Bailout, Lisbon sentiment & future European voting

K-9

jmayo wrote: »

I would not bet on it.
All someone has to do whenever there is another referendum is drag this out and hey presto you will have a willing anti rump vote.
It will be seen as payback time.

True. The No side don't have to be accountable for their claims.

View

kippy wrote: »

Ah no.
Without the banks our interest rates wouldnt stop us from hitting the "normal" markets.
Remember we would need to borrow to fund the fiscal deficit for the next few years anyway, whether that be via this fund or via the markets. The reason we cant hit the markets is because of high rates brought on as a result of massive exposure to dodgy banks.
We've already borrowed shed loads of money to prop up the banks via NAMA and indeed have already raided the NPRF to prop up the banks.
Without the banking issues WE WOULD NOT have required this "bail out". -thats my opinion and am sticking to it.

Well, this is a bit of a chicken and egg discussion but the obvious point in response is - were we in the situation that the state had a large budget surplus, it is reasonable to assume that the financial markets wouldn't have a major problem loaning us the money for the banks, as they could be reasonably confident that they would have it repaid in the short/medium term. As it is, we have a lethal combination of borrowing for our day-to-day expenditure and borrowing for the banks. As such, the state's finances would be in bits even if the banks were okay.

Remember the figures of the bailout are (very roughly) 50 billion to cover the state's expenditure, 10 billion or so for the banks and 25 billion or so as a back-up in case that 10 billion proves inadequate. Based on those figures, the presumption must be that the lenders see our major problem as the state's budgetary problem.

kippy

Its not a chicken and egg situation at all.
It is elephant in the room scenario.

Of course the "markets" believe we cant handle the banking crisis. Its not because of our fiscal deficit either, Even if our fiscal deficit were 0, the banks would suck up billions upon billions of cash (an undefined amount of billions)

The states finances WOULD NOT be in bits if the banks were okay - we wouldnt have an undefineable black hole that could come crying for cash at any stage, that of course would be a major positive.

What we would have is a scenario where we have to continue to cut spending/increase taxation over the coming years. We were doing perfectly well with this (dont get me wrong, am not condoning any steps) however because of the above paragraph we could get hung for a few billion from the banks every few months.

It is not Irelands Fiscal deficit that the EU are worried about. The fiscal deficit is a definable amount which can (to a fair degree) be predicited and planned for. The banking figures cannot as we have so blatantly seen over the past few years.

sensibleken

Lisbon has zero, nada, níl aon rud eile to do with whats going on.

That being said the highest interest rates are being charged by our european 'friends' who stand to make a killing and protect their own shoddy investments. Its like betting on the horse that came last and getting your money back + interest

A partnership does not involve shafting your partner. Did roosevelt shaft churchill? did tango shaft cash? did turner shaft hooch?

I was always very Pro - EU but how i feel now, the EU can go fúck itself.

View

LostinBlanch wrote: »

This "bailout" is going to go directly to shore up the banks in Germany, France and the UK that were shovelling money at Anglo, AIB et al.

We are borrowing 20 billion a year at the moment to fund the gap between the state's income and expenditure. 50 billion of the "bailout" is to fund the state's borrowings. That is the major part of the "bailout" loans.

Going on about the banks in other states doesn't alter that.

PS As an aside, France is one of our smaller creditors. It is 5th and we owe it approx a 1/5 of what we owe the UK and Germany and around 2/3 of what we owe the US (Those are pre-bailout figures admittedly).

View

sensibleken wrote: »

That being said the highest interest rates are being charged by our european 'friends'

as opposed to to our "friends" in "the market" who when they lasted quoted were looking for 9%+.

Still the EU/IMF who'll loan us money at 5.8% must be the baddies...

View

kippy wrote: »

The states finances WOULD NOT be in bits if the banks were okay - we wouldnt have an undefineable black hole that could come crying for cash at any stage, that of course would be a major positive.

Read the budgetary figures - the state's finances went off a cliff in Summer 2007. That was over a year before the banks had their crisis. We have borrowed massively ever since.

kippy wrote: »

It is not Irelands Fiscal deficit that the EU are worried about. The fiscal deficit is a definable amount which can (to a fair degree) be predicited and planned for. The banking figures cannot as we have so blatantly seen over the past few years.

In effect what you are saying is that when the lenders say there is 10 billion there for the banks (plus 25 as a back-up) and 50 billion for the state's expenditure problems, the lenders are deliberately throwing away their money by spending it in the wrong areas. It is possible but it presumes they are even more stupid than the government...

kippy

View wrote: »

Read the budgetary figures - the state's finances went off a cliff in Summer 2007. That was over a year before the banks had their crisis. We have borrowed massively ever since.



