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

[muppet]

http://howmuchpooreraminow.com/

[bcarrier]

I think we need to split this in two :

1. The Bank Debt/ Bondholders
2. The Sovereign Debt/ Bondholders

Right now the bank guarantee makes them pretty much inseperable. A bank default has to happen but the blame for that rests on management of the banks, those that lent to them ( the bondholders), and those that regulated them the ECB/our regulator/government. The banks should only be the taxpayers problem to a very minor extent if at all. If we stop digging in that particular hole then maybe there will be no need to default on the sovereign debt. The current arrangement is actually interfering with the operation of a proper market  which would have forced these failed businesses into liquidation long ago.

With potential  bank debt liabilities gone from the national debt then maybe a sovereign default can be avoided . The can can be kicked down the road as they say.  A sovereign default will be tricky. In reality countrys dont "default" ...they usually devalue their currency. So long as Ireland are stuck in the euro that cant happen. Circumstances elsewhere might bring that to ahead beforehand.

For now the top priority should be the unravelling of the guarantee . Let the ECB save the banks if they must.

[armaghniac]

Olii Rehn was on the radio this morning talking about "investors" sharing the pain and not all of the burden falling on taxpayers. As a taxpayer, I approve.

The sovereign debt is manageable, with some belt tightening, if the bank thing can be sorted. 

[seafoid]

I agree, bcarrier. The sovereign has to be protected at all costs.  Otherwise there will be no option other than to do some sort of a structured default.

The people do not deserve to be saddled with up to and perhaps beyond €100bn of debt arising from the banking crisis.
Even the ones who voted Fianna Fáil..
 

[Hound]

I'll put my hand up admit I am (fortunately) fairly well paid and short term work prospects look good (who knows after that). This budget will impact on my family but it appears to me to impact on the lower paid a lot more. While I have argued here that only half of all workers here pay tax and more need to start paying tax, this plan still seems to be a long way right of centre.

That means our extreme right wing ideology screwed up completely, needed a socialist bailout, which will now be paid for by putting apparently more of the burden on the lower paid/traditional left. Additionally those  traditionally most likely to march are among the hardest hit, e.g. students, pensioners, union members and the unemployed. IMHO this will end in tears.

Ah c'mon muppet, you cannot call our income tax system extreme right-wing. I doubt there's a more left wing income tax system in the EU. In fact, as you said yourself, it was too left wing as far too many people pay no tax whatsoever - and that had to be done because dole was too high.

8% of workers earn over €75,000 and they contribute 60% of all income tax.

People earning €350 per week didnt have to pay one cent in tax. That was just totally unsustainable. Steady increases over the next 4 years will see them paying €11 a week in tax from 2014. I'd imagine the dole decreases will be similar.

[INDIANA]

I'll put my hand up admit I am (fortunately) fairly well paid and short term work prospects look good (who knows after that). This budget will impact on my family but it appears to me to impact on the lower paid a lot more. While I have argued here that only half of all workers here pay tax and more need to start paying tax, this plan still seems to be a long way right of centre.

That means our extreme right wing ideology screwed up completely, needed a socialist bailout, which will now be paid for by putting apparently more of the burden on the lower paid/traditional left. Additionally those  traditionally most likely to march are among the hardest hit, e.g. students, pensioners, union members and the unemployed. IMHO this will end in tears.

Ah c'mon muppet, you cannot call our income tax system extreme right-wing. I doubt there's a more left wing income tax system in the EU. In fact, as you said yourself, it was too left wing as far too many people pay no tax whatsoever - and that had to be done because dole was too high.

8% of workers earn over €75,000 and they contribute 60% of all income tax.

People earning €350 per week didnt have to pay one cent in tax. That was just totally unsustainable. Steady increases over the next 4 years will see them paying €11 a week in tax from 2014. I'd imagine the dole decreases will be similar.

Spot on. However Continental salaries are lower because even the underpriviledged have access to good Medical Care. We dont.

[Declan]

End game approaching fast for the Christmas release of Reality on Merrion St...Contingency: the Final Frontier.

Looks like someone is listening to Uncle Vinny – one of Europe's biggest clearing house has just increased the additional cost of handling Irish debt by 50% ( up from 35% to 45%)  - it was 15% three weeks ago..they doubled it to 30% last week...so Brian's would say things must be looking better that they only increased this week by 50% RATHER THAN DOUBLING!).

Result : Irish banks even MORE reliant on ECB this morning ( and we thought they couldn't get any more dependent)

http://www.ft.com/cms/s/0/89d64ace-f87a-11df-8b7b-00144feab49a.html?ftcamp=rss#axzz16I21f2ca

8% of workers earn over €75,000 and they contribute 60% of all income tax.

You cannot compare tax regimes without looking at the spending power of the nett income, We've had more tax breaks than anything else from car parks to hotels to private hospitals and nursing homes and it just doesn't make sense to just compare the income tax rate.

Another stat I've seen is that 1% of the population have 34% of the wealth and just saw this one as well:
The 125 Page report Survey on Income and living conditions for 2009 has just been released from the CSO.

http://www.cso.ie/releasespublicatio...rrent/silc.pdf

One thing to pop out is the 17.3% deprivation rate up from 13.8% in 2008.

[muppet]

I'll put my hand up admit I am (fortunately) fairly well paid and short term work prospects look good (who knows after that). This budget will impact on my family but it appears to me to impact on the lower paid a lot more. While I have argued here that only half of all workers here pay tax and more need to start paying tax, this plan still seems to be a long way right of centre.

