Ministers Howlin and Noonan storm out of talks with Troika

donegal_road

just read this in yesterdays Times.

Brendan Howlin and Michael Noonan have engaged in a series of heated arguments with senior officials of the troika over the scale of this year’s budget cuts and tax increases.

The exchanges are said to have been so furious that on one occasion the two Irish ministers said there was little point in continuing the meeting and left the room.

Looking a bit worrying for the next budget..

Nody

donegal_road wrote: »

Looking a bit worrying for the next budget..

Guess that depends on your view; I'll take third party view with realistic expectations on growth over fantasy numbers pulled from the behind of a politican (Anglo have already proven how well those work anyway). The second type of numbers tends to be very popular in calculations for GDP growth by national politicans for upcoming budgets and always get revisioned down later ("but next year we'll suddenly have everything turned around; trust us...").

donegal_road

I cant seem to find anything on RTE about this, the Independent haven't mentioned it either. The Sunday Times thought it a story worth covering. If it was to show that there were tough negotiations happening on the country's behalf, then surely it would be all over the evening news?

Cody Pomeray

Can't really establish the nature of the disagreement from behind the S/Times paywall either.

Presumably... if even true... it related to specific expenditure and revenue decisions as opposed to the overall adjustment for 2014.

No Pants

Showmanship. Barely worth reporting on.

hmmm

Two politicians from a failed political system which has bankrupted us, storm out of a meeting with representatives of financial grown-ups. Because we don't need none of their advice. The arrogance has never left us.

who_me

I wonder how this tallies with Ashoka Mody's comments over the weekend about austerity; if there's any connection.

Jawgap

Posturing and political theatre - they're trying to persuade us they're on the side of the people.

Sand

I'd be more willing to give it credence in that it appears in the Sunday Times, not RTE or the Indo/IT which would be the typical place to leak a story they want out (which probably also explains why RTE and Indo/IT isn't carrying it). I don't think it makes sense for the government to want to leak it: they just look weak, "storming" out (though I wonder if thats the same sort of headline writing that meant everytime Roy Keane said something it was "Roy Keane Blasts <So and So here>") but then having to give the nod to further negotiations the next day.

The time for tough negotiations was 3 years ago. The Green Jersey brigade has driven Ireland firmly to its knees. The Troika doesn't negotiate with supplicants.

Mr.Micro

Jawgap wrote: »

Posturing and political theatre - they're trying to persuade us they're on the side of the people.

I would say that is more like it. Oh look at our outrage...... then go back and do the deal, forced by the troika, lol.

Brussels Sprout

More bad news for the squeezed middle no doubt.

golfwallah

Jawgap wrote: »

Posturing and political theatre - they're trying to persuade us they're on the side of the people.

Maybe, just maybe, this theatrical “row” is a prelude to government seriously tackling waste in public expenditure (i.e. because “the Troika made us do it”). After all, they had no problem identifying such obvious waste when in opposition.

See, for example, the excerpts below from a speech made by Joan Burton in opposition:

o The examples of Government waste are too numerous to go into great detail....
o .... managers and senior managers do not have the necessary management and technical skills to run large specialist or complex services that aim to deliver services.
o There is a competence deficit not only at technical and managerial level but also at the top level of political leadership.
o A culture of full accountability and responsibility is absent from the current political system.
o Nobody is held fully accountable, nobody is fired and rarely are officials identified as being responsible for incompetence.
o In summary, this Government is neither able nor willing to reform the Government and administrative systems to get better levels of service to the public from the taxes the public pay. We need a Dail body to oversee the management of public service delivery at a reasonable cost.

http://www.kildarestreet.com/debate/?id=2005-05-17.293.34)

Wouldn’t it be refreshing if our elected representatives had the courage to implement their own ideas, particularly when they have a huge mandate from the electorate to sort out the economy?

We now have the Dail body, headed by Minister Howlin, - but, alas, not the reasonable cost!

At this stage every household in the country has learned or is learning the importance of living within their means, without the luxury of continued borrowing to prop up overspending.

I guess it’s better “optics” to seek out someone else to blame – the current opposition for their failures to tackle well known issues or the troika for making government start to tackle the self same issues.

When will our politicians ever grow up?

realitykeeper

Our Ministers storming out of a meeting with the Troika would indicate that the Troika are insisting on strict conditions before they give us more money and our ministers are throwing a tantrum by insisting they should be allowed to continue living beyond our means. The populist policies of previous governments are what got us into this mess in the first place - is there any limit to the stupidity of Irish government ministers?
On a slight tangent to this debate, I read recently that the government plans to spend the 6 billion in the national pension reserve fund to invest in various infrastructure projects over the next few years. This raises another question: After they have spent the 6 billion, what then? Some of the unemployed will have been employed for a few years and we will have some new infrastructure but the fundamental impediment to economic growth will still be absent.

