Bailout Referendum, what way would you vote?

View

ei.sdraob wrote: »

...while ensuring that people are living anywhere near the standards of last 10 years?

These are the "standards of the last 10 years" that were hugely artificially inflated by our property bubble? If so, the answer is simple - indeed you have basically advocated it yourself.

The standards will not be maintained at the standards of the last 10 years or anywhere close to them either.

ei.sdraob

View wrote: »

These are the "standards of the last 10 years" that were hugely artificially inflated by our property bubble? If so, the answer is simple - indeed you have basically advocated it yourself.

The standards will not be maintained at the standards of the last 10 years or anywhere close to them either.

Unlike SF+ULA I do not advocate attempting to maintain (or increase for that matter) high public expenditure and welfare, beggars cant be choosers.

later12

ei.sdraob wrote: »

Well ye wanted figures as to why default is inevitable

There is a big difference between demonstrating that the debt is unsustainable and supposedly proving that default is inevitable.

There are more ways to approach the crisis that simplistically resorting to a default. One method could be in the establishment of a European debt agency or the future ESF, and European sovereign bonds.

Personally I think a restructuring of Irish debt is inevitable, but that would likely be on a Brady bond model with progressive writing down of principals as opposed to simple or unilateral default. So nobody has proven default is inevitable; nor, realistically, can that be proven.

View

ei.sdraob wrote: »

Unlike SF I do not advocate attempting to maintain high public expenditure and welfare, beggars cant be choosers.

I know that from having read your posts. I also suspect that politicians know it too. I suspect that FF initially hoped the global economy would have bounced back by now thus boosting the "Income" side of the state's budget ledger, thus minimising the needed cuts. The new government probably will (or at least should) take tough action soon - politicians lose votes every time they make cuts, so they might as well get it over with asap, hope that it works and that global recovery materialises before they have to face the electorate again.

ei.sdraob

later10 wrote: »

There is a big difference between demonstrating that the debt is unsustainable and supposedly proving that default is inevitable.

There are more ways to approach the crisis that simplistically resorting to a default. One method could be in the establishment of a European debt agency or the future ESF, and European sovereign bonds.

Personally I think a restructuring of Irish debt is inevitable, but that would likely be on a Brady bond model with progressive writing down of principals as opposed to simple or unilateral default. So nobody has proven default is inevitable; nor, realistically, can that be proven.

Agree default could very well endup being a restructuring with % writedowns etc
I am sure they will come up with a euphemism to make it sound anything but "default"
EU bonds could be possible, not sure how it help existing debt...


The country is now like a family with a mortgage they cant afford, a mortgage which they signed in a moment of madness and kept extending, on a house which is not worth anywhere near what it was. The banks will try everything such as extending the period and selling more debt to the family

View wrote: »

I know that from having read your posts. I also suspect that politicians know it too. I suspect that FF initially hoped the global economy would have bounced back by now thus boosting the "Income" side of the state's budget ledger, thus minimising the needed cuts..

Yeh they did, also setup "can down the road kicking" structures such as NAMA
exports did hold up but unfortunately they alone wont help us

View wrote: »

The new government probably will (or at least should) take tough action soon - politicians lose votes every time they make cuts, so they might as well get it over with asap, hope that it works and that global recovery materialises before they have to face the electorate again.

Yeh the Con/LibDem strategy that was employed in UK, lets hope it works

SkepticOne

later10 wrote: »

There is a big difference between demonstrating that the debt is unsustainable and supposedly proving that default is inevitable.

There are more ways to approach the crisis that simplistically resorting to a default. One method could be in the establishment of a European debt agency or the future ESF, and European sovereign bonds.

I don't think that anyone who argues that default is inevitable means that it is inevitable regardless of whatever external measures are brought to bear. What they mean is that some sort of default is inevitable if things are left as they are. Obviously default can be averted given the appropriate intervention. The only thing that logically can be proven is that the debt is unsustainable as things stand. It is not reasonable to expect more than that.

K-9

ei.sdraob wrote: »

Once again the population now unlike the 80s will not be able to afford similar rises in taxes, we already have interest rates on mortgages rising into double digits and inflation rising (energy, education, healthcare continued to inflate in last few years despite everything else deflating)

At some stage there wont be enough money left after debt repayments for bread and circuses then the fun will begin

Interest rates went as high as 14-15% around 92/93 so nothing that wasn't around then either. Difference this time is the huge amount of debt but we wont have those rates to contend with. Affordability wise, there probably isn't that much of a difference.

