The EU 'rescue' package comes at a big price

Harry Palmr

Given the likely funding terms of this fund (digital tax etc) Ireland should say nope to the pittance and then inform the EU that we will not be changing any terms and conditions that relate to that tax as we're not going to benefit from it.

threeball

Harry Palmr wrote: »

Given the likely funding terms of this fund (digital tax etc) Ireland should say nope to the pittance and then inform the EU that we will not be changing any terms and conditions that relate to that tax as we're not going to benefit from it.

Exactly, why bother with the EU at all if we can borrow the funds ourselves for close to 0%. Makes no sense to enter in to some sort of "solidarity" fund where we're all borrowing money anyway except we pick up partial debts of other countries. We should plough our own furrow here without getting shafted twice in a decade.

Kermit.de.frog

We should opt out and say we don't require it and while we'll continue to contribute we won't be subject to the terms of the countries that do accept it.

If others want to accept the money, fine. We don't have to.

sameoldname

Kermit.de.frog wrote: »

We should opt out and say we don't require it and while we'll continue to contribute we won't be subject to the terms of the countries that do accept it.

If others want to accept the money, fine. We don't have to.

You might want to check our debt to GNI* ratio and ignore our GDP figures as we all know they're meaningless. It was well over 100% before this whole thing started and will be increasing now due to our shrinking economy. That's before you consider any new borrowing thrown on top of that. How long do you think we can keep borrowing at low rates in that situation?

threeball

sameoldname wrote: »

You might want to check our debt to GNI* ratio and ignore our GDP figures as we all know they're meaningless. It was well over 100% before this whole thing started and will be increasing now due to our shrinking economy. That's before you consider any new borrowing thrown on top of that. How long do you think we can keep borrowing at low rates in that situation?

Aren't we borrowing whether we go through the fund or not, it just has a little EU badge thrown on top.

Kermit.de.frog

sameoldname wrote: »

You might want to check our debt to GNI* ratio and ignore our GDP figures as we all know they're meaningless. It was well over 100% before this whole thing started and will be increasing now due to our shrinking economy. That's before you consider any new borrowing thrown on top of that. How long do you think we can keep borrowing at low rates in that situation?

We can't allow a trojan horse, effectively a bribe (and a pittance at that), to direct taxation and levies from Brussels.

That's not in our national interest and the Irish people have not given their consent to such a move, nor has anyone else.

We can borrow comfortably ourselves, we should do that as every normal country does.

sameoldname

Kermit.de.frog wrote: »

We can't allow a trojan horse, effectively a bribe (and a pittance at that), to direct taxation and levies from Brussels.

That's not in our national interest and the Irish people have not given their consent to such a move, nor has anyone else.

We can borrow comfortably ourselves, we should do that as every normal country does.

Right, so you don't have an answer to my question then. Again, if interest rates rise and borrowing becomes prohibitively costly (which is a very strong possibility) where does the money come from? Are you advocating austerity because it seems like you are.

Kermit.de.frog

sameoldname wrote: »

Right, so you don't have an answer to my question then. Again, if interest rates rise and borrowing becomes prohibitively costly (which is a very strong possibility) where does the money come from? Are you advocating austerity because it seems like you are.

It won't become prohibitive so long as the country stays within it's means.

This is required of all sovereign countries.

There is nothing unusual about it.

sameoldname

Kermit.de.frog wrote: »

It won't become prohibitive so long as the country stays within it's means.

This is required of all sovereign countries.

There is nothing unusual about it.

We're living beyond our means right now. Around a third of people are out of work and we're borrowing to provide supports to them. But fine, you want austerity. I don't think most people are going to like your solution.

Harry Palmr

sameoldname wrote: »

Right, so you don't have an answer to my question then. Again, if interest rates rise and borrowing becomes prohibitively costly (which is a very strong possibility) where does the money come from? Are you advocating austerity because it seems like you are.

Can you show why borrowing will become costly?

Kermit.de.frog

sameoldname wrote: »

We're living beyond our means right now. Around a third of people are out of work and we're borrowing to provide supports to them. But fine, you want austerity. I don't think most people are going to like your solution.

It's not a choice. Every country has to live according to their means.

You seem to be advocating we bankrupt ourselves by not living according to our means.