The economy has to be able to compete and it can`t because we are in a catch 22 situation:
1. The government owns the banks.
2. The banks need loans to be repaid.
3. Irish employees need generous salaries to afford celtic tiger era mortgages.
4. Chinese employees don`t need generous salaries because they do not have celtic tiger era mortgages.
5. Chinese employees cost less so Chinese employers are more competitive than Irish employers.
6. Ireland continues to lose manufacturing jobs to the far east.

To break this cycle, the government has to re-privatize the failed banks and initiate a competitive economy. If they don`t, there is no way out of the dilemma the country is in. The Irish economy will go headlong into the abyss if it stays its present course.

donegal_road

maybe the ministers realise the Troika are going back on their word over repaying Anglo bondholders, and Ireland is not going to be allowed the wriggle room we were told we would get.

Jawgap

golfwallah wrote: »

Maybe, just maybe, this theatrical “row” is a prelude to government seriously tackling waste in public expenditure (i.e. because “the Troika made us do it”). After all, they had no problem identifying such obvious waste when in opposition.

.......

No, the government are peddling a narrative that says "Yes, things are bad, but if it wasn't for us they'd be so much worse - our heroic efforts are all that lie between you and utter oblivion."

That's a problem - the bigger problem is too many people are swallowing it.

As for waste in the PS - there's plenty of it and as a PS worker I can tell you there is not one ounce of political will available to be invested in tackling it - if there was then the Haddington Road Agreement would have been about redundancies (compulsory as necessary), amalgamation, compulsory redeployment and proper accountability. There's none of that - they promised the union leaders that they would protect their position by maintaining membership numbers in return for the same leadership shepherding through the pay cuts, and that's why the same structure, same processes and same waste are present as were present six months ago.

Cody Pomeray

Pat Rabbitte mentioned "extensive" negotiations directly involving Michael Noonan, Brendan Howlin and the Troika on the radio this morning, and the decision to allow the State retain some of the income from the sale of state assets for the purposes of economic expansion.

There seemed to be an implication that the negotiations were difficult, and I think there is a strong likelihood that the the reported exchange related to the proceeds of the sale of state assets.

donegal_road

I see the Irish Examiner has the story, there is also a thread over on Politics.ie about this.

Examiner link

It is believed the arguments were over the scale of the cuts needed in October's budget - or how much of the €1bn saved through the Anglo promissory notes could be used to create jobs or stimulate growth.

It is understood Minister Howlin wants the target to be the 5.1% deficit mark - while the IMF is insisting a €3.1bn reduction.

hmmm

I'm sure the Troika laugh at Labour Ministers who keep saying they want money to "invest" in "projects". Because building roads in the back of nowhere, staffed by Polish and Turkish contractors is a great way to "stimulate the economy". I can't believe we're really going to allow Labour to use what is left of the NPRF in government led projects.

Government should get out of the way and let the economy recover, not keep pouring money into taxpayer funded makework projects which rarely deliver any sort of value.

ardmacha

Because building roads in the back of nowhere, staffed by Polish and Turkish contractors is a great way to "stimulate the economy". I can't believe we're really going to allow Labour to use what is left of the NPRF in government led projects.

Building roads or the like has the advantage that those in the future who pay for them can also use them. Other forms of expenditure leave much less afterwards.

golfwallah

ardmacha wrote: »

Building roads or the like has the advantage that those in the future who pay for them can also use them. Other forms of expenditure leave much less afterwards.

I don’t think we need any more roads right now – traffic has flat-lined and is way below the levels predicted as justification for the massive spending already made:
http://www.independent.ie/opinion/analysis/colm-mccarthy-now-is-not-the-time-to-splash-out-on-building-29105460.html

There needs to be a strong financial case (independently audited by professionals – not politicians) for any more spending on infrastructure, that creates only temporary jobs – put simply, there has to be a return on any such investment way above what we would get from repaying our already massive and growing public debt. We just can't afford more roads when we are almost overwhelmed with debt.

The ancient Romans provided bread & circuses to keep their citizens happy but balanced this with improved infrastructure on roads, water schemes, etc. and a government system that lasted for centuries. They understood the money had to come from somewhere, so much of this was financed through booty plundered through wars with their neighbours.

Contrast this with our government today – spending, not only on the essentials but on waste and all financed from taxation today and the hope of yet more taxes tomorrow (through borrowing).

ardmacha

I don’t think we need any more roads right now – traffic has flat-lined and is way below the levels predicted as justification for the massive spending already made:

Of course traffic has flatlined in recession! While there will not be rapid growth of some periods in the past, there will be growth when economic activity returns and there are many roads that are unsuitable and unsafe for their present level of traffic.

Of course there should be measures of the cost and value of expenditure, but there is much waste on things that have little value.

golfwallah

ardmacha wrote: »

Of course traffic has flatlined in recession! While there will not be rapid growth of some periods in the past, there will be growth when economic activity returns and there are many roads that are unsuitable and unsafe for their present level of traffic.

Of course there should be measures of the cost and value of expenditure, but there is much waste on things that have little value.

Maybe we should see some evidence of “growth when economic activity returns” first, before investing more public (borrowed) money in new roads. I have no problem with spending to maintain the existing road infrastructure – but that does not require the massive amounts required for new road construction.

