Irish Economy and Budget Watch / / /Emergency Budget Announced for April 7th

The restructuring is happening however and that is a positive feature.

Ard-Taoiseach wrote:

The restructuring is happening however and that is a positive feature.

What restructuring - the collapsing together into a consolidated banking sector?? Don't we need solid regulation, audits, alignment with the EU on money and prices? Or an attempt at the latter? Surely you too don't subscribe to the belief that we've lost our monetary control because we have no punt now and all that? There are surely ways to get around a high or low interest rate if it suits us do go around.

Restructuring - maybe some of this is akin to a polar landmass-worth of ice melting...

Maybe they could take a 20% cut in expenses too.

Quote :

A cut of 10pc in Cabinet ministers' salaries is expected to be part of a series of pay freezes and cutbacks in public sector wages announced in tomorrow's Budget.

The Irish Independent has learned that a decision on ministers' salaries was taken at last Tuesday's Cabinet meeting.

It is understood it followed a discussion among ministers about their responsibility to set an example to other high earners in the public sector.

It has also led to speculation that the 1,600 highest earners in the civil and public service, given a 7.3pc wage hike last year, face a prolonged wage freeze.

Cabinet to take wage cut of 10pc in Budget blitz on pay

Auditor #9 wrote:

Ard-Taoiseach wrote:

The restructuring is happening however and that is a positive feature.

What restructuring - the collapsing together into a consolidated banking sector?? Don't we need solid regulation, audits, alignment with the EU on money and prices? Or an attempt at the latter? Surely you too don't subscribe to the belief that we've lost our monetary control because we have no punt now and all that? There are surely ways to get around a high or low interest rate if it suits us do go around.

Restructuring - maybe some of this is akin to a polar landmass-worth of ice melting...

Of course we need effective regulation that is not ignored. There is an awful lot of talk about bail outs and guarantees and not enough about effective regulation and investigation. It really does need cleaned up. Day and daily I need people with clear conflicts of interest. In many professions they would be face disciplinary measures, but banking and finance, bamboo curtains and all that. Utter hogs wash.

Ofcourse you can control economies by means other than interest rates, it is called tax and the nice things about tax are;
1 It hits the sector you want to hit.
2 It does not hit people who are the most vunerable in society and are heavily in debt.
3 It does not hit those who have borrowed to invest.
4 It brings money into the government that can be used on services or to pay off debt.

The control of inflation through interest rates is of course the line peddled by the financial sector and for reasons that are obvious but it is not the only means of pulling money out of circulation.

Squire wrote:

Of course we need effective regulation that is not ignored. There is an awful lot of talk about bail outs and guarantees and not enough about effective regulation and investigation. It really does need cleaned up. Day and daily I need people with clear conflicts of interest. In many professions they would be face disciplinary measures, but banking and finance, bamboo curtains and all that. Utter hogs wash.

Ofcourse you can control economies by means other than interest rates, it is called tax and the nice things about tax are;
1 It hits the sector you want to hit.
2 It does not hit people who are the most vunerable in society and are heavily in debt.
3 It does not hit those who have borrowed to invest.
4 It brings money into the government that can be used on services or to pay off debt.

The control of inflation through interest rates is of course the line peddled by the financial sector and for reasons that are obvious but it is not the only means of pulling money out of circulation.

Fair points about tax - it has the potential to even-out the clumpiness that we tend to see around capital but isn't it costly to implement some of these measures? I'm thinking we need to invest in our software infrastructure as well so as to be able to implement tax changes on the fly. This seems to be what could help us in the current climate - ability to adjust tax cheaply and flexibly so as to be able to wring out some cash in the tight times.

Investment is the other side of the equation but because no one thought to build up a surplus to take heat out in times of plenty there is no money to invest.

If I were investing it would be in the energy sector. Oil prices may dip now but once the economy recovers it will soar. Also need to invest in alternatives for metals such as copper!

Squire wrote:

Investment is the other side of the equation but because no one thought to build up a surplus to take heat out in times of plenty there is no money to invest.

If I were investing it would be in the energy sector. Oil prices may dip now but once the economy recovers it will soar. Also need to invest in alternatives for metals such as copper!

Yeah we could be letting this one get out of sight but it'll come back and hit us before the sharks are out of the water on the subprime crisis. The low-cost loan scheme they want to introduce to boost the improvements market for home insulation could be a good start. 3% interest should be enough, I'd say even less.

Squire wrote:

Investment is the other side of the equation but because no one thought to build up a surplus to take heat out in times of plenty there is no money to invest.

If I were investing it would be in the energy sector. Oil prices may dip now but once the economy recovers it will soar. Also need to invest in alternatives for metals such as copper!

Just a point of interest maybe - countries with mineral resources that built up a surplus, just as you suggest, found that in times of trouble the IMF would not let them use it!! They were forced to take IMF loans with ferocious conditions. Stiglitz wrote about this. No encouragement to anyone to be prudent.