You have anything on what happens on default? I'm sure you must have researched it.

Scofflaw

A point that seems to be slipping by people is one relating to the comparison of government debt to government revenues.

If you're going to use the "General Government Debt" figure, which includes the debt of semi-states and local government, you shouldn't use the "exchequer revenues" as the basis for the tax comparison, because that represents only central government tax revenues, and doesn't include revenue from PRSI, licence fees, rates, etc.

Exchequer debt should be compared against exchequer revenue, general government debt should be compared against general government revenue. See here, for example.

cordially,
Scofflaw

K-9

Scofflaw wrote: »

A point that seems to be slipping by people is one relating to the comparison of government debt to government revenues.

If you're going to use the "General Government Debt" figure, which includes the debt of semi-states and local government, you shouldn't use the "exchequer revenues" as the basis for the tax comparison, because that represents only central government tax revenues, and doesn't include revenue from PRSI, licence fees, rates, etc.

Exchequer debt should be compared against exchequer revenue, general government debt should be compared against general government revenue. See here, for example.

cordially,
Scofflaw

The only thing I see there, is that the figures up to about 07 would have included Stamp Duties, VAT and Income TAX/PRSI receipts from an inflated construction industry and related services, 20-25% of GDP. These would all distort the tax to GDP/GNI figures.

So, the figures are inflated in that sense and as the piece points out, everybody is committed to no change to Corporation Tax, so we have to make up for that as well.

Yes, GDP has fallen because of the natural correction to GDP and GNI by the crash, but the previous decades %'s included a high share of construction related taxes.

K-9

Looking at the tax to GDP ratio, it seems to have fallen back to 02 ratios in 09 and the tax to GNI level is around 2001 levels.

So maybe we are back to those levels, unless I'm missing something?

Scofflaw

K-9 wrote: »

The only thing I see there, is that the figures up to about 07 would have included Stamp Duties, VAT and Income TAX/PRSI receipts from an inflated construction industry and related services, 20-25% of GDP. These would all distort the tax to GDP/GNI figures.

So, the figures are inflated in that sense and as the piece points out, everybody is committed to no change to Corporation Tax, so we have to make up for that as well.

Yes, GDP has fallen because of the natural correction to GDP and GNI by the crash, but the previous decades %'s included a high share of construction related taxes.

Part of what Coffey points out there is that general government revenues, as measured by the same Eurostat base as general government debt, are closer to €54bn than the €35bn or so generally cited as Ireland's tax base, once you include PRSI etc.

Since people are using the general government debt figure for calculation of how much of our tax take would be spent on debt servicing, it seems appropriate to use the matching general government revenue rather than the smaller exchequer figure.

cordially,
Scofflaw

K-9

I seen your point, I suppose I was wondering where these extra tax revenues are going to come from?

I think Finfacts used those figures before and it surprised me that we weren't that behind the EU average as I thought.

I'm not sure how the Social Charge is classified but I'd view it as PRSI. That figure should rise slightly as it's 11% combined, compared to 10% with the Income levy and PRSI, plus the USC kicks in at a much lower level.

Did the coalition go with a standard VAT rise to 23% but cut the lower rate?

Scofflaw

K-9 wrote: »

I seen your point, I suppose I was wondering where these extra tax revenues are going to come from?

I think Finfacts used those figures before and it surprised me that we weren't that behind the EU average as I thought.

I'm not sure how the Social Charge is classified but I'd view it as PRSI. That figure should rise slightly as it's 11% combined, compared to 10% with the Income levy and PRSI, plus the USC kicks in at a much lower level.

Did the coalition go with a standard VAT rise to 23% but cut the lower rate?

I think so - the lower VAT rate applies to energy costs and in a few other places.

As to where the extra taxes come from - it's going to have to be income taxes, really. A lot of people are outside the income tax net entirely. Mind you, so are a lot of companies outside the CT net, because they're not currently profitable.

cordially,
Scofflaw

BluntGuy

niall111 wrote: »

If only 100,000 people or 20% took part in this protest each not paying €700pm that would be €70,000,000 per month not going into the Banks and staying in our economy.

It would also be a further 70 million euro in losses that the taxpayer would ultimately have to cover under the current arrangement. While I understand the sentiment, I fail to see how deliberately increasing the problem of mortgage repayments not coming through aids the present situation or would indeed "put more teachers in schools or take prople off trollies in Hospitals".

johnnyskeleton

Jackovarian wrote: »

I'd like to put a poll on this to see how people would vote if we actually had a choice on the bailout. But I dont know how to create a poll, so...