Or would you prefer to go the road of Spain, with massively underutilized road and ghost airport infrastructure, with very little traffic / no air travellers (e.g. Ciudad Real near Madrid, Castillon on the airport-abundant east coast or Corvera in Murcia)?
http://articles.philly.com/2011-07-03/news/29733235_1_spain-satellite-airport-viable-airport

I very much doubt, given recent economic experiences, if any investors / bankers (including the Troika) would be convinced by the “build it and they will come” argument. And I for one am thankful that we do have the Troika acting as watchdog to save us from our politicians’ worst excesses of unnecessary over-investment / wasteful expenditure.

I would prefer if any monies released by the Troika (over and above that used for debt reduction) were spent on tackling issues that would produce a demonstrable return, such as:
• Reduction in fuel imports by better support for insulation / fuel efficiency
• Improved business opportunities through more substantial investment in broadband infrastructure
• Tackling inefficiencies in provision of health and other public services

Cody Pomeray

hmmm wrote: »

I'm sure the Troika laugh at Labour Ministers who keep saying they want money to "invest" in "projects". Because building roads in the back of nowhere, staffed by Polish and Turkish contractors is a great way to "stimulate the economy". I can't believe we're really going to allow Labour to use what is left of the NPRF in government led projects.

We can hardly maintain the roads we have, the budget for 2014 is about half of what it should be for road maintenance.

Combined with higher tar prices, this means that the majority of the roads in the country are not being maintained as part of regular maintenance cycles.

So yes, we need "projects" to maintain roads, and even to build new roads or expand current routes. People scoff at road building because it was abused in the past without actually taking full account of how crucial the road infrastructure is to economic expansion.

donegal_road

I took this photo in Nove Scotia 3 years ago. They were resurfacing and widening a stretch of road that was 400m, .. I wonder what the cost of doing the equivalent would be in Ireland?

Jawgap

Cody Pomeray wrote: »

We can hardly maintain the roads we have, the budget for 2014 is about half of what it should be for road maintenance.

Combined with higher tar prices, this means that the majority of the roads in the country are not being maintained as part of regular maintenance cycles.

So yes, we need "projects" to maintain roads, and even to build new roads or expand current routes. People scoff at road building because it was abused in the past without actually taking full account of how crucial the road infrastructure is to economic expansion.

Tar isn't used in road maintenance - it's penetration grade bitumen for the "road pavement" and bitumen emulsion for the surface dressing.

Jawgap

donegal_road wrote: »

I took this photo in Nove Scotia 3 years ago. They were resurfacing and widening a stretch of road that was 400m, .. I wonder what the cost of doing the equivalent would be in Ireland?

Difficult to know without seeing the road, but from the figure on the sign that equates to about 1.8m Canadian Dollars per km which is about 1.3m Euros per km.

Typical cost of building a dual carriageway in Ireland (not a motorway) is about 1.4m Euros per km.

Re-surfacing a road in Dublin works out about €26 per square metre - just re-surfacing with no other re-construction work.

Cody Pomeray

Jawgap wrote: »

Tar isn't used in road maintenance - it's penetration grade bitumen for the "road pavement" and bitumen emulsion for the surface dressing.

I'm not a council worker, I'm just using a common terminology that people recognize.

"Bitumen products" have become more expensive.

Is everyone happy?

Private Joker

donegal_road wrote: »

I took this photo in Nove Scotia 3 years ago. They were resurfacing and widening a stretch of road that was 400m, .. I wonder what the cost of doing the equivalent would be in Ireland?

i'd agree with jawgaps' figures, that seems like an expensive overlay.

donegal_road

Jawgap wrote: »

Difficult to know without seeing the road, but from the figure on the sign that equates to about 1.8m Canadian Dollars per km which is about 1.3m Euros per km.

Typical cost of building a dual carriageway in Ireland (not a motorway) is about 1.4m Euros per km.

Re-surfacing a road in Dublin works out about €26 per square metre - just re-surfacing with no other re-construction work.

to be honest, I thought that sign was a joke when I saw it. I could find the stretch of road on google maps Im sure, I cant remember the width of the road, I do know that there was part of a bridge involved.

Interesting that the signage is a paper-printed sheet on a lash-up wooden frame that looks like it will last just long enough to have gotten the point across. Ours, by contrast, are humungous metal, reflect in the dark, no-expense-spared jobbies, on huge thick metal poles, cemented into the ground over the course of a day by 4 workers, two vans, an excavator and a lorry, with another couple of workers up the road a bit to stop/start the traffic for good measure because they erected it on a bad bend. As I presume these signs will almost last forever, by the time all the roads have been improved you won't be able to see them for the perma-signage.

Jawgap

The sign also doesn't list everyone from the chief engineer to the tea-boy! And I don't suppose at the end of the works they dropped a lump of granite there with all the names of the politicians hacked into it to make sure that even those who come after us at the end of the next ice age will know who the cathoirleach of the local council was in the early 21st Century.

I like the precision in the figure quoted - you just know in Canada it's not going to cost a cent more than that!