Cactus Flower

The IMF is one organisation that I would like to see disappear of the face of the earth. The problems they have caused for many of the poorest countries is a disgrace and the advice they give is often totally wrong.

A bit of good news for a change, Irish industrial production picks up

Furthermore, Pessimism at a four-month low in the building trade

And 150 new jobs are coming to Bray

So it's not all bad!

More good news, 200 jobs going to Limerick

God, there's nothing like a bit of good news to put a stopper on discussion eh?

I was talking about the job market today with a person who works in a dole office. More exactly, I was musing if Irish people might get some of the factory jobs that occur around Christmas time as opposed to previous years where they were not considered. Not only was I told that the Irish didn't have a chance, but many of the Eastern Europeans from EU countries wouldn't have as many opportunities as in past years. There are quite a few non-EU people being recruited at this very moment for these factory jobs.

His/her opinion was that EU workers weren't all that happy with the minimum wage any longer and they knew their rights after having been in the country so long.

How's that for job prospects for native and immigrants alike?

Also heard that Waterford is abandoning its glass manufacturing with the loss of 280 jobs and some medical supplier/manufacturer is laying off 250.

Squire wrote:

Cactus Flower

The IMF is one organisation that I would like to see disappear of the face of the earth. The problems they have caused for many of the poorest countries is a disgrace and the advice they give is often totally wrong.

You will be glad to hear, Squire, that in almost every Latin American capital nowadays, from Quito to Buenos Aires, the IMF are told in no uncertain terms to "F*** Off!" Only in US client state Colombia can they interfere in the economy to the extent they used to elsewhere in S. America. The advice they always gave was to benefit the IMF and the USA, not necessarily in that order.

I believe Latin America is worth looking closely at for a guide to see if a trend is developing there. I am talking about the development of a trading model that completely by-passes the IMF/World Bank/WTO failed model. If so, we could possibly learn something from them.

I'm wondering if these bailouts will mean the world will end up printing money? This should mean an inflationary response but could that potential inflation be offset by tax hikes and axed jobs? It could mean a sophisticated balancing act between oil price which influences so much, unemployment, hikes on other services etc. in order to keep that helicopter action from going rampant.

On Pat Kenny now they're talking about the budget and the car-parking levy of €200 per year is getting a good bit of light. It sounds like it will be mental to implement, enforce, police and is probably meant to deter people from driving into Dublin City Centre at all - it's a kind of congestion charge.

Pat Kenny feels the employer will end up paying though. One example was a city centre office with 3 car parking spaces and 14 employees. Who the hell pays?? The employer, says Pat.

Slim Buddha wrote:

Squire wrote:

Cactus Flower

The IMF is one organisation that I would like to see disappear of the face of the earth. The problems they have caused for many of the poorest countries is a disgrace and the advice they give is often totally wrong.

You will be glad to hear, Squire, that in almost every Latin American capital nowadays, from Quito to Buenos Aires, the IMF are told in no uncertain terms to "F*** Off!" Only in US client state Colombia can they interfere in the economy to the extent they used to elsewhere in S. America. The advice they always gave was to benefit the IMF and the USA, not necessarily in that order.

I believe Latin America is worth looking closely at for a guide to see if a trend is developing there. I am talking about the development of a trading model that completely by-passes the IMF/World Bank/WTO failed model. If so, we could possibly learn something from them.

Strauss-Kahn, head of the IMF, looked like he could smell fresh meat on Sunday when he was talking about global financial meltdown and offering the "help" of the IMF. Ditto the World Bank.

http://news.bbc.co.uk/1/hi/business/7665515.stm

We have to keep our eyes open for these boys and be ready to run them no matter what.

Auditor, I may have misunderstood, but I think that money is being printed in the US (also sterling and euro?) to flush into the system. Like you, I'd like to know whether of not this is the case.

Both the US and UK are enormously indebted economies.



http://news.bbc.co.uk/1/hi/business/7665515.stm

The EU Commission is starting the proces of chastising us over our budget performance. I don't know whether to be happy or sad. It could be the beginning of the end for Ireland in Europe. On the other hand the technocratic and democratically-deficient EU may just save us from our very democratically elected politicians.

** worried as well Zhou ?

Some news from the Political Economy - EU Comission to take displinary action against Ireland ...

for the state of our public finances, as reported in The Pin.

With our public finances the way they are we are in no condition to be subject to big fines. I'm wondering what the ramifications of this would/could be now ? Could this be prelude to us getting ejectulated out of the Euro ? Or is it more political noising with which to beat us over Lisbon ?

