Country being charged interest on borrowings from IMF in time of crisis

bunderoon

I think it somes up the IMF / ECB etc when after we already borrow to bail out Europe, they are going to gouge us again in our time of need.

Does anyone know what the interest rate is going to be?
Leo said that we'll be paying this for years to come.

pure.conya

bunderoon wrote: »

I think it somes up the IMF / ECB etc when after we already borrow to bail out Europe, they are going to gouge us again in our time of need.

Does anyone know what the interest rate is going to be?
Leo said that we'll be paying this for years to come.

Hardly surprising really,and if you want to get a real idea how the IMF and ECB go on about their business "behind closed doors" you can listen to the secret recordings that Yanis Varoufakis made when trying to deal with them, it will really open your eyes

https://www.keeptalkinggreece.com/2020/02/14/varoufakis-to-release-eurogorup-recordings-euroleaks/

Hmmzis

Well, yeah, what else would you expect?
They're banks, they charge interest, it's their business. People? That's none of their concern.

Geuze

bunderoon wrote: »

I think it somes up the IMF / ECB etc when after we already borrow to bail out Europe, they are going to gouge us again in our time of need.

Does anyone know what the interest rate is going to be?
Leo said that we'll be paying this for years to come.

Here are some details on the rates charged on the EFSF/ESM loans to Ireland:

https://www.esm.europa.eu/lending-rates


Ireland and Portugal (EFSF)
When the EFSF started its activity, it financed loans to Ireland and Portugal through fixed-rate bond issuances on a back-to-back basis. These loans were more expensive at the outset, given a higher interest rate environment at the time, substantially higher margins charged to borrowers than at present, and the fact that the EFSF was a new issuer in the market. From December 2011, after the approval of the diversified funding strategy, the EFSF progressively moved to pool-funded loans, which were initially financed by short-term bills, therefore the rates were lower. Later on, the funding of the loans progressed towards long-term funding instruments, which generated a gradual increase in the cost of funding in 2012. From the beginning of 2013, the rates decreased progressively due to a low-rate environment.

Geuze

https://www.esm.europa.eu/assistance/ireland

Have a look here for details on ESM interest rates to Ireland.

Geuze

bunderoon wrote: »

I think it somes up the IMF / ECB etc when after we already borrow to bail out Europe, they are going to gouge us again in our time of need.

Does anyone know what the interest rate is going to be?
Leo said that we'll be paying this for years to come.

Given that we can borrow from the bond markets at under 1%, I don't see us returning to look for more loans from the ESM.

Salary Negotiator

The last bond issued by the NTMA on April 7th was at 0.242%, that was to raise €6bn.

We are in a much better place now than during the financial crash.

bunderoon

Hmmzis wrote: »

Well, yeah, what else would you expect?
They're banks, they charge interest, it's their business. People? That's none of their concern.

We are already borrowing from the IMF and paying 6Bn per year in interest alone.
Where is this interest going to come from? We have to borrow more (at interest) to pay that interest..
Is this new money already in existence or is it generated on a computer screen?


Covid-19 is a world problem. Interest free loan or an actual bail out would be better for everyone to help the recovery.

There must be a better way to recovery while at the same time not turning into Zimbabwe.

LeinsterDub

bunderoon wrote: »

We are already borrowing from the IMF and paying 6Bn per year in interest alone.
Where is this interest going to come from? We have to borrow more (at interest) to pay that interest..
Is this new money already in existence or is it generated on a computer screen?


Covid-19 is a world problem. Interest free loan or an actual bail out would be better for everyone to help the recovery.

There must be a better way to recovery while at the same time not turning into Zimbabwe.

You don't get a lower rate on your mortgage because you've taken out a car loan. We agreed the rate at the time of the the bail out. That's how these things work

bunderoon

LeinsterDub wrote: »

You don't get a lower rate on your mortgage because you've taken out a car loan. We agreed the rate at the time of the the bail out. That's how these things work

We all know that.
This is a world wide pandemic, not a financial Debt tiger/bubble. Every country has to fight this and only a number of countries are permitted to print their own currency. There should be no interest charged on this as there is no place for this interest to be created from.

