IMF and Mortgages

racso1975

I will start off by saying I have very little understanding of economics so go easy on me, my knowledge is just gained from listening to media coverage etc.


As far as i know when IMF arrives in a country one of the first actions is to devalue that currency. Hence leading to a big increase in exports and employment in that sector.

That obviously cant happen in this country due to the euro. So I expect that draconian actions such as a dramatic decrease in public expenditure will be increased.

Latvia had public sector pay decreased by 40-50% I beleive. There is also a huge community and voluntary sector employed in this country by public expenditure.

So lets take the example of athe above cuts being implemented. (I would appreciate if this did not turn into a private versus public sector debate.) Salaries and jobs gets slashed. Interest rates will increase next year for 2 reasons I suspect.

1) The ECB will raise rates to reduce inflation in other member countries hence variable and trackers go up.

2) Irish banks raise rates to increase profit (keeping in mind there has been no talk of rates not changing in exchange of another bailout)

Will any type of measure be put in place to assist people in these circumstances. I can only imagine how difficult it is going to be for people in the above sectors especially when you add in the direct and indirect tax's from the upcoming budget ( i realise other industries like bank officials etc will be hit too). Or will it be a case of tough cheese (if your entitled to it)

While i'm aware that the current goverment want to continue with the CPA as part of the 4 year plan i can see this being cut when a new goverment is elected and also doubt that it will have the support of IMF/EU.

So in short do the IMF support and introduce support packages for the above or is it completely based on cut cut cut?


As saidI would appreciate if this did not turn into a them versus us debate.

George Orwell 1982

The IMF are not all about cuts. They support measures to help grow the economy aswell.

racso1975

They do, but the main emphasis will be reduction of expenditure on all public related service's they were the cut's i was referring too

Permabear

This post has been deleted.

racso1975

Thanks a million for that. Never heard that side of story. Obviously does not sell papers!