Should we be shopping around for our bailout?

Keith-M

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As now widely reported, it appears that our government are in preiminary discussions with the EU leaders on tapping into their emergency funds, which were previously used to rescue Greece, earlier this year. The question I want to pose is if we should be shopping around for a better deal. Any EU bailout is likely to come with a lot of pre-conditions on things like increasing our levels of corportation tax, thus throwing a huge question ovr existing multi-national investments i this country and limiting our attractiveness for future FDI opportunities.

Would we not be better going to the IMF, who already have widespread experience of these kind of bailouts and who would have no restrictions on forcing us nto line with the rest of the EU? The immediate pill be be harder to take (cuts in welfare and the public service) but the longer term impact would be better for us.
 


TradCat

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Makes sense. We should at least bluff that we might do it if they can muster the backbone to actually do it. Why not talk to China too? They are rolling in cash.
 

cjudge

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Keith-M - I agree with you - it makes absolute sense to shop around. The conditions attaching to any bailout from the EFSF are likely to be much more restrictive. Then again, maybe we could look to the mysterious 'Foundation X' whose enormous wealth has been offered to the UK to sort out their financial difficulties -
[ame=http://www.youtube.com/watch?v=QaA-5_IjkeE]YouTube - Lord James of Blackheath, Speech on Foundation X (House of Lords, 01/11/2010)[/ame]
 

cry freedom

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As now widely reported, it appears that our government are in preiminary discussions with the EU leaders on tapping into their emergency funds, which were previously used to rescue Greece, earlier this year. The question I want to pose is if we should be shopping around for a better deal. Any EU bailout is likely to come with a lot of pre-conditions on things like increasing our levels of corportation tax, thus throwing a huge question ovr existing multi-national investments i this country and limiting our attractiveness for future FDI opportunities.

Would we not be better going to the IMF, who already have widespread experience of these kind of bailouts and who would have no restrictions on forcing us nto line with the rest of the EU? The immediate pill be be harder to take (cuts in welfare and the public service) but the longer term impact would be better for us.
I would plump for the IMF in preference too.
The only trouble being that they, [as I understand it] will not micro manage the Irish economy. In simple terms they will arrive at Dublin Airport with a suitcase of cash and say to the usual goons , "There you are, thats all there is, sort it out among yourselves!
You know where the cash will go if FF get their hands on it. First stop a hospital in Kerry or some such nonsense.
 

Congalltee

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What will the Chinese offer us?
(I would much prefer if a new government was the one negotiating with the EU, IMF of whoever can put forward the least worst deal.
 

Keith-M

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You only "shop around" from a position of strength.:rolleyes::rolleyes::rolleyes:

The bailout isn't going to be free money. We'll be paying interest, no matter who we borrow from. That's one consideration when we look at where we should go, but it's far from the only one. The EU and the IMF/WB are two. China (already mentioned above) is already loaning to other countries. There ARE options, but going on the record of our government, they'll probably choose the easiest and worst one.
 

bprob

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You only "shop around" from a position of strength.:rolleyes::rolleyes::rolleyes:
The bailout isn't going to be free money. We'll be paying interest, no matter who we borrow from. That's one consideration when we look at where we should go, but it's far from the only one. The EU and the IMF/WB are two. China (already mentioned above) is already loaning to other countries. There ARE options, but going on the record of our government, they'll probably choose the easiest and worst one.
the irony is that we are so weak, and could potentially cause so much knock-on harm to french and german banks and so much added pressure on portuguese, spanish and italian bond rates, that we are in a somewhat stronger bargaining position!!

maybe we could sell shannon to the chinese?:rolleyes:
 

adrem

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We have to stop allowing the media spin determine our course of action. There is no need for us to use the EU bailout fund. We don't need to utilise the bond markets until next summer at the earliest.

We have to look at the reality of the current situation. The yields on bonds IN THE SECONDARY MARKET are elevated - why? Is it because there is a real belief that we will default on our debt? Come off it - our fiscal position is bad but there are other messes out there too - the UK and the US GGD numbers are pretty scary. So really - does the market think we are actually going to default?? I don't think so.

There is a broader picture that needs to be looked at - a currency "war" between the G20 nations, Merkel under political pressure at home over the Greek bailout costs. On the currency front - it costs an awful lot less to buy up CDS on Irish debt (this is a proxy for the measure of risk associated with Irish debt) than it does to tackle the EURO head on - but the end result is similar.

Realistically - IF the ECB, Germany, France, G20 really wanted to push down the yields on Irish debt they could do so in the morning with. Announce a 1bn per week purchase of Irish bonds starting on Monday. Yields would drop to about half the current levels. They could do that in the morning and it would immediately resolve the issue.

