The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[INDIANA]

I most humbly apologise to the great patriots like Seanie Fitzpatrick, Seanie Dunne,Mickeen Fingleton and the others who were saving the Country from ............ourselves probably.
Indiana ... that Financial Non Regulator and the Revenue did what their Government masters told them to. Light touch regulation as the neo liberal right wing economists call it.
And it isnt the working classes private or public  who are getting bailed out by Lenihan ...its the Banker and Developer cnuts.
Q E D.

Bullshit they did neither. They abdicated their responsibilities as much as anyone in the private sector did. There no directives handed down to the Financial Regulator from the Government because we had no financial regulation. Do you honestly think FF wanted financial regulation when they were neck deep in their own property deals? No there was plenty of scope for a competent individual in that organisation to implement and come up with policy. they chose not to do so and took their 6 figure salaries and pensions.
Thats the Irish Public Sector in a nutshell. Unfortunately in this country we had neither a competent public or private sector.

[mayogodhelpus@gmail.com]

Rossfan you didn't answer my question, did you vote for Fianna Fail?

[Rossfan]

Not that it's any of your business but anyway ...
1997 voted FF
2002 voted Ming and everyone else on paper except FF/PD( we were in with Longford where there was a PD)
2007 Green/SF/Feighan(Blueshirt but a sound lad)

from Indiana ..."took their 6 figure salaries and pensions.
Thats the Irish Public Sector in a nutshell. "

I think you'll find the vast vast majority never get near 6 figure sums or pensions.
But you're right as regards Financial (non)Regulators  and while I'm at it ..why the fcuk do we need a Central Bank when we havent got a currency any more ?
Surely that should have been abolished in 2002 ..another place with a good proportion of 6 figure earners.
So we now have maybe 250,000 households in "negative equity" with loans that will take 2 or 3 generations to pay off but no bailout for them.
Meanwhile the Financial non regulator,the Governor of the Central Bank,Ahern,McCreevy a,Fingleton and Fitzpatrick (to name a few) can swan around on their money and to hell with the poor fools they landed in it.

[muppet]

Might not be popular but I agree with McWilliams. Revenge for cross-border shopping.

http://www.sbpost.ie/commentandanalysis/lets-grab-this-golden-chance-46188.html

Let's grab this golden chance
13 December 2009 By David McWilliams

If I had the ear of finance minister Brian Lenihan, I'd be telling him not to look a gift horse in the mouth. The British government has this week handed Ireland a gilt-edged opportunity to kick-start the battered IFSC and, with it, the fortunes of thousands of young Irish graduates and workers.

Last Wednesday, the British chancellor, yielding to popular pressure for revenge, announced he would tax the bonuses of high-flying investment bankers. He announced a 50 per cent tax on any bonus over £25,000.This, for most mere mortals, would seem nothing to grumble about until you see what the reality is for those bankers.

When you consider that for the 5,000-odd Goldman Sachs employees in London, the average pay - of which bonuses are the most significant proportion - is »500,000 a year, you can see how this 'super-tax' will make them nervous.

While it's easy to understand the British government's motives, particularly as the bankers are unrepentant about their role in last year's collapse of the global economy, the result is that these bankers will simply look to leave London.

These are the most footloose of all workers; their capital is their contact book and their bank's balance sheet their armoury. They will move to wherever the feel they can work and make money.

Whether you like them or not, these are an asset that many countries can ill-afford to ignore. That is why Luxembourg, Ireland, Dubai, Singapore and, of course, Switzerland have been trying to make sure that financial services are part of the country's industrial infrastructure.

The British government has given us an opportunity like the one presented to us when Intel, Microsoft and Pfizer were looking for a place to locate outside the United States in the 1990s.They chose Ireland for tax purposes and for the quality and availability of the workforce.

It was 'win-win' for us, as we had no real multinational industry so we got all the benefits; we got jobs we didn't have before, tax revenue we didn't have before, and spending we didn't have before.

Now, quite feasibly, we could do the same again, because investment bankers - the ones which drive the economy of London - are the targets of the Labour government. We could be their port in a storm.

The Minister for Finance should seize the opportunity and get on the phone to the head of Goldman Sachs and JP Morgan and tell them that Dublin welcomes them and is open for their business. God knows we need a bit of luck and now is our chance to grab it. But why would a big investment bank come here to Ireland? Apart from the fact that its senior employees were about to jump ship because of taxation, what other reasons could there be to come here?

