Troika Review 20th October

Scofflaw

Currently showing live here: http://www.euireland.ie

Statement:

Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Dublin during October 11–20 for the regular quarterly review of the government's economic programme. As envisaged when the mission was scheduled, policy discussions have been concluded with the exception of the specific fiscal measures to be included in Budget 2012, which are being determined by the Government and will be assessed by the three institutions in the coming weeks. Following these decisions, the EC and IMF missions will seek approval for the completion of this review from the European Council and the IMF Executive Board respectively.

Programme implementation continues to be strong. The authorities have completed the key initial phase of the comprehensive financial sector reforms launched in March. The fiscal deficit limit of 10½ percent of GDP in 2011 is expected to be met and important structural reforms are being put in place. These strong policy efforts have underpinned the decline in Irish sovereign spreads in recent months, together with improved EU financing terms.

In a welcome sign of Ireland's strengthened competitiveness, economic growth in the first half of 2011 was stronger than expected. But the slowdown in key trading partners is likely to cool Ireland's export growth. In addition, domestic demand is expected to contract slightly faster than was projected at the time of the previous review. Together, these factors will dampen the economic recovery with real GDP growth rate expected to be about 1 percent in both 2011 and 2012.

The authorities are firmly committed to fiscal consolidation to put the country's debt on a downward path, by bringing the general government deficit to below 3 percent of GDP by 2015. The forthcoming 2012 Budget will make progress along that path by implementing sufficient consolidation to safely limit next year's deficit to no more than 8.6 percent of GDP, striking a balance between debt reduction imperatives and limiting the drag on growth and job creation.

To underscore their commitment to sound fiscal policy, the authorities intent to update the medium-term fiscal consolidation plan in the coming weeks, with the supporting measures to be provided with the 2012 Budget. These measures will be guided by the authorities' Comprehensive Review of Expenditure, enabling savings to be made in a targeted manner rather than through across-the-board cuts. We welcome the establishment of the Irish Fiscal Advisory Council and the release of its first fiscal assessment report.

The key initial phase of the comprehensive financial sector reforms launched last March has been implemented. Recapitalization of the banking sector has been completed at a lower than expected cost to the budget, benefiting from private investor participation and burden-sharing with the holders of subordinated bank debt. Deleveraging of the banking sector is progressing as planned, despite challenging conditions and banks have secured term funding reflecting improved confidence. Further progress in these areas is needed to allow banks to fulfill their essential role in the economy.

The authorities are implementing structural reforms to support job creation and growth. To help reduce unemployment sectoral wage agreements are being prepared, together with a strengthening of activation and training policies. Legislative changes are being introduced to enhance competition in the medical, legal and pharmacy sectors with the view to lowering costs.

The objectives of Ireland's EU-IMF supported programme are to address financial sector weaknesses and to put Ireland's economy on the path of sustainable growth, sound public finances, and job creation, while protecting the poor and most vulnerable. The programme includes loans from the European Union and EU member states amounting to €45.0 billion and a €22.5 billion Extended Fund Facility with the IMF. Ireland's contribution is €17.5 billion. Approval of the conclusion of this review will allow the disbursement of €3.8billion by the IMF and €4.2 billion by the EU. The mission for the next programme review is scheduled for January 2012.

cordially,
Scofflaw

liammur

Mr Chopra noted that exports were playing a large part in the recovery, which also posed a risk.

"Export demand is linked to global demand. As we've seen the global outlook has worsened," he said.

This is the potentially dangerous part. As I highlighted to another poster on different thread, we are very dependant on a strong Europe and strong global economy which isn't ideal.

Scofflaw

liammur wrote: »

Mr Chopra noted that exports were playing a large part in the recovery, which also posed a risk.

"Export demand is linked to global demand. As we've seen the global outlook has worsened," he said.

This is the potentially dangerous part. As I highlighted to another poster on different thread, we are very dependant on a strong Europe and strong global economy which isn't ideal.

The only thing that would be worse is a greater exposure to the domestic economy, which would leave us lifting ourselves by our broken bootstraps.

I liked the question about medical and legal fees - whether the troika felt that they'd seen sufficient progress, to which the answer appeared to be very much 'no', or even 'not at all'. I cannot imagine an Irish government pursuing such reform except under this kind of external pressure.

cordially,
Scofflaw

liammur

Scofflaw wrote: »

The only thing that would be worse is a greater exposure to the domestic economy, which would leave us lifting ourselves by our broken bootstraps.