In effect what you are saying is that when the lenders say there is 10 billion there for the banks (plus 25 as a back-up) and 50 billion for the state's expenditure problems, the lenders are deliberately throwing away their money by spending it in the wrong areas. It is possible but it presumes they are even more stupid than the government...

Look at the figures youself.
The reason we are being given up 50 bill for state funding is BECAUSE WE CANNOT GO TO THE MARKETS AS A RESULT OF OUR EXPOSURE TO THE BANKS.
This should cover us until spending is under control.
We are exposed so badly to the banks because of:
1. NAMA - How much has NAMA already borrowed.
2. State ownership of banks. We've pumped an almost unending amount of Billions (borrowed) into the banks already and have no idea how much more is required.

The IMF/EU stupid? I wouldnt even insinuate that......they are all the smartest mofos on the planet.

sensibleken

View wrote: »

as opposed to to our "friends" in "the market" who when they lasted quoted were looking for 9%+.

Still the EU/IMF who'll loan us money at 5.8% must be the baddies...

I know the markets are cúnts too. but they never claimed to be our partners or 'friends'.

We all know that they will be screwed just as much if the banks folded. but they still want to make money on our difficulty and at our expense.

i reiterate. with all due respect to our colleagues Fúck them!

LostinBlanch

View wrote: »

We are borrowing 20 billion a year at the moment to fund the gap between the state's income and expenditure. 50 billion of the "bailout" is to fund the state's borrowings. That is the major part of the "bailout" loans.

Going on about the banks in other states doesn't alter that.

PS As an aside, France is one of our smaller creditors. It is 5th and we owe it approx a 1/5 of what we owe the UK and Germany and around 2/3 of what we owe the US (Those are pre-bailout figures admittedly).

Again, it is our exposure to private bank debt which is stopping us going to market. You of course don't wish to acknowledge this so you keep on repeating the lie that it is because of our current deficit that the markets won't lend to us, instead of them recognising that taking on the bank debts that we cannot hope to repay that is killing us. This is why the markets aren't lending to us.

Still keep peddling the FF line.

I also note you conveniently ignored my invitation to you to explain why it is acceptable for Irish citizens to be sentenced to this unconscionable debt burden which was none of our own making, while future EU members who may find themselves in the same position will be "allowed" to burn the bondholders?

View

kippy wrote: »

Look at the figures youself.

I have looked at the figures. And by that I mean the actual budget, not the headlines figures from newspapers.

kippy wrote: »

The reason we are being given up 50 bill for state funding is BECAUSE WE CANNOT GO TO THE MARKETS AS A RESULT OF OUR EXPOSURE TO THE BANKS.

You seem to be under the impression that I am trying to resolve the banks of blame. I am not.

As I said, if we had a large budget surplus, rather than a massive deficit, there wouldn't be a major problem in getting loans to sort out the banks and to pay them back. As it is, we have two problems which like the chicken and egg are intertwinned and which preclude that option.

kippy wrote: »

The IMF/EU stupid? I wouldnt even insinuate that......they are all the smartest mofos on the planet.

Well if you consider them to be smart, look at their figures - they consider the budget problems to be immediate (but not sole) problem...

View

sensibleken wrote: »

I know the markets are cúnts too. but they never claimed to be our partners or 'friends'.

Our partners just loaned us money when no else would. They were under no legal or other obligation to do so.

If you prefer the alternative of shutting down the health service, just give them a call and say "No Thanks" to the loan.

If you really want, walk through the door marked "EU Exit" and see how much fun it is with no one willing to loan us money, no means of paying for the public services we expect and no access to the EU for our exports.

sensibleken

View wrote: »

Our partners just loaned us money when no else would. They were under no legal or other obligation to do so.

If you prefer the alternative of shutting down the health service, just give them a call and say "No Thanks" to the loan.

If you really want, walk through the door marked "EU Exit" and see how much fun it is with no one willing to loan us money, no means of paying for the public services we expect and no access to the EU for our exports.

and its that take it or leave it attitude thats brings the hostility. they are saving their own skin aswell as ours but it is us paying the bill because they want to make a few quid.

View

LostinBlanch wrote: »

Again, it is our exposure to private bank debt which is stopping us going to market. You of course don't wish to acknowledge this so you keep on repeating the lie that it is because of our current deficit that the markets won't lend to us, instead of them recognising that taking on the bank debts that we cannot hope to repay that is killing us. This is why the markets aren't lending to us.