How bad would austerity be then?

sameoldname

Harry Palmr wrote: »

Can you show why borrowing will become costly?

High previous debt load + shrinking economy + increased spending + slow recovery due to continuing pandemic = higher risk = higher borrowing costs.

Unless economics fundamentally changes during this pandemic I don't see how you can escape from that formula.

sameoldname

Kermit.de.frog wrote: »

It's not a choice. Every country has to live according to their means.

You seem to be advocating we bankrupt ourselves by not living according to our means.

How bad would austerity be then?

I never suggested any such thing. I'm suggesting we don't close off sources of funding because of dislike of the EU.

Kermit.de.frog

sameoldname wrote: »

High previous debt load + shrinking economy + increased spending + slow recovery due to continuing pandemic = higher risk = higher borrowing costs.

Unless economics fundamentally changes during this pandemic I don't see how you can escape from that formula.

So the answer for you is to hand over our fiscal autonomy to Brussels because we are unable to look after ourselves.

Kermit.de.frog

sameoldname wrote: »

I never suggested any such thing. I'm suggesting we don't close off sources of funding because of dislike of the EU.

Nothing to do with dislike of anything.

Everything to do with an underhanded by the back door attempt to give Brussels powers of taxation.

ArchXStanton

[Deleted User] wrote: »

It's always been there, but was suppressed by the feeling that being anti-EU was heretic talk and was frowned upon.
Usually anti EU posts are shouted down very quickly.

Any criticism of the EU on boards sets its nut huggers off, sure look at the roads they gave us for Christ's sakes...

ArchXStanton

[Deleted User] wrote: »

It's always been there, but was suppressed by the feeling that being anti-EU was heretic talk and was frowned upon.
Usually anti EU posts are shouted down very quickly.

Any criticism of the EU on boards sets its nut huggers off, sure look at the roads they gave us for Christ's sakes...

sameoldname

Kermit.de.frog wrote: »

So the answer for you is to hand over our fiscal autonomy to Brussels because are unable to look after ourselves.

You seem to like telling me what I'm thinking. You are the one who says we can finance ourselves without issue. All I'm asking is how you can possibly guarantee that with our current financial situation.

Kermit.de.frog

sameoldname wrote: »

You seem to like telling me what I'm thinking. You are the one who says we can finance ourselves without issue. All I'm asking is how you can possibly guarantee that with our current financial situation.

Like any other country you spend according to what you can afford otherwise you apply for an international bailout.

It's not complicated. We are no different from anyone else.

Harry Palmr

sameoldname wrote: »

High previous debt load + shrinking economy + increased spending + slow recovery due to continuing pandemic = higher risk = higher borrowing costs.

Unless economics fundamentally changes during this pandemic I don't see how you can escape from that formula.

I will counter with AA credit rating (unlike the BB/Baa of 2010), ever falling energy prices, everyone in the same basic boat suppressing inflation, huge slack in the system allowing for inflation free growth, vast amounts of printed money in the system. If you were looking for an environment to borrow in this would be it.

Your supposition about a slow recovery is wrong I think. This is always said and always wrong or has been since the modern Irish economy took shape in the last 30 years. It'll be a bad dip and a fairly rapid recovery not a V but not a U either - in two years we won't be "flying" due to lagging unemployment but we'll be better placed than any of the countries who are going to get the biggest part of the EU loans. Ireland is not like your average European economy (be it for good or ill), it's open and flexible enough to react quickly. The most likely reason for a slow recovery will be inept governance at home rather than external factors.

sameoldname

Kermit.de.frog wrote: »

Like any other country you spend according to what you can afford otherwise you apply for an international bailout.

It's not complicated. We are no different from anyone else.

Right, so we could be looking at a €30 billion spending deficit this year and a 10% reduction in national income. Our national debt was around €200 billion last year so that's a 15% increase this year alone. So how are you so confident we can "borrow comfortably ourselves"? It sounds like by what you're saying we're heading for a bailout. And bailouts come with strings attached.

sameoldname

Harry Palmr wrote: »

I will counter with AA credit rating (unlike the BB/Baa of 2010), ever falling energy prices, everyone in the same basic boat suppressing inflation, huge slack in the system allowing for inflation free growth, vast amounts of printed money in the system. If you were looking for an environment to borrow in this would be it.

