Fiscal deficit in North over 2.5 times higher than Greece

[armaghniac]

BELFAST BRIEFING: A new study shows the scale of the economic problem that Northern Ireland has to deal with, writes FRANCESS McDONNELL

WHAT IS the difference between Greece and Northern Ireland – and no, it is not a trick question.

The answer, national stereotypes aside, is several billion euro – although it is anybody's guess as to what the exact amount might be.

The Greeks, who have set new Olympic records for budget deficits, might be surprised to find that any other country could be in a worst position than they are when it comes to spending money they did not possess in the first place.

But they would have reckoned without Northern Ireland and its gold medal-winning ability to find someone else to pass the bill to – normally the UK Treasury.

Greek's budget deficit is estimated to be 13.6 per cent of gross domestic product (GDP).

An economic study produced by Ulster Bank has just revealed that, in comparison, the North's fiscal deficit could be as high as 32 per cent of GDP.

The bank concedes that it is unfair to compare national deficits with regional ones. But then when have budget deficits ever been fair?

The Ulster Bank has put together some figures that rate the scale of fiscal deficits in what it describes as the sterling zone.

It makes for depressing reading in relation to the North.

The bank has uncovered that five UK regions have an annual deficit that tops that of Greece.

In Northern Ireland's case, its deficit is estimated to be more than 2.5 times higher.

Why are these figures relevant if they do not really compare like with like?

Because they show exactly the scale of the economic problem that Northern Ireland has to deal with.

The North's Executive may not have to find the money to try and fix its fiscal deficit problems like the Greek government but it's financial outlook is just as precarious.

Northern Ireland currently receives about £9 billion in annual budgets from the UK.

Historically the North has always received more public money per head of the population from the UK Treasury.

At the same time it has traditionally produced less revenue per head of the population compared to other parts of the UK.

What this adds up to is that Northern Ireland consistently spends more than it earns so it is not hard to see why a Greek-style tragedy could be on the cards when it comes to further UK public spending cuts.

These will likely be unveiled later this month when the coalition government publishes its emergency budget.

Richard Ramsey, Ulster Bank's chief economist, believes that the North could be looking at up to £1.5 billion in spending cuts over the next four years.

He says this is going to pose a major challenge for the local "public expenditure driven economy".

Latest economic analysis suggests that public expenditure in the North accounts for more than 70 per cent of local economic output.

According to Ramsey, the immediate outlook for Northern Ireland is grim even without the impact of any further budget cuts.

He estimates the economy contracted by at least 4.5 per cent in 2009 and says there has been a much weaker recovery in the first half of this year than had been previously anticipated.

Ramsey reckons Northern Ireland will be doing well if it sees growth of less than 1 per cent this year.

In his opinion the North will "struggle to get out of first gear in its economic recovery".

There is no escaping widespread and severe public expenditure cuts. In fact there is a school of thought in Northern Ireland that, in the long run, it could help transform the local public sector and the local economy.

But as Joanne Stuart from the Institute of Directors has repeatedly warned, reform will come at a price.

Stuart says there is wide agreement that the balance between public and private sector employment in Northern Ireland needs to be changed.

"Until now there has been no consensus about how to achieve such a step-change within a realistic timetable and there is little understanding of how such a shift could open up scope for creating more jobs," she says.

According to Stuart and the Institute of Directors, there is scope for private-sector money and expertise to be used more widely to secure high-quality, value-for-money, services.

She says it is time for the Executive to organise a "radical and strategic review" of how public services are delivered in the North.

Otherwise, Stuart says, local politicians might be forced into making "hasty decisions" to save money, which could further damage the local economy in the long run.

[Ulick]

and Armagh has (slightly) better players than the Clans.

[Pangurban]

Would not worry, sure we have the finest political brains in the world, brainstorming day and night up in Stormont. When they have the Gaza situation sorted to everyones satisfaction, and the vital questions of parades and the future of Ulster Scotch determined, they will have us back in the black, with the world beating a path to our door to view our economic miracle.