How would you vote?

Time and time again people confuse the cure with the cause.

If it was a vote on the bailout of the banks I would vote no.

However, if we have no choice in the banks and it is a vote on the bailout of Ireland I would probably vote yes. The only caveat is that I suspect we are going to default anyway so why not default sooner rather than later?

SkepticOne

johnnyskeleton wrote: »

Time and time again people confuse the cure with the cause.

If it was a vote on the bailout of the banks I would vote no.

However, if we have no choice in the banks and it is a vote on the bailout of Ireland I would probably vote yes. The only caveat is that I suspect we are going to default anyway so why not default sooner rather than later?

You don't get that choice!

The deal that results in a bailout of Ireland contains a stipulation that we continue to bail out the banks. 35 billion (10 billion up front + 25 billion on a contingency basis) must be put into the banks. We have no choice in this. Should it be calculated by our EU partners that the full 35 billion will be required by the banks then Ireland must put that into the banks.

When you consider that the actual loan is only 67.5 billion you can see that from the EU point of view, the deal is mainly about the banks.

Note that I'm deliberately leaving out the often quoted 85 billion figure as this is a fabricated number involving money that Ireland raised prior to the deal. If you consider the complete bailout "package" to include money Ireland already has then the figures can be massaged in such a way as to make the bank portion of the bailout seem less. Most people see through this tactic except one or two here on boards.

K-9

@SkepticOne, a responsible lender will want you to declare your assets.

I suppose we could have insisted on keeping the NPRF and other money but sure we'd have had to borrow more then.

I think some people are thinking about Irish lending standards from the last decade, we all know where that got us!

Scofflaw

SkepticOne wrote: »

You don't get that choice!

The deal that results in a bailout of Ireland contains a stipulation that we continue to bail out the banks. 35 billion (10 billion up front + 25 billion on a contingency basis) must be put into the banks. We have no choice in this. Should it be calculated by our EU partners that the full 35 billion will be required by the banks then Ireland must put that into the banks.

When you consider that the actual loan is only 67.5 billion you can see that from the EU point of view, the deal is mainly about the banks.

Note that I'm deliberately leaving out the often quoted 85 billion figure as this is a fabricated number involving money that Ireland raised prior to the deal. If you consider the complete bailout "package" to include money Ireland already has then the figures can be massaged in such a way as to make the bank portion of the bailout seem less. Most people see through this tactic except one or two here on boards.

And as has been pointed out to you what now must be dozens of times, the €10bn destined for the banks on an immediate put in basis comes from the same money you're leaving out because it was "already raised". Yet you then count it against the loan, although it's not part of it.

Seriously, this has gone beyond a joke, or a simple error in arithmetic. Stop lying about the figures - it's not tolerable behaviour.

moderately,
Scofflaw

SkepticOne

K-9 wrote: »

@SkepticOne, a responsible lender will want you to declare your assets.

I suppose we could have insisted on keeping the NPRF and other money but sure we'd have had to borrow more then.

I think some people are thinking about Irish lending standards from the last decade, we all know where that got us!

Yes, certainly the lender is entitled to know the value of our assets, but the point is that whatever we have committed to the banks should not simply be added on to the 67.5 billion package in order to make up some arbitrary figure of 85 billion. I think you will agree that doing so is a bit dodgy.

The point I'm making to johnnyskeleton is that under the current deal we get some money for public spending but 35 billion must be be committed to the banks should they require it. This means that if johnnyskeleton votes no to bailing out the banks he also votes no to the remaining amount (32.5 billion) available for public spending.

Note again that I'm leaving out money that we've already raised and that we would still have if we vote no to the deal.

SkepticOne

Scofflaw wrote: »

And as has been pointed out to you what now must be dozens of times, the €10bn destined for the banks on an immediate put in basis comes from the same money you're leaving out because it was "already raised". Yet you then count it against the loan, although it's not part of it.

Seriously, this has gone beyond a joke, or a simple error in arithmetic. Stop lying about the figures - it's not tolerable behaviour.

moderately,
Scofflaw

You missunderstand the point I'm making. See my response to View.

Let's deal with the facts.

1. The total amount of the loan is 67.5 billion. (not 85 billion).

2. The stipulation is that 10 billion (let us ignore for the moment where the 10 billion comes from) goes into the banks immediately and a further 25 billion as and when they require it (i.e. on a contingency basis).

I think most people can agree on both of these points.