As I said, the two problems are intertwined. I realise it is simpler to ignore the large problem wrt to the budget but, unfortunately, it does have to be faced up to.

LostinBlanch wrote: »

Still keep peddling the FF line.

You'll find it'll be the line of whoever is in power after FF too.

LostinBlanch wrote: »

I also note you conveniently ignored my invitation to you to explain why it is acceptable for Irish citizens to be sentenced to this unconscionable debt burden which was none of our own making, while future EU members who may find themselves in the same position will be "allowed" to burn the bondholders?

The debt burden occurred because we voted for governments who pumped up the property market with massive property tax-breaks and failed to regulate our banks.

You are free to point out when, in the last 13 years, a majority of the electorate voted against those policies. Or, perhaps, when we held mass protest marches against them...

View

sensibleken wrote: »

and its that take it or leave it attitude thats brings the hostility. they are saving their own skin aswell as ours but it is us paying the bill because they want to make a few quid.

It is take it - as in take the loan package - or leave it - and go to the markets and see how "friendly" they'll be to us.

The other member states will have to borrow money on the markets to provide us with those loans. Do you really think they can't think of anything to do domestically with such loans other than to loan it to us?

namloc1980

Cavehill Red wrote: »

Yes, let's be 100% clear here. Angela Merkel has proposed using exactly this mechanism to introduce and enforce automatic sanctions for failing to meet deficit targets.
You need to read the treaty again, especially article 48. It is self-amending, and it can apply to whatever the f uck they want it to apply to.

You might please quote the passage from Article 48 that allows 'them' to apply it to "whatever the f uck they want it to apply to".

LostinBlanch

Double post, see below.

LostinBlanch

View wrote: »

A

The debt burden occurred because we voted for governments who pumped up the property market with massive property tax-breaks and failed to regulate our banks.

You are free to point out when, in the last 13 years, a majority of the electorate voted against those policies. Or, perhaps, when we held mass protest marches against them...

Once again you try to sidestep my question why it is acceptable for Irish citizens to be burned to save bondholders while in similar situations in future other EU citizens will be saved by burning bondholders.

PS I don't recall anyone voting to take on the debts of any banks. All I can remember is Bertie telling those who warned against govt economic policies to commit suicide, or be drowned out by Cowen continually yelling The fundamentals of the economy are sound.

So once again please tell me why it is acceptable that Irish citizens are burned to save bondholders, while other EU citizens who may be in similar situations in the future will be protected by burning bondholders?

View

LostinBlanch wrote: »

Once again you try to sidestep my question why it is acceptable for Irish citizens to be burned to save bondholders while in similar situations in future other EU citizens will be saved by burning bondholders.

Take it up with the Government - it was their decision that should be the case.

LostinBlanch wrote: »

PS I don't recall anyone voting to take on the debts of any banks.

Try looking at the voting record of the Oireachtas. From what I remember all the political parties - bar Labour - voted in favour of the bank guarantees, thus setting us off down this path. Labour got little thanks for their stance at the time from the public, if I recall correctly.

LostinBlanch wrote: »

All I can remember is Bertie telling those who warned against govt economic policies to commit suicide, or be drowned out by Cowen continually yelling The fundamentals of the economy are sound.

And the electorate voted for more prudent policies when exactly?

Do you think people missed that property prices were going up at double digit figures evey year? Or that benchmarking was paid out with large pay-rises in the midst of the post dot-com bust? Or that our Hospital Consultants were turning down 250K pay packages and describing them as "insulting" (and the HSE was rolling over in response)? And all that, before you start looking at the economic statistics where our inflation rate - year after year - was way in excess of the Eurozone average?

LostinBlanch wrote: »

So once again please tell me why it is acceptable that Irish citizens are burned to save bondholders, while other EU citizens who may be in similar situations in the future will be protected by burning bondholders?

As I said before, take it up with the government. They have already negotiated write downs with the subordinate bond-holders if I recall correctly. At a guess, they presumably believe that the disadvantages of write downs for senior bond-holders out-weigh the advantages of doing so.

Given that we needed to borrow to fund the state's day-to-day expenses, they might have thought it would be hard to tell the bond-holders to get lost one minute and then ask them for a loan the next minute...

Noreen1

View wrote: »

Take it up with the Government - it was their decision that should be the case.



Try looking at the voting record of the Oireachtas. From what I remember all the political parties - bar Labour - voted in favour of the bank guarantees, thus setting us off down this path. Labour got little thanks for their stance at the time from the public, if I recall correctly.