First, in a 24-hour trading business, Ireland shares the same time zone as London and therefore acts as a platform to bridge the Asian markets, which open during our evening, and the American markets, which open during our afternoon.

Second, we have a huge oversupply of commercial office space in Dublin. Any incoming bank could get great property deals, which - among other things - could save us putting these properties into Nama. Equally, we have good links to Europe and the US. God knows Aer Lingus needs some regular business passengers. Ryanair would welcome the challenge too.

The IFSC has the technological infrastructure. The same language helps enormously for employees wanting to move here with the minimum of hassle. Third, the 12.5 per cent corporation tax is attractive for a large investment bank.

While our tax rates will rise this year and next, income tax in Britain before the 'bonus tax' for bankers will also be high. Fourth, Dublin and Ireland offers international investment bankers a good quality of life, good schools and a government that is not targeting them exclusively. Why wouldn't they move here?

Let's look at this from our side of the deal. For us, it looks like a 'win-win' outcome. Think about tax alone. In Britain, financial services companies constitute 25 per cent of total corporation tax. This is a figure of £11 billion.

This obviously doesn't include the huge amount of tax the employees of these companies pay in income tax, Vat and stamp duty.

For Ireland, even if we were to poach one of the giant investment banks, the contribution to our faltering tax revenue would be enormous. Equally, as we have seen with pharmaceuticals in Cork, once one big name comes to Ireland, others tend to follow. This is know as clustering in economics and it is easy to see how attracting a huge name like Goldman Sachs to Ireland could begin a process where others copy and move some, if not all, of their operation here.

When I worked in investment banking in London, in the 1990s,themajority of my colleagues were foreign. We worked with non-English clients and most of the deals we did were not in Britain but in Europe and further afield. London really only served to 'host' the industry.

Most people I worked with liked London, but if they felt the government there was out to get them they would have moved on just as easily to an adjacent English-speaking jurisdiction that was prepared to open its doors to them.

Even if we attracted 20 per cent of the business - about as much as we could manage now anyway - the positives would be enormous. Just think of the prospects of our own workers who are now waiting in our zombie banks for the horrible but inevitable chat with the boss. Because of the stupidity of their top brass, Irish banks expanded rapidly, fuelled only by an unsustainable increase in property. Now many thousands will be laid off as the banks contract.

Where are they going to go? Where are they going to use their skills, if not in new banks that might come into Ireland? This is the opportunity and the IFSC, with its new Luas link, provides a fantastic and obvious home for these highly-motivated foreign bankers. The more of them we have, the more they will need to employ local people with banking acumen. Off we would go on a virtuous circle. This is our chance to do what Brian Lenihan calls our ''patriotic duty''.

''England's difficulty, Ireland's opportunity'' - wasn't that what the forefathers of Fianna Fáil used to say?

After all, if the British government is prepared to entice our shoppers to Sainsburys in Newry, then we should be prepared to poach their bankers for the IFSC in Dublin.

David McWilliams's new book, Follow the Money, is out now

[bcarrier]

My reading of the UK banking supertax is that it is levied on the " bonus pool" and collected from the company. I dont know how it will be implemented but it would not surprise me if bonuses still get paid at original levels to the individuals with tax burden effectively being picdked up as additional corporation tax and therefore borne by shareholders . It would make it pretty circular for the banks with a large % of state ownership ( in particular RBS ). 

I am all for cutting taxes to increase tax take...

http://en.wikipedia.org/wiki/Laffer_curve

[muppet]

Not much being said about this but the Irish banks have been on a major slide again recently.

Look at the last 3 months for AIB:



And Bank of Ireland:

[Billys Boots]

Did anyone notice that one of the lads who facilitated Ray Burke's rape of the people of Fingal is now on the board of Nama.  That plan has no chance of working now.

[INDIANA]

My reading of the UK banking supertax is that it is levied on the " bonus pool" and collected from the company. I dont know how it will be implemented but it would not surprise me if bonuses still get paid at original levels to the individuals with tax burden effectively being picdked up as additional corporation tax and therefore borne by shareholders . It would make it pretty circular for the banks with a large % of state ownership ( in particular RBS ). 