I liked the question about medical and legal fees - whether the troika felt that they'd seen sufficient progress, to which the answer appeared to be very much 'no', or even 'not at all'. I cannot imagine an Irish government pursuing such reform except under this kind of external pressure.

cordially,
Scofflaw

A pick up in the domestic economy is what essentially will get the economy moving again. Very hard to see how that will come about.

How can they make progress on medical fees ?

Scofflaw

liammur wrote: »

A pick up in the domestic economy is what essentially will get the economy moving again. Very hard to see how that will come about.

Wouldn't a pick up in the domestic economy be the same as the economy moving again? As far as I can see, it happens if exports pick up sufficiently for the movement in that to stir the domestic economy.

liammur wrote: »

How can they make progress on medical fees ?

Good question - the desirable endpoint seems to be quite a large reduction in, for example, GP fees. Istvan - the Commission guy - was pointing out that Brussels is hardly a cheap place to live, but a GP visit there costs half of what it costs here, so evidently there's something that can be done.

cordially,
Scofflaw

liammur

Scofflaw wrote: »

Wouldn't a pick up in the domestic economy be the same as the economy moving again? As far as I can see, it happens if exports pick up sufficiently for the movement in that to stir the domestic economy.


cordially,
Scofflaw

The key difference is, if you take rural Ireland, any town say Tralee. The export sector here isn't hugely important, what it really needs is people to go out and spend money. Dublin/Galway/Cork have escaped the worst of this recession, because these are the places where the export economy is based. No improvement in the domestic economy and the rest of the country will lag further behind.

meditraitor

Does the Irish taxpayer pay these people?

Boskowski

I dont know the answer to that but an educated guess would go along the lines 'not directly, no'.
More importantly, how is that significant? If anything I think the Irish taxpayer should pay these people since they seem to get things done.

murphaph

liammur wrote: »

The key difference is, if you take rural Ireland, any town say Tralee. The export sector here isn't hugely important, what it really needs is people to go out and spend money. Dublin/Galway/Cork have escaped the worst of this recession, because these are the places where the export economy is based. No improvement in the domestic economy and the rest of the country will lag further behind.

I would say the export side of the agri-food business is incredibly important and this sector is built largely on top of farming. This is the type of industry rural Ireland can support in a sustainable way.

People not linked to the agri-food sector in rural Ireland will have to continue the process of urbanisation and move to where the jobs are. The IDA etc. can't force companies to locate somewhere.

liammur

murphaph wrote: »

People not linked to the agri-food sector in rural Ireland will have to continue the process of urbanisation and move to where the jobs are. The IDA etc. can't force companies to locate somewhere.

You must never try to force someone in, whether it's through unsustainable subsidies or otherwise. Government should scale back on the IDA and concentrate more on Irish start ups.
It's consumer spend that's needed. Many economists know that, but they also know that the consumer is crippled with debt, this is the main reason you hear them looking for mortgage write downs.

Dr Galen

Consumers are also crippled with fear. Recent reports show that we have one of the largest levels of savings in the EU at present. If even a small fraction of that money was spent in the domestic economy it would help.

I'll have a look for some stats once I finish my coffee and bacon sandwich

iMax

Does the bread not get soggy once you pour the coffee on?

liammur

You are correct in that. But the problem is, it's the older generation that have the money, and by and large, they are not the spenders.

Dr Galen

Funnily enough, I was thinking along those lines myself, so I'm looking to see if I can find a breakdown on the saving stats.

bleg

They're not comparing like with like with GP fees. I'm not a doctor but due to different health and taxation systems in different EU countries there are obviously going to be differences. The lower rate of tax in Belgium is comparable to the higher rate here. Do GPs in Belgium get a government supplement per patient? Does Belgium have a medical card system?


Comparisons like this aren't valid.

bleg

By the way, I'm not saying that nothing should be changed, just that we need to have a more mature conversation free from innacurate information and rising above petty claims. We should be looking at increasing the role of the GP especially with new technologies coming down the line (lab on a chip etc...)

liammur

bleg wrote: »

They're not comparing like with like with GP fees. I'm not a doctor but due to different health and taxation systems in different EU countries there are obviously going to be differences. The lower rate of tax in Belgium is comparable to the higher rate here. Do GPs in Belgium get a government supplement per patient? Does Belgium have a medical card system?


