Are people aware that the IMF doesn't actually...

hatrickpatrick

...force the government, in general, to take specific actions?
The IMF don't actually come in and say "Sell that hospital, introduce this tax, etc". They merely give the government budget targets. It's still up to the government to decide how to achieve those budget targets. In other words, the IMF might say "we want this much raised" or "we want the deficit cut to x%", but whether this is done by taxing, selling assets, cutting spending etc and in what proportions, is more or less entirely up to the government.

As far as I know, the IMF only take a more direct approach if the government's policy utterly fails.

So giving the government a get out of jail free card of "The IMF made us do it" is a bit short sighted. It's still the government's decision how to do it, allowing them to blame the IMF and therefore not holding them accountable for their own policy choices, is daft.

Just throwing that out there...

Daegerty

I think FG were trying to use their nonexistent get out of jail card by blaming the IMF for the property tax which they said they weren't going to introduce before they got elected.

Head The Wall

I don't see the govt raising the 10 bn in taxes in their plan so I bet they will soon be in telling them what to do

dan_d

Yup

I think that FF would have agreed cost-saving measures with the IMF, which were then passed on to FG to implement. FG have since changed some of the details slightly. But as far as I understand, most of what's happening was thought up by FF, agreed to by the IMF (with some changes maybe?) and is now being implemented by FG.

The problem for FG is that they promised to do/not do certain things during their election campaign, and now that they are in office, they may find that they have no option but to do some of those things, because there's simply no other way to find money.

The problem Irish people have is that they just want this all sorted, but in a "not in my back yard" kind of way - any solution but not the ones that will affect them. The point most people seem to miss is that we have a massive deficit that needs to be got rid of. With or without the bailout, that would have to be eliminated. And the only way to do that is to raise taxes, etc.etc. I don't necessarily agree with how they're going about doing it, in terms of water charges (only if ringfenced), house charges (very unfair on many levels) and so on - my opinion would be that taxes should just be pushed up a couple of percent, and that very, very serious and in-depth reform of the PS should take place before anything else...but I do see that there's no other way to go about doing this.

Bullseye1

You do realise that if we do not take on board their wishes we do not get money to run the government as wages and general running cost of the public sector outweighs tax and vat intake. We have a choice to either accept the IMF plan and reduce the deficit or we say go to hell and find we don't have money to pay the doctor, teacher, Garda etc.

Nijmegen

The Four Year Plan is an Irish plan. If there needs to be a revised plan, it will be an Irish plan, unless the Irish fail to deliver a credible plan.

I daresay the IMF has no interest in whether or not we cut SNA's or forcibly remove permanent jobs in the Public Service. It's an Irish political calculation as to what we're cutting, and so long as we remain inside the parameters the IMF couldn't give a hoot if we protect civil service jobs or turned the whole thing inside out.

pog it

As far as I know the IMF did make recommendations on how to achieve those budget targets. Does anyone have the link to the IMF document?

Scofflaw

pog it wrote: »

As far as I know the IMF did make recommendations on how to achieve those budget targets. Does anyone have the link to the IMF document?

The recommendations in it pretty much all come from the Four Year Plan, though, and anything else in it was negotiated with the government.

The IMF says "you need to reach these targets, how are you going to do it?", and the government makes proposals. Only if the IMF viewed the proposals as unworkable would they be rejected.

cordially,
Scofflaw

Will_H

pog it wrote: »

As far as I know the IMF did make recommendations on how to achieve those budget targets. Does anyone have the link to the IMF document?

Here you go:

Ireland: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding
http://www.imf.org/external/np/loi/2010/irl/120310.pdf

Ireland: Extended Arrangement—Interim Review Under the Emergency Financing Mechanism
http://www.imf.org/external/pubs/ft/scr/2011/cr1147.pdf

later12

The IMF has a particular economic philosophy that can be narrowed down to a fairly well defined range. The thing about Ireland is that our economic philosophy is very similar, or very compatible, with that of the IMF. It is not the case that the IMF go into a country and only look at figures. Strategy is very much a part of their programmes, they do lay down economic policy conditions - their best known conditions are in the area of structural adjustment (deregulation of industries, privatization, competition...).

The difference is that in our case (unlike Greece and Portugal) Irish economic policymakers already have the same liberal mindset as the IMF. But it is not true to say that the IMF do not lay down policy terms as part of their assistance programmes.

Godge

later10 wrote: »

The IMF has a particular economic philosophy that can be narrowed down to a fairly well defined range. The thing about Ireland is that our economic philosophy is very similar, or very compatible, with that of the IMF. It is not the case that the IMF go into a country and only look at figures. Strategy is very much a part of their programmes, they do lay down economic policy conditions - their best known conditions are in the area of structural adjustment (deregulation of industries, privatization, competition...).

The difference is that in our case (unlike Greece and Portugal) Irish economic policymakers already have the same liberal mindset as the IMF. But it is not true to say that the IMF do not lay down policy terms as part of their assistance programmes.

Correct, and I am very interested to see how the Government tackles the cartels - pharmacists, doctors, dentists, lawyers, accountants, etc. that are the IMF's normal targets.