I am all for cutting taxes to increase tax take...

http://en.wikipedia.org/wiki/Laffer_curve

Nope its Income Tax not Corp Tax. The British Govt wants the banks to rebuild their capital.Implementing a CT hit on this would negate that process. But its only a once off tax from what i know. It doesn't apply after one year. So I'm not sure there will be any real benefits

[Zapatista]

http://www.youtube.com/watch?v=Suxn3gbcF6A&feature=SeriesPlayList&p=186C1151D9444473

[muppet]

Not much being said about this but the Irish banks have been on a major slide again recently.

Look at the last 3 months for AIB:



And Bank of Ireland:

http://www.breakingnews.ie/business/eymhsngbsnid/

Report: Govt taking major stake in banks

27/12/2009 - 10:31:51

The Government is reportedly preparing to take a significant stake in both AIB and Bank of Ireland.

According to the Sunday Business Post, it will do this by converting some of it's preference shares in the banks into ordinary shares.

The move is expected in the New Year as part of a programme to recapitalise the two main banks.

Read more: http://www.breakingnews.ie/business/eymhsngbsnid/#ixzz0atnnq7AQ

[INDIANA]

should inspire international confidence anyway.

[muppet]

should inspire international confidence anyway.

This is beginning to look like the proverbial good money after bad. The problem with international markets is that the more the government own the less likely any investor is to come on board.

I think we are nationalising these banks as slowly as we possibly can when it was what we should have done right at the start of the crisis.

BTW one of these banks declined a credit card to some one I know recently. This individual earns a multiple of the minimum wage, has 5 years left on their mortgage (having never missed a payment) and has a clean credit history (doesn't even have a car loan). It could be an error but if not I wouldn't be hopeful for that bank's chances.

[INDIANA]

I agree - we should have done this right at the beginning. But thats 3 banks now nationalised and any chance now of significant investment from other banks, private equity or venture capitalists has now gone really- certainly for the next 12 months. we're putting money into Anglo which has no chance of ever operating as a bank again. Should have closed it down. Complete waste of resources.

I'm not surprised on the credit card story- there are significant reposessions taking place in Dublin at present. Just ordinary Joe Soaps who are stretched completely. I think a lot of Irish Banks haven't a pot to piss in. One wonders just how much this going to cost the Irish taxpayer for the end.

[muppet]

I agree - we should have done this right at the beginning. But thats 3 banks now nationalised and any chance now of significant investment from other banks, private equity or venture capitalists has now gone really- certainly for the next 12 months. we're putting money into Anglo which has no chance of ever operating as a bank again. Should have closed it down. Complete waste of resources.

I'm not surprised on the credit card story- there are significant reposessions taking place in Dublin at present. Just ordinary Joe Soaps who are stretched completely. I think a lot of Irish Banks haven't a pot to piss in. One wonders just how much this going to cost the Irish taxpayer for the end.

That more than anything is the scary bit. We will spend a lot more on the banks next year than we saved in the budget. Don't get me wrong we need to save in the budget but it is very hard to persuade people to accept cuts when every penny is going to shore up banks that no one seems accountable for, who won't lend and who are actively evicting people.

[orangeman]

Time for another amnesty Or would the cupboard be bare ? The Italians have done well with their latest amnesty.



Italian tax amnesty raises 95bn euros 

The amnesty provides Berlusconi's government with a 5bn euro windfall
Italy has raised 95bn euros (£86bn;$137bn) from a tax amnesty, much more than the government had expected.


According to the country's finance ministry, 98% of the illegally-held overseas money has been repatriated.

The amnesty caused a spat with Switzerland after Rome claimed the Swiss government was refusing to cooperate with the tax crackdown.

Switzerland then demanded that Italy explain why police and tax inspectors raided dozens of Swiss banks in Italy.

In Tuesday's statement the ministry said "the time of tax havens has finished forever. To place or keep money in tax havens is no longer convenient, neither in economic nor in tax terms. The returns are small, the risk is high."

The amnesty has now been extended until the end of April.

The move provided a boost for Italy's banking industry - with the money flowing into small and medium size banks.

The government will get a 5bn euro windfall from the amnesty. It will be spent helping to strengthen the economy, which came out of recession in the third quarter of this year.