Comparisons like this aren't valid.

I don't know much about the medical system here, but doctors getting something like €8 for issuing sick certificates is a complete joke and highlights the problems in the country.

Scofflaw

bleg wrote: »

They're not comparing like with like with GP fees. I'm not a doctor but due to different health and taxation systems in different EU countries there are obviously going to be differences. The lower rate of tax in Belgium is comparable to the higher rate here. Do GPs in Belgium get a government supplement per patient? Does Belgium have a medical card system?


Comparisons like this aren't valid.

Why not? What you've suggested there is that different mechanisms are the reason for the different pricing - and isn't that the point?

As for the Belgian system - see here: http://www.expatica.com/be/health_fitness/healthcare/belgian-healthcare-system-1493_8299.html

cordially,
Scofflaw

FreudianSlippers

I'm slightly confused as to what they want the legal profession to do?
The state has already dropped the amount paid for legal aid defence below that of prosecution (which seems highly unfair to the poor accused).

Other than that, fees for civil work are not charged to the state - so isn't it really capitalism to allow people to pay what is a fair rate for legal services? If people want a cheap solicitor they will go to a cheap one... and vice versa!

I could understand more transparency in the profession, but barristers (especially young ones) are getting screwed daily; no income and no social benefits.

The whole thing of dropping wigs and gowns seems like a total distraction as to the real problem.

Also, allowing all colleges to award the degrees of Solicitor-at-law and Barrister-at-law only lowers the quality of people entering the profession and raises the number of people entering an already overpopulated bunch of professions.

I understand allowing barristers for form chambers and work for companies, but what else do they really want us to do?

murphaph

FreudianSlippers wrote: »

so isn't it really capitalism to allow people to pay what is a fair rate for legal services? If people want a cheap solicitor they will go to a cheap one... and vice versa!

In Germany prices for solicitors and notaries are regulated by law. They may not charge more or less for their services.

I don't know if that is a model to follow but IMO (speaking as a layman who has had enough interaction with the civil law to do me for a lifetime) the main problem is the system itself. It could be streamlined and simplified (removing English common law as the basis), reducing the need for highly skilled barristers to win a case for you. Both Germany and Japan tore up their law books and started from scratch in the middle of the last century.

FreudianSlippers

murphaph wrote: »

In Germany prices for solicitors and notaries are regulated by law. They may not charge more or less for their services.

I don't know if that is a model to follow but IMO (speaking as a layman who has had enough interaction with the civil law to do me for a lifetime) the main problem is the system itself. It could be streamlined and simplified (removing English common law as the basis), reducing the need for highly skilled barristers to win a case for you. Both Germany and Japan tore up their law books and started from scratch in the middle of the last century.

So are there no trial attorneys in Germany or Japan?

I mean, the US doesn't have a solicitor/barrister distinction in "words" - but in reality they do. Laywers can be either trial attorneys or regular attorneys (the trial getting paid more usually).

I'm not saying that some people in the legal profession aren't making a killing - it's just not the barristers (contrary to public opinion)

murphaph

FreudianSlippers wrote: »

So are there no trial attorneys in Germany or Japan?

I worded it badly. I believe in English common law systems that precedents set by (sometimes obscure) court rulings play a much greater role than in codified systems. I believe that a trial attorney in a German court simply doesn't have to be as highly skilled (read:expensive) to get a fair result for their client, because the system is less archaic.

Having said that, German courts don't have juries at all, rather a panel of judges, so you don't have to be a "performer" as a barrister in Germany, just to be able to argue the points of law to other legal professionals who won't be swayed by a good "performance" by a barrister.

Even the English have made ground in modernising their own system that we have not. Still no ability for barristers to form companies, that was introduced in England and Wales decades ago. Solicitors fees are also regulated in England and Wales as far as I know.

There are problems with delays in the court system as well. A business needing a quick decision may be waiting months for a hearing, possibly going under while waiting.

Alibaba

meditraitor wrote: »

Does the Irish taxpayer pay these people?

If we had any sense we would pay them to run the country and give those useless politicians the boot. At least the troika seem to know what they are talking about. It's only a pity they didn't take over the country 5 years ago.

liammur

Alibaba wrote: »

If we had any sense we would pay them to run the country and give those useless politicians the boot. At least the troika seem to know what they are talking about. It's only a pity they didn't take over the country 5 years ago.

