|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
mises
Joined: 05 Nov 2007
Location: retired
|
 Posted: Sun Feb 27, 2011 7:22 pm Post subject: Ireland's new government on a collision course with EU |
 |
|
http://www.telegraph.co.uk/news/worldnews/europe/ireland/8349497/Irelands-new-government-on-a-collision-course-with-EU.html
| Quote: |
Ireland's new government on a collision course with EU
Exit polls and early tallies from Ireland's general election heralded political annihilation for Fianna Fail (FF), the party which has ruled Ireland for more than 60 years of the Irish Republic's eight decades of independence.
The unprecedented and historic defeat, Fianna Fail's worst result in 85 years, makes the Irish government the first eurozone administration to be punished by voters in the aftermath of the EU's debt crisis. Voter turn-out was exceptionally high at more than 70 per cent, indicating public anger at the government and the EU.
Late last year, Ireland was forced to accept a �72 billion EU-IMF bailout to cover huge public debts that were ran up to save failed Irish banks.
The bail-out was designed to prevent financial contagion that threatened the existence of the euro, but according to economic forecasts, the cost of servicing Irish bank debt and the EU-IMF bank loans will consume 85 per cent of Ireland's income tax revenue by 2012, a burden that a majority of voters find intolerable.
...
The cost of the EU-IMF bailout in extra taxes for an average Irish family has been estimated at over �3,900 a year. Other deeply unpopular measures include controversial reductions to the minimum wage, unprecedented cuts to public services and 90,000 jobs losses in a country where unemployment is already running at almost 14 per cent.
...
Both Mr Kenny and Eamonn Gilmore, Labour's leader, have promised Irish voters that they will renegotiate the EU-IMF austerity programme to reduce the burden for taxpayers and to force financial investors to shoulder some of the bank debts currently paid out of the public purse.
...
Chancellor Merkel will tell Mr Kenny that if he wants to reduce the high, punitive 5.8 per cent interest rate charged on EU loans then Ireland will have to give up its low corporate tax rates - a measure regarded as vital to Ireland's recovery and one of the few economic policies it has not yet handed over to Brussels or Frankfurt.
The new Irish premier will also be warned that there is no question of forcing privately-owned financial institutions to assume Ireland's �85 billion bank debts because the resulting market panic would spread to Germany and France, tearing the euro single currency apart.
As Irish voters headed for the polling booths on Friday, the European Commission bluntly declared that the terms of the EU-IMF bailout "must be applied" whatever the will of Ireland's people or regardless of any change of government.
"It's an agreement between the EU and the Republic of Ireland, it's not an agreement between an institution and a particular government," said a Brussels spokesman.
A European diplomat, from a large eurozone country, told The Sunday Telegraph that "the more the Irish make a big deal about renegotiation in public, the more attitudes will harden".
"It is not even take it or leave it. It's done. Ireland's only role in this now is to implement the programme agreed with the EU, IMF and European Central Bank. Irish voters are not a party in this process, whatever they have been told," said the diplomat.
...
"We have to re-negotiate everything," he said. "Obviously, the first way to do this is to make them aware that if they force us to pay everything, we will default and they will get nothing. So they had better get a little bit of something, than all of nothing. To make this financial pill easier to swallow, we must take the initiative politically. We can do this via a referendum.
|
I can't believe the arrogance of the EU diplomats. The EU did not bailout Ireland. It bailed out EU banks and intend Irish citizens to pay for it. |
|
| Back to top |
|
 |
morrisonhotel
Joined: 18 Jul 2009
Location: Gyeonggi-do
|
| Posted: Sun Feb 27, 2011 7:59 pm Post subject: |
|
|
| Oh, how the mighty have fallen. It pleases me no end, after hearing years of Irish smugness about the robustness of their economy, to watch Ireland fall apart. |
|
| Back to top |
|
|
Fox
Joined: 04 Mar 2009
|
| Posted: Sun Feb 27, 2011 8:35 pm Post subject: |
|
|
| These guys from the EU sound like thugs working for a loan shark. |
|
| Back to top |
|
|
blade
Joined: 30 Jun 2007
|
| Posted: Mon Feb 28, 2011 2:37 am Post subject: |
|
|
I have series doubts about Enda Kenny's ability to change anything. Fine Gael (blue shirts) are just another center right party not all that different from Fianna Fail. Their big idea seems to basically be about cutting back on the number of workers (not in itself a bad idea) in order to continue to pay back the bondholders of all the private debt the EU is expecting the country to honour. The Irish Labour party itself could be said to be more right than left is not much different from FG either.
