Could you default and still get a bailout from the IMF

wylo

Ok the word of the week seems to be default, im sure itll be something else next week, but my question , would it be possible to default on the bank debt and the bond holders. We would then have our sovereign debt and ask for a bailout from the IMF?
It would probably mean leaving the eurozone and taking a small loan to 'tie us over' until we make absolutely drastic changes to our finances.
Im talking a bailout of something in the order of 25 billion so we don't get completely screwed.
On the short term life would change drastically in Ireland for the Public Service and unemployed , we'd also still have debt but a manageable debt?
In the medium term we could actually start growing as a country again.

Am I missing something obvious here?
What would happen to peoples savings?

gollem_1975

wylo wrote: »

Ok the word of the week seems to be default, im sure itll be something else next week, but my question , would it be possible to default on the bank debt and the bond holders. We would then have our sovereign debt and ask for a bailout from the IMF?
It would probably mean leaving the eurozone and taking a small loan to 'tie us over' until we make absolutely drastic changes to our finances.
Im talking a bailout of something in the order of 25 billion so we don't get completely screwed.
On the short term life would change drastically in Ireland for the Public Service and unemployed , we'd also still have debt but a manageable debt?
In the medium term we could actually start growing as a country again.

Am I missing something obvious here?
What would happen to peoples savings?

well I doubt anyone from the IMF is lurking/posting here so we'd really be speculating as to what would happen.

personally speaking I think taking an IMF/ECB loan at a better rate than we'd get on the markets is the way to go.

the bondholders/bank debt doesn't have to be paid off tommorow.. a new government can decide at a time in the future what we do with those guys.. the prevailing mood across Europe might change to one that sees the bondholders taking some kind of a haircut in the future.

on the otherhand I don't know ( and I suspect know one outside of the negotiations know ) if the bailout is conditional on said bondholders being paid back.

lads if some of our countrymen are suggesting we default anyway, why not wait until we get the 85billion too! serious question ?

Dotsie~tmp

If we got the bank debt off our back would we even need a default? Have you thought about that.

wylo

gollem_1975 wrote: »

lads if some of our countrymen are suggesting we default anyway, why not wait until we get the 85billion too! serious question ?

I think the argument is that it would make our economy completely stagnant, we'd be spending all our money on debt and would have little room for a fresh start.

Nody

The moment even a slimmer of a rumour gets out of ANY country leaving the eurozone expects a capital flight from said country and banks; this would also competly shut down company loans etc. as they would not get any credits based on anything in Ireland and the banks would for all intent and purpose be dead in the water.

Most likely to be hit by such a run? Not the rich; they are already out by the time; not the poor, for them it makes slim difference no the once hit will be the middle class. The people working today and anyone with a loan sold on etc.

The day the new punt is released / existing currency is converted it will devalue at least 30% (and that is being generous) if does not have a locked exchange rate (and if not what's the point of changing currency? All you do is a hair cut). If the government is in strong control (yea, that one is about as likely as FF getting a majority in next election) it can slowly claw it back over the next decade. If they are the usual morons and print out more money (since they can now do it) the value will continue to go down devaluing the earnings and savings of anyone who was prudent.