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

[seafoid]

Bogball Would a squeeze on the Anglo bondholders not have been a more prudent approach from the start or even now??

Why is Leinhan seemingly so afraid of them??

I would say these latest figures mean the Croke Park deal is out the window

From the start yes, but once the guarantee was given that couldn't be done with any conviction.  We should never have had any exposure to the anglo bondholders, but now, if we try and put a squeeze on them in any way they can easily say, grand, you're defaulting on your guarantee and that'd be it - we'd be well and truly fcuked, not to mention that we'd eventually have to pay them as we have already promised to do so, and whether that be after a lengthy legal battle or before means nowt.

That aside, the anglo bail out money is significant, but not our biggest problem.  Our problem is that we are running a 25Bn odd annual deficit on our current spending v current income.  Bear in mind that annual revenue is circa 33Bn at present. 

Bogball- where are you getting that 33bn in tax from? My understanding is that income is around 70bn vs tax of 50bn.   It is hard to see the current strategy working out. The bank situation deteriorates and that means more capital injections from the Govt which leads to more cuts which depress the economy which reduces GNP which increases the ratio of the deficit to GNP which increases bond yields which leads to more cuts which depress the economy which leads to more bank losses agus mar sin ar aghaidh.

[fearglasmor]

I left this country after coming out of college in 1986, and this was not emigration by choice.
I came home in 1991  (having missed out on my best playing days) and have been lucky to live here through 17 pretty good years.

Now I have a daughter in 2nd year and another in national school.

Should I be encourageing them to learn as many languages as possible and get the hell out of here as soon as they can.

[MCMLX]

Should I be encourageing them to learn as many languages as possible and get the hell out of here as soon as they can.

Yes.

Can anyone explain why the Irish Gov felt the need to bail out these banks in the first place, why couldnt they let them go bust, surely it would have been the cheaper option.

[Fear ón Srath Bán]

Can anyone explain why the Irish Gov felt the need to bail out these banks in the first place, why couldnt they let them go bust, surely it would have been the cheaper option.

Sure. If your bosom and drinking buddies, your partners in mass deception and crime, your cronies in the golden circle, who have kept you in the cocooned and festooned luxury to which you have long ago become accustomed, if they were going to be exposed for the crooks that they were, would you have let them go to the wall?

[muppet]

Can anyone explain why the Irish Gov felt the need to bail out these banks in the first place, why couldnt they let them go bust, surely it would have been the cheaper option.

Sure. If your bosom and drinking buddies, your partners in mass deception and crime, your cronies in the golden circle, who have kept you in the cocooned and festooned luxury to which you have long ago become accustomed, if they were going to be exposed for the crooks that they were, would you have let them go to the wall?

All of that.....plus............who did they ask for advice on what to do?

But of course it was not the fault of anyone here, it international factors and....eh Lehman's.

I'll tell you something if I see that Tom Lehman at the Ryder Cup I be roaring the lads to jump him.

[MCMLX]

There has to be more to it than that FoSB. They cant have staked an entire nations future on the golden circle, can they? What I am asking, to the likes of Muppet who seems to have some sort of an idea, is what was the alternative. If the banks had been allowed to go to the wall what would that have meant for Ireland, would it have been worse than a €50billion bail out?

[Bogball XV]

Bogball- where are you getting that 33bn in tax from? My understanding is that income is around 70bn vs tax of 50bn.   It is hard to see the current strategy working out. The bank situation deteriorates and that means more capital injections from the Govt which leads to more cuts which depress the economy which reduces GNP which increases the ratio of the deficit to GNP which increases bond yields which leads to more cuts which depress the economy which leads to more bank losses agus mar sin ar aghaidh.

Here are the dept of finance figures from Nov of last year, I'm sure there are more up to date figures but these show revenue at 31Bn (11 Months) and a deficit of 22Bn, it's only got worse since then as any cuts have been swallowed up by increasing interest costs.  The generally accepted tax revenue for the year is 33Bn, expenditure isn't quite as certain, but again I believe that a deficit of 25Bn is accepted by most.

http://www.finance.gov.ie/documents/exchequerstatements/2009/NOVexcheqstat.pdf

Our peak revenue was in 06/07 at circa 55Bn, I believe expenditure at that stage was actually below it as we ran a surplus for a few years there.

[Fear ón Srath Bán]

There has to be more to it than that FoSB. They cant have staked an entire nations future on the golden circle, can they? What I am asking, to the likes of Muppet who seems to have some sort of an idea, is what was the alternative. If the banks had been allowed to go to the wall what would that have meant for Ireland, would it have been worse than a €50billion bail out?

Fair enough MCMLX, a little bit too simplistic, but not that much.

Initially, they thought with the figures involved, though relatively humungus, they were easily 'manageable'. Therefore they could contrive another quango or two, i.e., NAMA, to be paid obscene amounts, like the obscene amounts they were still paying those who were advising them (for advice that they would ultimately ignore). So, whilst there'd be a squeeze on the ordinary Joe, they could weather that, and the gravy-train would roll along nicely for the chosen ones, with little difference from before.

Unfortunately for them, their 'friends' in the golden circle weren't that friendly at all, and in fact were feeding them tissue upon tissue of outright lies in respect of their financial wellbeings. So then they were caught on the spectre of what they've been caught in now -- almost certain bankruptcy of the State due to their utter complicity and negligence -- they could do nothing but steer straight ahead, into oblivion.

And yet they try to ride that gravy-train, and they'll try to ride it until the very end, when Ireland Inc. is little more than smouldering wreck (the IMF will see to that).

