Sunday Telegraph on Ireland's banking declarations

Aug 6, 2007
Why we need to follow the Irish and restructure our 'zombie' banks - Telegraph

A lot of the reason Ireland's new headline fiscal numbers look so bad is that they're far more honest than equivalent data being presented elsewhere – in the UK, for instance.

Having said that, because Ireland has large cash balances in its National Pension Reserve Fund – net government debt will actually be around 70pc of GDP, not much more than in the UK. Consider, also, that in contrast to Ireland, the vast majority of Britain's massive public sector pension liabilities are unfunded and off-balance sheet.

Ireland's annual deficit figure – projected to balloon to 32pc of GDP – also warrants examination. This number actually includes the cost of the bank bail-outs, unlike its UK equivalent. Labour buried the cost of the RBS and Lloyds capital injections, not including them in the published deficit figures, a convention the Tories look set to continue. If Ireland followed the same methodology, its 2010 deficit would be 11pc of GDP, similar to the UK.

British ministers argue that bail-outs are "financial transactions" from which the government may eventually reap a return. So they shouldn't be included in the deficit. Such a position not only undermines the UK Government's fiscal credibility – effectively "banking" a return before it has been made. It also means the UK Government is petrified of taking the necessary steps to force banks to disclose their smouldering off balance-sheet liabilities, write-off losses and engage in root-and-branch restructuring – as that would cause the public finances to collapse.

But, by revealing the banking sectors' vast losses and outlining a credible plan to fund them, the Irish have taken a step that others have not yet taken.
Interesting take from Liam Halligan in Sunday Telegraph on Ireland's declaration last week on Bank liabilities.

Funny how its being overlooked.


Well-known member
Feb 28, 2008
seems a bit pointless

Ireland is in the Eurozone and therefore subject to the rules of same (e.g. recognising banking recaps upfront and playing by the stability act rules)

the UK isn't and can do whatever it likes, including devaluing its currency to near-zero (which is what they're busily engaged in)

so you're comparing apples with oranges for no real purposes bar filling a few column inches!


Well-known member
Oct 13, 2008
I do think it's grossly unfair that Eurozone members are supposed to compete on a totally open-market basis with the likes of the UK who can just devalue at will.

Why do they have full access to the EU single market, without any disadvantages or responsibilities while the rest of us are bound by Eurozone fiscal controls.

It's a ridiculous 'system'

The Germans are all freaking out over our corporation tax while there's a HUGE set of elephants in the room i.e. UK, Denmark, Sweden, most of Eastern Europe and also strange access to market agreements with Norway and Switzerland!

To me it'd be nearly like the US allowing Mexico and Canada to have open access to its internal market without any restrictions.

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