This Government has shown incompetence, an opinion soon to be official news in European politics and I fear that such a Governmental character in charge of an economy not tied to a larger bloc (and thereby having some stimulation at least in theory to follow some solid economic prescriptions) would be a seriously negative and ponderous load for a small Democracy to carry. The crony Capitalism would ruin us in a generation.

We are on the cusp of receiving interest rate cuts which would have us paying upto €150 less per month in our mortgages yet we could also be on the cusp of having a currency outside of a zone where those interest rates would apply. We'd be adrift and prey to international vultures like the Icelandic people now paying 18% interest on their mortgages ...

Zhou_Enlai wrote:

The EU Commission is starting the proces of chastising us over our budget performance. I don't know whether to be happy or sad. It could be the beginning of the end for Ireland in Europe. On the other hand the technocratic and democratically-deficient EU may just save us from our very democratically elected politicians.

Any link or news site you could direct is towards? Thx.

I shouldn't get too worried about Ireland's position in Europe. Over the next year, I expect other nation's budegts will be testing the existing rules, if some already aren't in that position now.

I do expect some spin to come out of the chastiment with regard to Lisbon. Europe needed to run Ireland's economy, for example?

Wouldn't it be kind of a blow to the Euro to expel a member nation. It would indicate to the world at large that the Euro proejct wasn't well thought out or implemented correctly. Look at Greece, ffs. They shouldn't have been in the Euro back at its launch and they shouldn't be in it now.

The budget disaster is indeed cause for worry. It's not the cuts that are the problem, per se, but the way the previous budget surpluses were mismanagned for what seems like short term political gain for the govt of the day.

Six of the best will be delivered. But like all things in modern economic society, the average wage earner will be punished in the same measure as the ruling govt, if not more so.

When a country qualifies then it will have a certain MAX budget deficit and a certain level of inflation - is it 3% as a ceiling ? When a member goes over this they are fined - didn't this happen to Portugal ?

I believe Ireland has had the biggest deficit since the Euro began and it would be more credible for the bloc to reject the Irish economy than to subsidise it for the sake of the Euro. If one of thine economies offends thee, lop it off.

Auditor #9 wrote:

** worried as well Zhou ?

Some news from the Political Economy - EU Comission to take displinary action against Ireland ...

for the state of our public finances, as reported in The Pin.

With our public finances the way they are we are in no condition to be subject to big fines. I'm wondering what the ramifications of this would/could be now ? Could this be prelude to us getting ejectulated out of the Euro ? Or is it more political noising with which to beat us over Lisbon ?

This Government has shown incompetence, an opinion soon to be official news in European politics and I fear that such a Governmental character in charge of an economy not tied to a larger bloc (and thereby having some stimulation at least in theory to follow some solid economic prescriptions) would be a seriously negative and ponderous load for a small Democracy to carry. The crony Capitalism would ruin us in a generation.

We are on the cusp of receiving interest rate cuts which would have us paying upto €150 less per month in our mortgages yet we could also be on the cusp of having a currency outside of a zone where those interest rates would apply. We'd be adrift and prey to international vultures like the Icelandic people now paying 18% interest on their mortgages ...

the germans and french breached the 3% limit a number of times, albeit not to the extent that we are about to. For confidence to remain in the Euro, I imagine that the fine should be punitive enough to be a deterrent. Obviously it hasnt been.
Will this effect the stablity of the Euro I wonder?

rockyracoon wrote:

Zhou_Enlai wrote:

The EU Commission is starting the proces of chastising us over our budget performance. I don't know whether to be happy or sad. It could be the beginning of the end for Ireland in Europe. On the other hand the technocratic and democratically-deficient EU may just save us from our very democratically elected politicians.

Any link or news site you could direct is towards? Thx.

I shouldn't get too worried about Ireland's position in Europe. Over the next year, I expect other nation's budegts will be testing the existing rules, if some already aren't in that position now.

I do expect some spin to come out of the chastiment with regard to Lisbon. Europe needed to run Ireland's economy, for example?

IT LINK:Commission takes action against Ireland over deficit

If they thought we were threatening the stability of the euro they could give us a huge fine and give us two choices:
(a) pay the fine and make the savings in public expenditure, or
(b) leave the eurozone and start swinging in the wind the way we did in the previous currency crisis.

Anything's possible. If Ireland were thrown out, so to speak, it would have to make other countries very wary of joining the Euro, no?

I have to believe it would make the Euro more volatile as the rest of the world watches such a scene unfold. Essentially, the EU would be giving the signal that the German , and to a lesser extent the French, economies were the sole underpinning of the Euros stability and that all other nation's economic activity is essentially a drag on the currency's value. Given that the French seem to be pushing for global sector currency domination of the Euro, this type of event would throw a spanner in the works.

I'm inclined to think that this budget overrun will be used as a stick to beat Lisbon through - but I'm a cynical batard.

Interesting times.

PS. If they throw us out, do we get our gold back?