And the electorate voted for more prudent policies when exactly?

Do you think people missed that property prices were going up at double digit figures evey year? Or that benchmarking was paid out with large pay-rises in the midst of the post dot-com bust? Or that our Hospital Consultants were turning down 250K pay packages and describing them as "insulting" (and the HSE was rolling over in response)? And all that, before you start looking at the economic statistics where our inflation rate - year after year - was way in excess of the Eurozone average?



As I said before, take it up with the government. They have already negotiated write downs with the subordinate bond-holders if I recall correctly. At a guess, they presumably believe that the disadvantages of write downs for senior bond-holders out-weigh the advantages of doing so.

Given that we needed to borrow to fund the state's day-to-day expenses, they might have thought it would be hard to tell the bond-holders to get lost one minute and then ask them for a loan the next minute...

View, I can see your point , to a certain extent.
However, the electorate could not possibly have foreseen that our Finance Minister would guarantee senior bondholders.

Nor is it reasonable to expect the electorate as a whole to understand economics - nor should they have to.
Our TDs and senior civil servants get paid to do that, after all!

Oh, and , this particular member of the public approved very heartily of Labour voting against the general consensus to guarantee the Bondholders - while Lenihan was crowing about "the cheapest bank bailout in history"
As did everyone I spoke to about it.

Don't believe all the media spin about public opinion - the media have their own agenda.

Noreen

K-9

Noreen1 wrote: »

View, I can see your point , to a certain extent.
However, the electorate could not possibly have foreseen that our Finance Minister would guarantee senior bondholders.

Nor is it reasonable to expect the electorate as a whole to understand economics - nor should they have to.
Our TDs and senior civil servants get paid to do that, after all!

Oh, and , this particular member of the public approved very heartily of Labour voting against the general consensus to guarantee the Bondholders - while Lenihan was crowing about "the cheapest bank bailout in history"
As did everyone I spoke to about it.

Don't believe all the media spin about public opinion - the media have their own agenda.

Noreen

Indeed, even "economists" like McWilliams thought it was a great idea to guarantee deposits and creditors:

Sunday Business Post | Irish Business News

View

Noreen1 wrote: »

View, I can see your point , to a certain extent.
However, the electorate could not possibly have foreseen that our Finance Minister would guarantee senior bondholders.

This isn't the first bailout of banks that the state has done. AIB was bailed out previously by the tax-payer - at a time when it was literally bigger than the state! Past performance is sometimes an indicator of future performance.

Noreen1 wrote: »

Nor is it reasonable to expect the electorate as a whole to understand economics - nor should they have to.
Our TDs and senior civil servants get paid to do that, after all!

Well, there is a saying that a state is just an economy with a flag stuck on it. An exaggeration to be sure but not all that much of one.

There is a bit of a contradiction though - if it is unreasonable for the electorate to understand basic economics during good times when the foundations for this fiscal disaster were being laid, then - during bad times - when the bill comes due, it is unreasonable to assume the electorate can second guess the government's decision on bailing-out the banks.

Personally, I don't subscribe to that view - it is our responsibility to chose our governments wisely and, when doing so, to be cautious of their economic policies (particularly when times are good).

After all, in a democracy, people get the politicians they deserve.

fontanalis

LostinBlanch wrote: »

Again, it is our exposure to private bank debt which is stopping us going to market. You of course don't wish to acknowledge this so you keep on repeating the lie that it is because of our current deficit that the markets won't lend to us, instead of them recognising that taking on the bank debts that we cannot hope to repay that is killing us. This is why the markets aren't lending to us.

Still keep peddling the FF line.

I also note you conveniently ignored my invitation to you to explain why it is acceptable for Irish citizens to be sentenced to this unconscionable debt burden which was none of our own making, while future EU members who may find themselves in the same position will be "allowed" to burn the bondholders?

Was that decision not made two years ago by elected officials?

fontanalis

K-9 wrote: »

Indeed, even "economists" like McWilliams thought it was a great idea to guarantee deposits and creditors:

Sunday Business Post | Irish Business News

He said that shareholders should take the hit, if he includes bondholders in that then he's right.

K-9

fontanalis wrote: »

He said that shareholders should take the hit, if he includes bondholders in that then he's right.

Nope, bond holders are creditors, they don't hold shares.

The only option is to guarantee 100 per cent of all depositors/creditors in the Irish banking system. This guarantee does not extend to shareholders who will have to live with the losses they have suffered. However, it applies to everyone else.