View

later10 wrote: »

The IMF has a particular economic philosophy that can be narrowed down to a fairly well defined range. The thing about Ireland is that our economic philosophy is very similar, or very compatible, with that of the IMF. It is not the case that the IMF go into a country and only look at figures. Strategy is very much a part of their programmes, they do lay down economic policy conditions - their best known conditions are in the area of structural adjustment (deregulation of industries, privatization, competition...).

The difference is that in our case (unlike Greece and Portugal) Irish economic policymakers already have the same liberal mindset as the IMF. But it is not true to say that the IMF do not lay down policy terms as part of their assistance programmes.

Both Greece and Portugal have agreed to privatizations as part of their IMF packages, I believe.

What did Ireland agree to privatise as part of its programme? Indeed, did we even agree to measures to deregulate industries and encourage competition?

Ireland's "liberal mindset" seems to have largely consisted of soundbites about "We're Boston not Berlin" while ignoring that both Boston and Berlin pay higher taxes than we do (never mind that "Boston" charges higher corporate taxes than "Berlin").

The evidence of a liberal mindset here is lacking when it comes to privatisations (was Eircom 10 years ago the last?), deregulating industries (taxis maybe 10 years ago?) and "encouraging competition" seems to have largely amounted to not checking what the banks were up to when we should have.

later12

I'm not sure if you're misreading the post or what. Ireland has been a lot more economically liberal than Greece. We do not have the massive need for privatisation that they have - Greece has a privatisation potential of €300bn, the review group of Irish state assets sees a realisation potential of €5 billion. We are just not as socialist as they are in terms of economic policy.

Greece ranks 30 in the ease of doing business survey, Portugal ranks 20, but Ireland ranks 7. In terms of the ease of starting up a business, Greece ranks 30, Portugal ranks 17, but Ireland ranks 5.

In terms of tax compliance, Greece ranks 20, Portugal ranks 19, but Ireland ranks #1.

It is fair to say that whilst not exactly in love with capitalism, warts and all, Ireland is more economically liberal than Greece or Portugal. And it is fair to say that, bar changing its mind on capital controls, the IMF is economically liberal too. Therefore it is of no major surprise that the Irish negotiations with the IMF were somewhat more harmonious than they might have been in Portugal or Greece. We would be closer to them on the policy chart than would our Club Med cousins.

View

later10 wrote: »

I'm not sure if you're misreading the post or what. Ireland has been a lot more economically liberal than Greece. We do not have the massive need for privatisation that they have - Greece has a privatisation potential of €300m, the review group of Irish state assets sees a realisation potential of €5 billion. We are just not as socialist as they are in terms of economic policy.

The issue of privatisation doesn't just boil down to "How much cash can we raise by doing so?" (although that is an important issue obviously). It also involves asking whether the state should be involved in owning/competing in the relevant business at all.

If we compare ourselves with the economies that are performing well (i.e. not Greece!), many of them have engaged in the whole-scale privatisation of former semi-states over the last decade or two, whereas we largely haven't. For instance, the state here is still involved in the ownership/provision of electricity, water, post and transport - all of which is inevitably going to influence how the state regulates those industries.

One of the last major political discussions here around deregulating an industry and/or possible privatisation (at some distant future date) was the late Seamus Brennan's idea of opening the Dublin Bus market up to competition. That was a decade ago and, offhand, I can't recall any comparable political discussion (never mind action) since.

As such, it would appear that we aren't going to do much, if any, privatisation, deregulation and encouraging competition as part of our IMF programme.

Indeed, should the Greeks and Portugese follow their IMF programmes, then, even though they start "behind" us today, they could well easily "pass us out" in future and end up closer to the IMF's position on the policy chart (i.e. more economically liberal) than us.

later12

Ok, I am not really sure what the reason for the focus on privatisation is. We do not have a need for privatisation like the Greeks and Portuguese because it has never been in our recent economic policy to bloat the semi states in the same way as has happened in those jurisdictions. Even considering that, there is more to economic liberalism than simply privatisation, and I have already pointed out the ease of doing business in Ireland as compared to the more socialist member states.

My point is simply that Ireland is more liberal, economically, than Portugal or Greeces. As such our philosophy is more in harmony with the IMF than would the governments of these states. I dont really see this as a controversial issue, tbh.

I didnt say Greece and Portugal could never surpass Ireland in the capitalist stakes, nor is the argument that Ireland is the father and mother of capitalism. I fail to see what exactly it is you are disagreeing with here, quite frankly. Perhaps you might clarify.

kellso81

Godge wrote: »

Correct, and I am very interested to see how the Government tackles the cartels - pharmacists, doctors, dentists, lawyers, accountants, etc. that are the IMF's normal targets.

I'm a pharmacist, and I own my own business. Our fees and margins have been cut so much in the last two years through FEMPI legislation to the point where some weeks I can't afford to pay myself for my six day week and struggle to pay my one full-time and one part-time staff. Saying you're so knowledgable, please inform me of which cartel I belong to because they aren't really doing their job protecting my interests and I sure could use their help!

mistermouse

I am more interested in the ECB and EU treatment of Ireland than the IMF.

We appear to be being screwed by our them more than the IMF as I see it.

I hope we can get to vote no repeatedly against another EU Treaty soon and that politicans who don't accept the first no, get used to the word at the following general election