Your supposition about a slow recovery is wrong I think. This is always said and always wrong or has been since the modern Irish economy took shape in the last 30 years. It'll be a bad dip and a fairly rapid recovery not a V but not a U either - in two years we won't be "flying" due to lagging unemployment but we'll be better placed than any of the countries who are going to get the biggest part of the EU loans. Ireland is not like your average European economy (be it for good or ill), it's open and flexible enough to react quickly. The most likely reason for a slow recovery will be inept governance at home rather than external factors.

We're an exporting nation, mostly to the EU and nearly exclusively to the west. If the western economy is in the doldrums we're going to be right there with them. I don't disagree with a lot of what you posted but you can't guarantee how the situation is going to go. It's just as likely we could enter a prolonged depression. I suggest we keep our options open.

brickster69

Leo will sort it .

https://www.youtube.com/watch?v=FLo4BdWmNkk

Kermit.de.frog

sameoldname wrote: »

Right, so we could be looking at a €30 billion spending deficit this year and a 10% reduction in national income. Our national debt was around €200 billion last year so that's a 15% increase this year alone. So how are you so confident we can "borrow comfortably ourselves"? It sounds like by what you're saying we're heading for a bailout. And bailouts come with strings attached.

Investors can't get get enough sovereign debt at the moment which is reflected in our yields as well as everyone else. It's not a concern that arises for the foreseeable.

And if it did down the road then we would request assistance. Strings come attached when you fail to budget within your means.

You appear to be advocating we don't live according to our means. You want us to accept a paltry amount of money from the EU which involves a permanent loss of competence in a matter as vital taxation attached.

That is not in our national interest either way.

brickster69

Kermit.de.frog wrote: »

Investors can't get get enough sovereign debt at the moment which is reflected in our yields as well as everyone else. /QUOTE]

The only reason the yields are that way is because the ECB keeps printing money and buying them. They will have to stop at some point.

sameoldname

Kermit.de.frog wrote: »

You appear to be advocating we don't live according to our means. You want us to accept a paltry amount of money from the EU which involves a permanent loss of competence in a matter as vital taxation attached.

Go ahead and quote me, show me where I said we should take the money from the EU.

I'm saying we're currently not living within our means and won't for at least a couple of years. You keep saying we can keep going without external assistance as long as we stay within our means. Borrowing up to €30 billion in a year when our total tax take was ~€60 billion last year and guaranteed to be less this year is absolutely not living within our means.

landofthetree

Greece 178%
Italy 137%
Portugal 121%
Belgium 102%
France 101%
Spain 98%


Eurozone average 86%.

The debt crisis in Europe wasn't fixed. They just kicked the can down the road. Its not only us that will be in trouble.

Meanwhile the average Eurotrash idiot has been distracted by the trival issue of Brexit for the past 4 years.

landofthetree

sameoldname wrote: »

Go ahead and quote me, show me where I said we should take the money from the EU.

I'm saying we're currently not living within our means and won't for at least a couple of years. You keep saying we can keep going without external assistance as long as we stay within our means. Borrowing up to €30 billion in a year when our total tax take was ~€60 billion last year and guaranteed to be less this year is absolutely not living within our means.

I think it was more like a tax revenues of 75 billion but your points atill stands.

sameoldname

landofthetree wrote: »

I think it was more like a tax revenues of 75 billion but your points atill stands.

That's what I though too but I could only find a figure of €59.3 billion for exchequer receipts even though total spending last year was €77.5 billion and apparently we ran a surplus. I ran with the figures I could find because you know the way things are around here.

Kermit.de.frog

sameoldname wrote: »

Go ahead and quote me, show me where I said we should take the money from the EU.

I'm saying we're currently not living within our means and won't for at least a couple of years. You keep saying we can keep going without external assistance as long as we stay within our means. Borrowing up to €30 billion in a year when our total tax take was ~€60 billion last year and guaranteed to be less this year is absolutely not living within our means.

The thread is about the EU 'rescue' funds, you seem to be having a different argument about something else.

So you don't want us to take money on these terms, is that right?

Or you do want us to take it?

Which is it?