Now here's the bit I disagree with and I think with some justification: what I disagree with is that 17.5 billion of money Ireland has already raised is arbitrarily added on the 67.5 billion figure to bring it up to 85 billion.

This I think most people will agree is a bit dodgy.

If we did not agree to the bailout we would still have the 17.5 billion of money we had already raised so it should not be part of the equation. The only reason it would be included is for the purposes of spin: percentage-wise it makes it appear as if the bailout is about public spending than about the banks.

Now let us return to the 10 billion and where it comes from. Officially it comes from the dodgy 17 billion figure making up the dodgy 85 billion "package". However if we strictly limit ourselves to actual transfers of money then it doesn't really matter where the 10 billion (or for that matter the total of 35 billion actually comes from).

The key thing is that wherever it comes from, if we want the 67.5 billion loan, we must put 35 billion into the banks. On that basis I take it out of the 67.5 billion since we don't get the 67.5 billion leaving 32.5 billion for spending.

The main point, though, is that we should not be including money Ireland has already raised in our calculations when discussing the pros and cons of the deal.

K-9

SkepticOne wrote: »

Yes, certainly the lender is entitled to know the value of our assets, but the point is that whatever we have committed to the banks should not simply be added on to the 67.5 billion package in order to make up some arbitrary figure of 85 billion. I think you will agree that doing so is a bit dodgy.

The point I'm making to johnnyskeleton is that under the current deal we get some money for public spending but 35 billion must be be committed to the banks should they require it. This means that if johnnyskeleton votes no to bailing out the banks he also votes no to the remaining amount (32.5 billion) available for public spending.

Note again that I'm leaving out money that we've already raised and that we would still have if we vote no to the deal.

Yes, but if we had said, don't touch the NPRF the €35 Billion for the banks would still have to be raised.

The NPRF was just a way to finance it. Don't touch the NPRF, the €35 Billion still needs to be raised. The NPRF is irrelevant. We probably will need the €35 Billion so if we had ring fenced the NPRF, we would have had to borrow it, plus the interest rate you and me are giving out about.

I think this is the point posters are trying to make.

SkepticOne

K-9 wrote: »

Yes, but if we had said, don't touch the NPRF the €35 Billion for the banks would still have to be raised.

The NPRF was just a way to finance it. Don't touch the NPRF, the €35 Billion still needs to be raised. The NPRF is irrelevant. We probably will need the €35 Billion so if we had ring fenced the NPRF, we would have had to borrow it, plus the interest rate you and me are giving out about.

I think this is the point posters are trying to make.

Yes, I agree with you here. It doesn't really matter where the 35 billion comes from. This is one of my points to Skofflaw above and I'm glad you think the same way.

Money is money regardless of where it comes from. What counts is how much money and what do we get in return. The answer is that in order to get the 67 billion 35 billion (as you point out, it doesn't really matter from where) needs to be committed to the banks (10 billion up front and 25 billion on an as-needed basis). We choose allocate this money to the 67 billion itself because that deal contains a stipulation regarding 35 billion to the banks. If we want to know what the bailout is really about, that gives us the most accurate picture.

Now go back and read what johnnyskeleton's post (to which I was responding) where he says that he would vote for bailing out Ireland but not bailing out the banks. I think you will agree that this is not an option under the current deal. Bailing out the banks is simply a stipulation of the deal.

Scofflaw

SkepticOne wrote: »

You missunderstand the point I'm making. See my response to View.

Let's deal with the facts.

1. The total amount of the loan is 67.5 billion. (not 85 billion).

2. The stipulation is that 10 billion (let us ignore for the moment where the 10 billion comes from) goes into the banks immediately and a further 25 billion as and when they require it (i.e. on a contingency basis).

I think most people can agree on both of these points.

Now here's the bit I disagree with and I think with some justification: what I disagree with is that 17.5 billion of money Ireland has already raised is arbitrarily added on the 67.5 billion figure to bring it up to 85 billion.

This I think most people will agree is a bit dodgy.

If we did not agree to the bailout we would still have the 17.5 billion of money we had already raised so it should not be part of the equation. The only reason it would be included is for the purposes of spin: percentage-wise it makes it appear as if the bailout is about public spending than about the banks.

Now let us return to the 10 billion and where it comes from. Officially it comes from the dodgy 17 billion figure making up the dodgy 85 billion "package". However if we strictly limit ourselves to actual transfers of money then it doesn't really matter where the 10 billion (or for that matter the total of 35 billion actually comes from).