That means our extreme right wing ideology screwed up completely, needed a socialist bailout, which will now be paid for by putting apparently more of the burden on the lower paid/traditional left. Additionally those  traditionally most likely to march are among the hardest hit, e.g. students, pensioners, union members and the unemployed. IMHO this will end in tears.

Ah c'mon muppet, you cannot call our income tax system extreme right-wing. I doubt there's a more left wing income tax system in the EU. In fact, as you said yourself, it was too left wing as far too many people pay no tax whatsoever - and that had to be done because dole was too high.

8% of workers earn over €75,000 and they contribute 60% of all income tax.

People earning €350 per week didnt have to pay one cent in tax. That was just totally unsustainable. Steady increases over the next 4 years will see them paying €11 a week in tax from 2014. I'd imagine the dole decreases will be similar.

Hound I am certainly not calling our tax system right wing. It is this 4 year plan that I am calling right wing. The only serious pain I see for myself is my increased pension contributions (this may dramatically increase the pensions time bomb we were going to have anyway).

[Donkeywalloper]

Seems to be quite a few ( of what appears fairly intelligent) anaylsts saying that the budget if it goes through is not going to sort the problem. A week or two after the budget they are still expecting  the banks to go, and i use a technical term, tits up !

[seafoid]

The capital markets can't ask the people of Ireland to give any more than the 15bn.

As Mariah Carey says to AIB ,

i can't give, if living is without you 
i can't giviiive , i can't give any more

[Declan]

Mail from a mate:

the 4 year plan in the national interest is actaully a 2 month re- election plan in Fianna Fail's interest.

Hit social welfare - won't vote fianna fail anyway.
Hit minimum wage - young people , lot won't vote , most won't vote Fianna Fail anyway.
Leave pensions alone - old people will vote and will vote fianna fail
Leave PS alone - con public servants that fianna fail are on their side even though FF know croke park agreement will not last.
Load a lot of the adjustments onto 2012 - 2014 so if Fianna Fail don't get elected again fine Gael and Labour will be there for the most savage cuts and both hands tied behind their backs .

Negotiate deal with IMF/EU re. banks that will leave alll the citizens of this country screwed and fg / lab taking the flak.

[seafoid]

FF are in serious meltdown mode. I have been watching various programmes on the RTÉ player over the last week and so far have seen :

-Pat Carey utterly humiliated on Prime Time . His body language was dreadful.

-Mary Hanafin admit she made a declaration about there being no need for a bailout without being informed of what was going on and excusing it by stating she was jetlagged.

-Dick Roche state on Prime Time that if Ireland hadn't put in place the bank guarantee the situation would be awful now. As opposed to what?

-Tony Killeen lose his cool totally when challenged by Fintan O'Toole on Pat Kenny's show. He was like some sort of cornered rat.

FF is in a dreadful state if the top ministers can't cope with their media duties.  Imagine how this shame is going down amongst FF activists

[Tubberman]

Meanwhile, a spokesman for the EU Economics and Monetary Affairs Commissioner Olli Rehn has indicated that senior bond holders may have to share the burden of the Irish bank bail-out.

http://www.rte.ie/news/2010/1125/budget-business.html

This is a change in tack from Europe. They've obviously realised there isn't a hope in hell that Ireland could ever afford to pay back the interest (never mind the capital) if we had to take the full €85bn.

Richard Bruton also said on Morning Ireland this morning that he would be in favour of defaulting and letting the bondholders take some of the hit if the repayments became too high for Ireland.
Micheál Martin said that default couldn't be countenanced    I'd say he might change his tune, now that Rehn has.

[lynchbhoy]

all fine gael need to do is jettison inda keny and FG will have a landslide victory - right now they look like winners of any future election, but you never know what pact FF will do along with labour to hold onto the reins !
I'd still not be happy with fg in power if kenny was leader. Noonan or even varadker not kenny.
he is ff esque twit with no economic nous.

I was shocked to see the public sector let off effectively scot free from wage cuts etc. that is not acceptable.
There should be massive axe swinging and also huge top salary cuts to the top tiers of people who lets face it, dont actually EARN the money they get.
the top dogs in ESB, Bor Gais etc etc - they are on half a million euro salaries a year. these have to be cut by more than half. the top public sector and civil service execs likewise.

[Hardy]

Meanwhile, a spokesman for the EU Economics and Monetary Affairs Commissioner Olli Rehn has indicated that senior bond holders may have to share the burden of the Irish bank bail-out.[/][/]

http://www.rte.ie/news/2010/1125/budget-business.html[/][/]

This is a change in tack from Europe. They've obviously realised there isn't a hope in hell that Ireland could ever afford to pay back the interest (never mind the capital) if we had to take the full €85bn. [/]

Richard Bruton also said on Morning Ireland this morning that he would be in favour of defaulting and letting the bondholders take some of the hit if the repayments became too high for Ireland. [/]
Micheál Martin said that default couldn't be countenanced    I'd say he might change his tune, now that Rehn has.[/]

I think RTÉ are reading it wrong in that report. I was listening and I took Amadeo's comments about bond holders sharing the pain to be a reiteration of Angela Merkel et al's statements of a couple of weeks ago about FUTURE bonds. They were at pains then to point out that this did not apply to currently held bonds and that the speculators must be baled out on all existing liabilities.

It was Richard Bruton's statement that was game-breaking to my mind and I'm surprised there hasn't been more comment on it. Micheál Martin was practically having caniptions and more or less saying "you can't say that". This was effectively the incoming government saying it WILL burn the bond holders (at least partialy - he said something about "sharing"the loss). Surely that scuppers the whole bailout and negates its raison d'etre as far as the EU/ECB/IMF are concerned - to reassure the markets and save Spain, Portugal and, by extension, the Euro.