Simply - I force you to give up your right to print money to use in exchange for goods and services. You must use my money for those and I will charge you on every euro you borrow.
As soon as you take my money as a loan, you are forever in debt to me as I issue the currency and there is never enough money to cover the interest until I issue it. But that also has interest attached, so the cycle continues and the debt increases. We all know that is how the worlds banking system works.


This is why this situation sickens me. You have creators & issuers of credit who loan it to a nation. That nation is then obliged to donate it to another nation in need. Instead of the issuer donating that money straight to that nation in need.

LeinsterDub

bunderoon wrote: »

We all know that.
This is a world wide pandemic, not a financial Debt tiger/bubble. Every country has to fight this and only a number of countries are permitted to print their own currency. There should be no interest charged on this as there is no place for this interest to be created from.

Simply - I force you to give up your right to print money to use in exchange for goods and services. You must use my money for those and I will charge you on every euro you borrow.
As soon as you take my money as a loan, you are forever in debt to me as I issue the currency and there is never enough money to cover the interest until I issue it. But that also has interest attached, so the cycle continues and the debt increases. We all know that is how the worlds banking system works.


This is why this situation sickens me. You have creators & issuers of credit who loan it to a nation. That nation is then obliged to donate it to another nation in need. Instead of the issuer donating that money straight to that nation in need.

So you want to tear up the whole system then? It has nothing to do with the bailout so?

bunderoon

LeinsterDub wrote: »

So you want to tear up the whole system then? It has nothing to do with the bailout so?

No..

The bailout was down to the ignorant spending money they dont have while also letting the government saddle them with foreign debt.

Again this is different. This is a worldwide pandemic which is nothing like the above. So financial rules shouldnt be the same.

LeinsterDub

bunderoon wrote: »

No..

The bailout was down to the ignorant spending money they dont have while also letting the government saddle them with foreign debt.

Again this is different. This is a worldwide pandemic which is nothing like the above. So financial rules shouldnt be the same.

What exactly is your point? You want historic debt renegotiated?

bunderoon

LeinsterDub wrote: »

What exactly is your point? You want historic debt renegotiated?

I thought it was obvious at this stage.
There should be interest free measured bailouts by the the worlds central banks who normally lend to nations in their district. This is badly need to jumpstart all the economies.

A renegotiation of the interest percentage on the Irish bank 'bailout' would be great as it's holding us back from being anyway independent. But that's not going to happen. We borrow more at interest annually just to cover interest owed on the debt.

So as I started the thread, I asked what state assets will be put up for sale to cover the Corona loan that we are getting. Vultures never waste a crisis as we all know.

I can think of:
Water
Forestry and land
Electricity generation and infra network.
Various state property
HSE.
Broadband - but that deal has already gone through.
Pension fund - taking from it to pay part of the loan.
Road network - state own sections that can be tolled.
Increase of Home tax
Increase of PAYE
Increase of CGT
Increase of USC
Increase of VAT

I agree that we need to pull together and get through this crisis, but there will be vultures waiting in the wing and have pals in FFG to enable them.

bunderoon

Just to add:

The whole point of this thread so to make people aware of possibility of losing more state assets.
We were blindsided the last time. Lets not this time.

bunderoon

bunderoon wrote: »

No..

The bailout was down to the ignorant spending money they dont have while also letting the government saddle them with foreign debt.

Again this is different. This is a worldwide pandemic which is nothing like the above. So financial rules shouldnt be the same.

What foreign debt did we get saddled with?

LeinsterDub

bunderoon wrote: »

Just to add:

The whole point of this thread so to make people aware of possibility of losing more state assets.
We were blindsided the last time. Lets not this time.

What state assests where sold as a result of the bailout?