That said, the large number of new independent members of parliament and Sinn Fein party should at least help focus the minds of the incoming government. |
|
| Back to top |
|
|
goniff
Joined: 31 Dec 2007
|
| Posted: Mon Feb 28, 2011 4:57 am Post subject: |
|
|
i hope the eu realizes it's never going to see any of this loan, let alone the "interest"
eire is skint, kaput, financially embarrassed...
what is ireland going to offer as collateral
the blarney stone? |
|
| Back to top |
|
|
Madigan
Joined: 15 Oct 2010
|
| Posted: Mon Feb 28, 2011 8:23 am Post subject: |
|
|
From the OP's article:
| Quote: |
The new Irish premier will also be warned that there is no question of forcing privately-owned financial institutions to assume Ireland's �85 billion bank debts because the resulting market panic would spread to Germany and France, tearing the euro single currency apart.
As Irish voters headed for the polling booths on Friday, the European Commission bluntly declared that the terms of the EU-IMF bailout "must be applied" whatever the will of Ireland's people or regardless of any change of government. |
So much for democracy and self-determination, eh? Although, I think it would be pretty funny if the new Irish government decided to restructure the debt in such a way that the government would only pay back the banks 1 Euro per year until the debt was paid. |
|
| Back to top |
|
|
comm
Joined: 22 Jun 2010
|
| Posted: Mon Feb 28, 2011 9:55 am Post subject: |
|
|
| Madigan wrote: |
From the OP's article:
| Quote: |
| As Irish voters headed for the polling booths on Friday, the European Commission bluntly declared that the terms of the EU-IMF bailout "must be applied" whatever the will of Ireland's people or regardless of any change of government. |
So much for democracy and self-determination, eh? Although, I think it would be pretty funny if the new Irish government decided to restructure the debt in such a way that the government would only pay back the banks 1 Euro per year until the debt was paid. |
Hehe... silly Ireland, welcome to slavery under the EU. |
|
| Back to top |
|
|
rollo
Joined: 10 May 2006
Location: China
|
| Posted: Mon Feb 28, 2011 1:21 pm Post subject: |
|
|
The lack of mobility in the E.U. was always the problem. In the U.s. if jobs disappear in one part of the country you just move to another part, same in Canada , no problem same language, culture. but in the in the E.U. not as easy.
Ireland will default on at least part of this debt. I think loan shark is the correct in this case when describing the banks |
|
| Back to top |
|
|
ulsanchris
Joined: 19 Jun 2003
Location: take a wild guess
|
| Posted: Mon Feb 28, 2011 8:19 pm Post subject: |
|
|
| Quote: |
The lack of mobility in the E.U. was always the problem. In the U.s. if jobs disappear in one part of the country you just move to another part, same in Canada , no problem same language, culture. but in the in the E.U. not as easy.
|
Not so for the past recession in the US. The rise of the working couple often means that one partner can find work while the other can't. As you can imagine the above makes mobility much more difficult. Also since housing prices fell people are unable or unwilling to move. These to issues have helped to undermine the dynamism of the US labour mobility. |
|
| Back to top |
|
|
blade
Joined: 30 Jun 2007
|
| Posted: Mon Feb 28, 2011 8:40 pm Post subject: |
|
|
| rollo wrote: |
The lack of mobility in the E.U. was always the problem. In the U.s. if jobs disappear in one part of the country you just move to another part, same in Canada , no problem same language, culture. but in the in the E.U. not as easy.
Ireland will default on at least part of this debt. I think loan shark is the correct in this case when describing the banks |
The Irish are quite mobile, in fact 100,000 Irish will leave this year alone. The Irish political class has always counted on Irish people to immigrate and not upset things to much for them.
Brian Lenihan senior (the late father of the current minister of finance) on emigration; "sure we can't all live on a small island." |
|
| Back to top |
|
|
rollo
Joined: 10 May 2006
Location: China
|
| Posted: Tue Mar 01, 2011 12:54 pm Post subject: |
|
|
So if Greece as an example had a lot of jobs it would be easy for the Irish to move to Greece, easily learn the language and adapt to the culture?
When the Euro was first being discussed the issue of mobility was raised and according to some they suppressed that argument quite forcibly and continued on.
Anyway Ireland is in for a long tough time. |
|
| Back to top |
|
|
bucheon bum
Joined: 16 Jan 2003
|
| Posted: Tue Mar 01, 2011 12:56 pm Post subject: |
|
|
| rollo wrote: |
So if Greece as an example had a lot of jobs it would be easy for the Irish to move to Greece, easily learn the language and adapt to the culture?
