Sand

We arent going to have broad consensus. There is a big trough and quite a few groups have their snouts in it, and they arent going to retreat from it because they are asked nicely.