Why wouldnt this work?

zig

Ive often advocated a default but the biggest argument I come across is that we would have ALL our cuts in an instance. Im just wondering what people think of this suggestion. It basically consists of a default, , where we could stick to our 5 year plan but we would be free of most debt giving us an opportunity to actually grow.

1/ Tear up that deal made on Sunday.
2/ Tell ECB and bondholders 'Im sorry but were broke , we cant pay you back
3/ Ask the IMF for 40 Billion loan over 10 years, we dont even mind if the interest is as high as the previous deal, 5.8% or whatever, abide by what the IMF suggests in terms of cuts.
4/ Make a 5 year plan to make our deficit 0%, keeping in mind we'll have a small bit more change to our name due to not having heavy debts + interest sucking money out of our exchequer.
5/ 5 years later, if everything is going well , (big if), all were left with is our sovereign debt + 20 billion for the IMF. Markets may or may not be open to us but that shouldnt matter, we should be relying on our exchequer surplus not the markets.

I means we will all live within our means but there will be one important thing the country will have , and thats freedom and the opportunity to actually grow again.
And dont forget this plan doesnt even take into account or Pension fund and the cash we have till mid next year.

aidan_walsh

What I read:

Collect underpants.
???
Profit.

ixtlan

Of the bailout, 50 billion is required internally to get us to only borrowing 3% by 2014, and most people think that's overoptimistic. 3% is still 4-5 billion a year.

So your plan would require even more drastic measures than we currently expect. Plus you will be doing it in a state where banks will be (if they still exist in some form at all) unable to lend money in any sort of normal way.

The IMF is unlikely to agree to a 10 year term for money, and they certainly will not provide 40 billion to us. Their total balance is I believe 200 billion. They are not going to give 20% of the total to us. They need the EU to provide most of the money in the current plan. And of course their current "investment" is predicated on us being an integral part of the EU. If we say we are cutting ourselves off financially they are not going to look favourably on us. What's to stop us doing the same to them if by some miracle we did get the deficit to zero.

As regards freedom and opportunity to grow again, do you think people will be falling over themselves to invest in such a state? Membership in the Euro will be unlikely, membership in the EU will be questioned. Years of instability ahead. Go read some of the Internet discussions of people already moving their small savings overseas, and that is with the ECB behind the banks.


Ix.

Slozer

zig wrote: »

2/ Tell ECB and bondholders 'Im sorry but were broke , we cant pay you back
3/ Ask the IMF for 40 Billion loan over 10 years, we dont even mind if the interest is as high as the previous deal, 5.8% or whatever, abide by what the IMF suggests in terms of cuts.

I do not think if we default and then go looking for a loan we would get it that easy

Heres a better plan.

1. Get the 85 billion loan.
2. Use it to buy gold.
3. Declare we are leaving the Euro.
4. Create our own currency (Puntu) and tie it to the gold standard.
5. Euro currency collapses and we owe nothing.
6. We become the richest nation in Europe.

Problem solved.

ei.sdraob

Slozer wrote: »

1. Get the 85 billion loan.
2. Use it to buy gold.
3. Declare we are leaving the Euro.
4. Create our own currency (Puntu) and tie it to the gold standard.
5. Euro currency collapses and we owe nothing.
6. We become the richest nation in Europe.

7. NATO parks an aircraft carrier (or more) in Dublin bay since we would overnight find ourselves to be a "roque state" among the "axis of evil"

zig

aidan_walsh wrote: »

What I read:

Collect underpants.
???
Profit.

doesnt sound far off the plan we already have in place so!
But anyway I take the points above, I wasnt sure what kind of balance the IMF were working off, and 40B sounds like way too much.
Carry on...

View

ei.sdraob wrote: »

7. NATO parks an aircraft carrier (or more) in Dublin bay since we would overnight find ourselves to be a "roque state" among the "axis of evil"

And let's not forget that the US is our third biggest creditor, and they have a LOT of aircraft carriers...

whatstherush

Also where do you go to borrow, to roll over the existing debt that mature's in the next 5 years