The key thing is that wherever it comes from, if we want the 67.5 billion loan, we must put 35 billion into the banks. On that basis I take it out of the 67.5 billion since we don't get the 67.5 billion leaving 32.5 billion for spending.

The main point, though, is that we should not be including money Ireland has already raised in our calculations when discussing the pros and cons of the deal.

No, that's entirely wrong. If €10bn earmarked for the banks comes from the NPRF, as it does, then it is quite simply not part of the loan, and you cannot - and, I repeat, must not on these forums - pretend that it is part of the loan, because that is quite simply false.

If you wish to state that our commitment to put the €10bn in is a result of the need for the €67.5bn loan, that's fine. But you may not pretend that it's actually part of the loan in any financial sense as you have been doing, and further claims of that nature will be penalised, because they are in every factual sense entirely false.

Are we clear?

moderately,
Scofflaw

K-9

This is where we go round in circles. It is clear the Irish Government was going down that road anyway.

The total finance is €85 Billion. If we had have ring fenced the €10 Billion and the NPRF for say, the capital budget, we still would have had to come up with the €85 Billion, 35 for the banks and 50 for the budget.

Apples and oranges.

Going on what you are saying, it seems we would have had ended up at the lower figure. That isn't true. We could have withheld the NPRF and the €10 Billion, we just would have had to borrow it at the exorbitant interest rate we are giving out about.

I think you are trying to say we were somehow done on this deal? How so?

SkepticOne

K-9 wrote: »

It is clear the Irish Government was going down that road anyway.

Your other points have already been answered so I'll just deal with this one. If it was the case that all future government were going to behave the same as Fianna Fail in continuing to prop up the banks then there would be no need to make it a stipulation of the deal. The reason it was a stipulation is that neither the lenders nor you can predict what future governments will do. Fine Gael for one had different plans for the banks than the last government.

I agree with your point that in certain respects it doesn't matter where the 10 billion (or the 35 billion come from) and used this in my response to Scofflaw on this thread.

Scofflaw

We are apparently not clear about this. This:

Financially (i.e. in terms of net amounts of money transferred) this is pretty much the same deal. However you can no longer spin the deal as being mainly about public spending since the loan specifically allocated to public spending is now only 32.5 billion.

is a lie. Flat out, no argument, dishonest. There is, quite specifically, €50bn allocated for public spending.

48-hour ban for repeated dishonesty. Post deleted. Let's be really clear - you are not entitled to make up facts.

moderately,
Scofflaw

ei.sdraob

Scofflaw why are you being harsh on ScepticOne ?

we have:
the bailout or "programme" is 85 billion in total with 3 parties involved (us,imf,eu) with us having to spend our money first


straight out of horses mouth

Brian Lenihan wrote:

The external lending being made available amounts to €67½ billion and will be drawn down as required over the three-year period of the Programme. The State’s contribution to the Programme will be €17½ billion,

there would be no "deal" if we didnt spend our share first, hence to exclude it from discussions is bizzare


more from kildarestreet

Brian Lenihan wrote:

The Government agreed on 28 November 2010 to the provision of a €85 billion financial support programme for Ireland in the context of a joint EU-IMF Programme. The State’s contribution to the programme will be €17.5 billion while the external support will amount to €67.5 billion. The external assistance being provided is as follows:
- €22.5 billion from the European Financial Stabilisation Mechanism (EFSM)
- €22.5 billion from the European Financial Stability Facility (EFSF) and bilateral loans from the UK, Sweden and Denmark.
- €22.5 billion from the IMF.
The average interest rate on the €67.5 billion available to be drawn from these three external sources under the EU-IMF programme is 5.82 per cent on the basis of market rates at the time of the agreement. The actual cost will depend on the prevailing market rates at the time of each drawdown. The average life of the borrowings, which will involve a combination of longer and shorter dated maturities, under each of these sources is 7.5 years and the interest rates applying to borrowings from each are set out below based on market rates at the time of the agreement. EFSM The interest rate on the EFSM loan will be 5.7% which is comparable to IMF rates. Under Council Regulation (EC) No. 407/2010 of 10 May 2010 the rate is made up of the cost of borrowing by the European Commission and a margin which is charged to the Member State concerned. The margin which has been agreed for the EFSM loan to Ireland is 2.925% within the overall interest rate of 5.7%. EFSF The interest rate on the EFSF loan is 6.05%. The EFSF borrows on the international capital markets on the strength of guarantees provided by Euro area countries (excluding Ireland and Greece). In order to obtain the top AAA rating from the credit rating agencies it was necessary for the EFSF to put in place certain enhancements in the form of collateral and the cost of these arrangements are reflected in the interest rate charged by EFSF on its lending. IMF The interest rate on the IMF loan is 5.7%. IMF lending is denominated in the Fund’s unit of account, Special Drawing Rights (SDRs). The SDR comprises a basket of four currencies, Euro, Sterling, the US Dollar and Japanese Yen. The IMF’s lending rate is based on the three month floating interest rates for the currencies in the basket. The interest cost on the IMF loans is expressed as the equivalent rate when the funds are fully swapped into fixed rate Euro of 7.5 years duration. This expresses the interest rate in terms which can be compared with the cost of borrowing from EU sources. UK bilateral loan The interest rate on the UK loan is 5.9%. The amount lent to Ireland by the UK will be the sterling equivalent of €3.8bn. The interest rate is based on a 7.5 year period. The rate on each tranche will be a fixed rate, set by adding a fixed margin to the sterling 7.5 year swap rate at the time of disbursement. The interest charge is aligned with international rates and is between the EFSM and EFSF rates. Bilateral loans from Sweden and Denmark Discussions have not yet commenced on the bilateral loans with Sweden and Denmark. It is anticipated that loans will be disbursed in tandem from the EU and IMF. Disbursements of the UK loan which is backloaded will commence following the IMF third review of Ireland’s Memorandum of Understanding in September 2011.
It is important to note that the (blended) interest rate of 5.8% on these loans is at a far lower cost than would be available to Ireland in the financial markets. It is designed to avoid overburdening the Member State concerned or acting as an impediment to economic growth while at the same time providing an incentive to return to the markets. At present the yield on Irish government bonds is over 8% in the secondary markets as compared to the rate of 5.8% at which we will be borrowing under the EU-IMF Programme. We will not be obliged to drawdown any of these loans if there is an opportunity to return to the markets at sustainable rates or we can access funds at lower cost elsewhere.
There have been suggestions made that Ireland is being charged an excessive rate of interest compared to that available to Greece under the Euro Area Loan Facility. This is not correct. The loan facility to Greece is based on three-year loans – those to Ireland on 7.5 years. Moreover, as has widely been reported, the Greek authorities have sought to have their borrowing realigned on similar terms to Ireland’s.
The conditionality attached to drawdown is provided for in the relevant loan agreements which will be laid before the Houses of the Oireachtas. It is not correct to suggest that Ireland will have to pay interest on money before it is drawn down. I might explain, however, that under the terms of the EFSF there is provision for the retention of a loan specific cash buffer in order to underpin the AAA rating attached to EFSF borrowings and there are as normal in such circumstances some transactions costs in this connection, details of which will be set out in the EFSF Loan Facility Agreement.

edwinkane

ei.sdraob wrote: »

Scofflaw why are you being harsh on ScepticOne ?

we have:
the bailout or "programme" is 85 billion in total with 3 parties involved (us,imf,eu) with us having to spend our money first


straight out of horses mouth


there would be no "deal" if we didnt spend our share first, hence to exclude it from discussions is bizzare


more from kildarestreet

It does seem unusual to concentrate on where the money is coming from, rather than on the total amount of the money.

Scofflaw

I don't have any objection to SkepticOne pointing out that the terms of the programme include:

(a) €35bn for the banks between contingency and definite money

(b) €17.5bn contributed from Ireland

What I object to is a bit of juggling that goes like this:

1. there's €35bn in the €85bn programme earmarked for banks

2. subtract the €17.5bn Ireland is contributing

3. -> there's €35bn in the €67.5bn Ireland is borrowing earmarked for the banks, and only €32.5bn for public spending.

That last statement is quite simply false - no pro-rata reduction in the money earmarked for the banks in the overall programme when dealing with the part of that programme that relies on external assistance. SkepticOne does it in order to "prove" that most of the loan is for the banks, but the result is a false statement about the loan facility.

He can either compare the figures for the full program, or he can divvy things up by who is actually providing what - and Ireland is providing the €10bn immediately for the banks out of the NPRF, because that was something already committed to under the 4-year programme before the IMF/EU got involved. He's also welcome to point out that the bank spending is a condition of the loan, and that in order to borrow €67.5bn we've committed to spending €35bn. All of those things are true.

He cannot, however, compare apples and oranges after juggling them as per the above, because it is false to pretend that the arithmetic actually works that way.

cordially,
Scofflaw

edwinkane

Oh that the government had similar constraints!