That's an interesting viewpoint. I've thought that for years, the less influence we have ourselves the better imo.

Will be interesting to see if more people share that opinion as time goes on.

Scofflaw

liammur wrote: »

That's an interesting viewpoint. I've thought that for years, the less influence we have ourselves the better imo.

Will be interesting to see if more people share that opinion as time goes on.

I'm afraid I won't - I may despair of the Irish electorate from time to time, but I never despair of them, if you see what I mean.

cordially,
Scofflaw

kennyb3

Dr Galen wrote: »

Consumers are also crippled with fear. Recent reports show that we have one of the largest levels of savings in the EU at present. If even a small fraction of that money was spent in the domestic economy it would help.

I'll have a look for some stats once I finish my coffee and bacon sandwich

Real saving or paying down debt? There is a big difference - i'd hazard a guess its the latter

Scofflaw

kennyb3 wrote: »

Real saving or paying down debt? There is a big difference - i'd hazard a guess its the latter

Judging from the CSO reports, it is the latter - but the two are largely commensurate.

cordially,
Scofflaw

liammur

Scofflaw wrote: »

I'm afraid I won't - I may despair of the Irish electorate from time to time, but I never despair of them, if you see what I mean.

cordially,
Scofflaw

I agree to a point, but is it the electorate or the system that is letting us down? Could the ordinary person have legislated for FF to make absolute carnage of the econmony from 1997-2005?

Alibaba

Handing over our soverignty might not be a good thing... But then again at least these guys (the troika) seem to be doing a better job of managing the economy than we done ourselves.
Fianna Fail had 14 years in power and the country prospered on a DEBT BUBBLE. Now were up to our ears in debt , 14% unemployment and all that goes with it.
At least the troika seem to be doing a better job of managing things and I would have more confidence in them. They talk now even of tackling the outrageous fees charged by solicitors, doctors, and the like.
These fees something are something that our politicians would not face up to.....And well what do you know... maybe because most TDs and Ministers happen to be Solicitors, Doctors, Accountants etc.
So bring on the TROIKA...

Debtocracy

We're just in the honeymoon phase with our new masters. Give it a year or two and the Troika will be as hated in Ireland as in Greece.

Scofflaw

Debtocracy wrote: »

We're just in the honeymoon phase with our new masters. Give it a year or two and the Troika will be as hated in Ireland as in Greece.

I don't think there was ever a 'honeymoon' period - most people's reaction initially was shock and upset, so one could equally well say that perhaps some of the shock of the troika's initial intervention is wearing off, and we don't seem to have been shipped off to the salt mines just yet. Instead, some issues are being tackled that one cannot imagine any Irish government being willing to tackle, but that I think a large part of the public would like to see tackled.

It's up to us as a country to get things to a stage where the troika are unnecessary, and I can't see them staying past that point.

cordially,
Scofflaw

IRISHREDSTAR

Why it that farmers are getting is are treated differently by the Government when it comes to Social Welfare.
Example a Single Farmer with a business worth hundreds of thousands or millions of euro namely his farm (land machinery etc.) and still claim the full rate of dole. Of 188 Euros per week into his bank.

He can have 20 grand in cash in the bank as - The first €20,000 of the capital is disregarded

• €20,000 to €30,000 is assessed at €1 for every €1,000
• Next €10,000 is assessed at €2 per €1,000
• Excess of €40,000 is assessed at €4 per €1,000

The assessment only applies to units of €1,000. Therefore all amounts should be rounded down to the nearest €1,000. For example if you have €38,400 in the bank, the first €20,000 is disregarded, €10,000 is assessed at €1 per €1,000, which is €10 and the remaining €8,000 is assessed at €2 per €1,000, which is €16 per week. So your income from capital is €26 per week. (dept of s.w.)

Weekly rate of farmers dole is 188 -26 means a farmer with a very nice farm nice payments from the E.U. sod all tax to pay with 38 grand in the bank gets 162 Euros dole each week and if he has a wife and kids about 350 a week dole money to a rich man.
This applies to nobody else if a unemployed worker has land, expensive machinery etc. other that their family home they would forced to sell this by the social welfare.

The whole idea of paying working farmer businessmen the dole is a farce most farmer’s pay sod all tax because they can fix the paperwork. They pay no tax on diesel, why should they be getting the dole.