[muppet]

There has to be more to it than that FoSB. They cant have staked an entire nations future on the golden circle, can they? What I am asking, to the likes of Muppet who seems to have some sort of an idea, is what was the alternative. If the banks had been allowed to go to the wall what would that have meant for Ireland, would it have been worse than a €50billion bail out?

No one that I have seen has suggested letting all of the banks go. If you look way back in the thread when it happened Bogball XV called the guarantee as a huge bluff within hours and he has been proved right. I suggested saving (by nationalising) the big two banks and maybe merging with one or two of the other ones but letting go the elephant in the room. As has been explained above better than I could it would have been much cheaper to do that then. Even the Swedes (remember the talk of the Swedish model?) let banks go to the wall during their crisis. Our muppets couldn't bear it though. Look how much of the total figure is going just to Anglo.

He is my very simple read of where we are now.

They tried the guarantee and when that failed they created NAMA. When that didn't save us they spoofed around until the markets stopped believing us. Now we have had today's announcement which seems to be an attempt to come clean and tell the markets what the truth is (e.g the upper limit on Anglo of €34Billion is the first worst case scenario comment I've read from an official source). If they are wrong...............well we won't talk about that.

Even if it works and the markets believe us the next budget is going to be vicious. Either they tear up the Croke Park agreement (and the marching really starts) or they puts taxes through the roof (and the really marching starts). That is the best case scenario.

Of course they could always charge for the €50 Billion of Natural Gas that Ray Burke gave away.

Just for a laugh, here is what €50 Billion would buy you:

67 Port Tunnels
60 Luas Lines
125 New Airport Terminals
122 Aviva Stadia
> 3 Pakistan flooding disasters

[seafoid]

Bogball- where are you getting that 33bn in tax from? My understanding is that income is around 70bn vs tax of 50bn.   It is hard to see the current strategy working out. The bank situation deteriorates and that means more capital injections from the Govt which leads to more cuts which depress the economy which reduces GNP which increases the ratio of the deficit to GNP which increases bond yields which leads to more cuts which depress the economy which leads to more bank losses agus mar sin ar aghaidh.

Here are the dept of finance figures from Nov of last year, I'm sure there are more up to date figures but these show revenue at 31Bn (11 Months) and a deficit of 22Bn, it's only got worse since then as any cuts have been swallowed up by increasing interest costs.  The generally accepted tax revenue for the year is 33Bn, expenditure isn't quite as certain, but again I believe that a deficit of 25Bn is accepted by most.

http://www.finance.gov.ie/documents/exchequerstatements/2009/NOVexcheqstat.pdf

Our peak revenue was in 06/07 at circa 55Bn, I believe expenditure at that stage was actually below it as we ran a surplus for a few years there.

Thanks

[muppet]

Bogball- where are you getting that 33bn in tax from? My understanding is that income is around 70bn vs tax of 50bn.   It is hard to see the current strategy working out. The bank situation deteriorates and that means more capital injections from the Govt which leads to more cuts which depress the economy which reduces GNP which increases the ratio of the deficit to GNP which increases bond yields which leads to more cuts which depress the economy which leads to more bank losses agus mar sin ar aghaidh.

Here are the dept of finance figures from Nov of last year, I'm sure there are more up to date figures but these show revenue at 31Bn (11 Months) and a deficit of 22Bn, it's only got worse since then as any cuts have been swallowed up by increasing interest costs.  The generally accepted tax revenue for the year is 33Bn, expenditure isn't quite as certain, but again I believe that a deficit of 25Bn is accepted by most.

http://www.finance.gov.ie/documents/exchequerstatements/2009/NOVexcheqstat.pdf

Our peak revenue was in 06/07 at circa 55Bn, I believe expenditure at that stage was actually below it as we ran a surplus for a few years there.

Thanks

That was my fault for posting this over a week ago. Can anyone enlighten me as to the difference please?

http://www.cso.ie/statistics/imfsummaryire.htm

Dunno about 10 years ago but here are some interesting figures:

General Government or Public Service Operations	- 2009	- 2008
Revenue Fiscal Sector	52,009M	59,782M
Expenditure Fiscal Sector	75,450M	72,981M

[seafoid]

good man Muppet. i knew i saw it somewhere. No idea where the difference arises.

[Capt Pat]

Should I be encourageing them to learn as many languages as possible and get the hell out of here as soon as they can.

Yes.

Can anyone explain why the Irish Gov felt the need to bail out these banks in the first place, why couldnt they let them go bust, surely it would have been the cheaper option.

They will say there were no easy options and in a way they have a point. However the only reason they took this route was to mind themselves and their freinds. The people who really run the country and the Fianna Fail party, the Property developers and the bankers were responsible for all this. So in order to protect them as much as possible, the government have taken this route of bailing out Anglo Irish and the others.

The option you mentioned of letting the banks go bust would have been the best in the long run but there would have been a lot of short term pain and the government would have been run out of town. So they chose to put the problem back to some point in the future.

[armaghniac]

where are you getting that 33bn in tax from? My understanding is that income is around 70bn vs tax of 50bn.

Tax is €31bn or so this year. However there is also PRSI, Health Levy, Pension Levy and assorted charges for things and even things like rents and fines. So revenue is indeed 50Bn odd.

[Rossfan]

They will say there were no easy options and in a way they have a point. However the only reason they took this route was to mind themselves and their freinds. The people who really run the country and the Fianna Fail party, the Property developers and the bankers were responsible for all this. So in order to protect them as much as possible, the government have taken this route of bailing out Anglo Irish and the others.

I couldnt have put it better myself.
The greedy irresponsible cnuts lost the run of themselves in the self created property bubble and then when they got burnt ( like in all pyramid schemes) it's decided that the plain people have to pay for it.
By jasus lads they wouldnt get away with it in France ( or Iceland)