What about domestically? Could we fix this ourselves? What if there was an announcement from the Irish fund managers that they are going to swap German debt for Irish debt (c 20bn in total here) - crisis over.

In any event the govt needs to stick to its guns on this - we don't need the bailout fund and we shouldn't be forced into it. Get the budget done, get the finance act passed and then move on into the election in the late spring early summer.
 

Panopticon

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The European option is EU/IMF anyway.

The IMF would increase corporation tax anyway.

Not much difference between the two.
 

sport02

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The European option is EU/IMF anyway.

The IMF would increase corporation tax anyway.

Not much difference between the two.

The panel on Newstalk this morning were making the arguement that the IMF is more inclined to favour a low corporation tax rate.
We may even get a slightly smaller interest rate with the IMF, than the EU.
It would be greater pain, but over a shorter period of time.
 

Lord Muck Savage

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Would we not be better going to the IMF, who already have widespread experience of these kind of bailouts and who would have no restrictions on forcing us nto line with the rest of the EU? The immediate pill be be harder to take (cuts in welfare and the public service) but the longer term impact would be better for us.
We don't really need to go to the EU or the IMF, what we can do is entertain the novelty of living within our means.
There's enough wealth generated in the economy to enable everybody to survive comfortably, however there's not enough wealth to facilitate greed. No country, not even the rich industrial nations of Europe can afford to pay their nurses, teachers, doctors, civil servants etc the excessive amounts that Irish public sector workers demand.
The only reason for further borrowing is to maintain a lifestyle that people have become accustomed to and it’s leading us all to utter ruin.

What the EU and IMF can do however is to take over the management of the country and implement the necessary reforms. The low calibre ruling establishment that we’re lumbered with are simply not up to the task. Indeed the recent Croak Park Agreement illustrated that perfectly. Government, those in control, those who run the show and their respective trade unions gathered together and hammered out a deal to save themselves (the most protected in society) from any future austerity measures, the interests of the wider community did not enter into the equation. What an appalling un-equable way to run any society
We need proper government and good management of the economy not yet more dept that will cripple us forever. If sovereignty has to be surrendered, so be it.
 

Catalpa

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Look folks we don't absolutely need a bailout.

We need to cut our expenditure down to a sane level.

Without the ability to borrow and + NO Bailout then that is going to be so hard it will hurt.:cry:

But spread the pain across all sectors and we can do it.

I mean that really really means a whole lotta pain for all of us but at the end of day we will be over it.

We should do a temporary Default and tell the Institutions we owe money to that they will get it back

- as soon as we are in a position to repay.

That will concentrate their minds wonderfully on ensuring we are in that position as soon as possible!;)
 

Lord Muck Savage

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Look folks we don't absolutely need a bailout.

We need to cut our expenditure down to a sane level.

But spread the pain across all sectors and we can do it.

I mean that really really means a whole lotta pain for all of us but at the end of day we will be over it.
Problem is, Irish society is not quite mature enough to entertain those options, especially the better off sectors. They have become accustomed to a high lifestyle and hence reluctant to make the necessary adjustments, they also harbour the silly notion that they’re immune from any austerity measures.
This society has not really progressed in any altruistic sense since the so-called famine of the 1840’s; in common with that period it’s everybody for themselves, there’s still no sense of national collective responsibility.
Because of gross dissatisfaction with the Irish Parliament in 1801 the London Imperial Parliament felt obliged to disband it, History is repeating itself, although the Dail may not be disbanded, its ruinous power and influence over the Irish State needs to be curtailed, hence the need for outside intervention and governance
 

kinne

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Have been browsing this site two weeks now and signed to get some basic info. Why do we need a bailout ? What is the total of our national debt now and what is it expected to reach by end 2011 ? Why are we hounded when national debt is a fraction of many other countries ? Budget deficit can be balanced within 4 years with some pain and we all know there are ways and means to do so that will not destroy the economy so why are we so upset with a bit of pain for a few years ? Why are we reluctant to go to the ECB and demand funds at reasonable rates when it was the ECB that opened up the crazy credit splurge and low interest rates ? Seems to me the word bailout should be "cough up" and erase your blunders MR ECB
 

Keith-M

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Look folks we don't absolutely need a bailout.

We need to cut our expenditure down to a sane level.
Or to paraphrase, huge cuts in health, welfare and the public sector wage bill (the three biggest elements of spending). While it may be the right think to do, no party will admit it, let alone put it to the people.
 

Lord Muck Savage

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Or to paraphrase, huge cuts in health, welfare and the public sector wage bill (the three biggest elements of spending). While it may be the right think to do, no party will admit it, let alone put it to the people.
Obviously none of the established parties will tackle the issue, it's not in their interest to do so. As regard the national interest? frankly they could not care less.
But we can rest assured that the Germans will do it for them and for our sake put things to right.
 


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