When the Euro was first being discussed the issue of mobility was raised and according to some they suppressed that argument quite forcibly and continued on.
Anyway Ireland is in for a long tough time. |
I think he was thinking more along the lines of the UK and other English speaking countries such as Canada and Australia. |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Tue Mar 01, 2011 1:03 pm Post subject: |
|
|
| rollo wrote: |
Anyway Ireland is in for a long tough time. |
It doesn't have to be. It can copy Iceland.
I've used the band-aid analogy many times. Do you want to pull it off fast or slow. Either way it is coming off, and either way it is going to hurt. I say just rip it off (default) and get it over with.
What's the EU going to do? Invade? |
|
| Back to top |
|
|
NohopeSeriously
Joined: 17 Jan 2011
Location: The Christian Right-Wing Educational Republic of Korea
|
| Posted: Wed Mar 02, 2011 1:06 am Post subject: |
|
|
| Obvious. The Euro is going down the drain. |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Wed Mar 02, 2011 5:58 am Post subject: |
|
|
| NohopeSeriously wrote: |
| Obvious. The Euro is going down the drain. |
The Euro may be a more viable long term project if some of the smaller states exit it.
...
http://www.telegraph.co.uk/finance/economics/8355703/German-Irish-brinkmanship-raises-EMU-stakes.html
| Quote: |
Ireland's new leader Enda Kenny faces a daunting task as he tries to change the terms of his country's �67bn (�57bn) EU-IMF package, either by cutting the penal rate of interest or changing the remit of the rescue fund to help Ireland claw its way out of a debt trap.
...
Mr Redeker said the EU's new criteria for bank stress tests to be agreed this week adds another risk. If the tests are seen as a sham, like last time, they will sap confidence: If too tough, they will revive fears over the capital levels of weaker lenders.
...
"We think the peripheral countries would suffer most. Spain, Greece, and Portugal face a double whammy since they have no room to offset the oil shock by slowing the pace of fiscal consolidation," said the author, Marie Diron. Oil at $150 would tip the eurozone back into recession, with the risk of cross-border bank contagion and default by at least one country.
German finance minister Wolfgang Schauble is hoping for a "grand bargain" in which weaker EMU states agree to stringent discipline in exchange for a boost to the bail-out fund, hoping this will assuage critics at home.
However, Germany's plans for budget vetting and intrusive reforms set off a storm at an EU leaders dinner earlier this month, with some calling it a diktat that trampled on sovereign prerogatives. Mr Schauble has dug in his heels, insisting that "the German government is not willing to make any compromise on this issue."
The European Commission has sought to defuse the crisis by drafting its own compromise plan, but any dilution will inflame critics in Germany. Bundesbank chief Axel Weber has already attacked the EU proposals for a more 'pro-active' rescue fund as a move to eurobonds "through the back door", shifting debt costs onto EU taxpayers.
If anything, hard-liners are gaining strength in Germany, Holland, and Finland, where the eurosceptic True Finn party is surging in polls. All three states oppose a cut in the penal rate on bail-out packages, fearing moral hazard and the risk that others will be tempted to tap the fund.
Ireland is paying 5.9pc on the EU chunk of its loans, far above the EU funding cost of 2.6pc. Jens Larsen, Europe strategist at RBC and a former IMF director, said the policy makes no sense.
"This shouldn't be a mechanism to punish countries, but to help them turn around the ship. I think a 4pc rate would be reasonable. But what matters most is giving the European Financial Stability Facility a wider remit so that it can intervene in secondary bond markets. If there is no deal, we could see renewed contagion," he said.
Andreas Rees, Unicredit's Europe economist, said Ireland should have "no problem" paying 5.9pc. This rate lifts Irish debt service costs to 4pc of GDP, compared to 10pc in the 1980s.
Mr Kenny's problem is that this hawkish view reflects broad German opinion. His other problem is what happens as recovery pushes up bond yields across the board, lifting rates on Ireland's loan package pari passu.
His trump card is to threaten 'haircuts' on senior bank creditors if the EU refuses to compromise, a move that might set off EMU-wide contagion and inflict big losses on German Landesbanken. To play to such a card would enrage Europe, but not to play it might test patience of an aggrieved Irish nation. |
The major EU banks continue to be on life support (meaning they're completely and utterly insolvent) and a small breeze could lead to another banking crisis, which every analyst I respect says is coming in the next year or two anyways. This will mean more pressure on states to bail them out and more pressure for these states to borrow to pay for the bailouts and more rage from the citizens.
The less democratic the EU is the more likely the EU will survive in present form. If the people are given a choice between grinding austerity or sovereign default/devaluation some states will leave the Euro. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