[haranguerer]

BELFAST BRIEFING: A new study shows the scale of the economic problem that Northern Ireland has to deal with, writes FRANCESS McDONNELL

WHAT IS the difference between Greece and Northern Ireland – and no, it is not a trick question.

The answer, national stereotypes aside, is several billion euro – although it is anybody's guess as to what the exact amount might be.

Why are these figures relevant if they do not really compare like with like?

They're not.

[Arthur_Friend]

http://www.johnpilger.com/page.asp?partid=576

[delboy]

What a non story that was, NI receives more money than the rest of the UK and contributes less than others hardly surprising since for thirty years there was an armed conflict over here which destroyed investment, infrastructure and confidence in the region.

Also because of our geographical postion we have to build infrastructure from scrath we can't just intergrate it like the do over on the mainland parts of the UK and we don't get the same economies of scale, therfore it takes more money to acheive the same results over here, that should hardly come as a surprise.

That we take more than we give is no surprise either, virtually every other region of the UK is in the exact same position, the gorilla in the corner which is the SE of england and london makes everyone elses contribution pale in significance but then again it was the other post-industrial regions of the UK that generated most of the wealth in the past and paid for the fantastic infrastructure that was built in and around london and the SE.

If you wanted to you could easily make the case that every other region of ireland could be viewed as a drain on the wealth generated by Dublin. But that would be about as short sighted and stupid as the above article really.

[magickingdom]

What a non story that was, NI receives more money than the rest of the UK and contributes less than others hardly surprising since for thirty years there was an armed conflict over here which destroyed investment, infrastructure and confidence in the region.

Also because of our geographical postion we have to build infrastructure from scrath we can't just intergrate it like the do over on the mainland parts of the UK and we don't get the same economies of scale, therfore it takes more money to acheive the same results over here, that should hardly come as a surprise.

That we take more than we give is no surprise either, virtually every other region of the UK is in the exact same position, the gorilla in the corner which is the SE of england and london makes everyone elses contribution pale in significance but then again it was the other post-industrial regions of the UK that generated most of the wealth in the past and paid for the fantastic infrastructure that was built in and around london and the SE.

should that not be monkey

what about scotland and north sea oil? could that not have made a dubai out of glasgow... (perish the thought)

[mayogodhelpus@gmail.com]

That we take more than we give is no surprise either, virtually every other region of the UK is in the exact same position, the gorilla in the corner which is the SE of england and london makes everyone elses contribution pale in significance but then again it was the other post-industrial regions of the UK that generated most of the wealth in the past and paid for the fantastic infrastructure that was built in and around london and the SE.

Bullshit it was paid for by conquest, coloniation and slavery.

The island of Britain is not the subject of this thread, it is the NE of MAINLAND IRELAND which is being debated.

[heganboy]

i just wasted part of my life reading that- stopped when i got to

could be in a worst position

and we're done...

[delboy]

That we take more than we give is no surprise either, virtually every other region of the UK is in the exact same position, the gorilla in the corner which is the SE of england and london makes everyone elses contribution pale in significance but then again it was the other post-industrial regions of the UK that generated most of the wealth in the past and paid for the fantastic infrastructure that was built in and around london and the SE.

Bullshit it was paid for by conquest, coloniation and slavery.

The island of Britain is not the subject of this thread, it is the NE of MAINLAND IRELAND which is being debated.

Thats very catchy, just rolls of the tounge 

You are the one talking bullshit the thread is about a region of the UK and its economic input/output to the UK, stop trying to use it as a cheap way to score points for your own biased political outlook.

[seafoid]

Northern Ireland is a special purpose vehicle. Greece is a proper country.

[armaghniac]

Northern Ireland is a special purpose vehicle. Greece is a proper country.

True enough. And mentioning the troubles and so on is fair comment. The traditional UK economic model is of super-profits in the City of London and the tax revenue spun out to periphery. This model is broken. Public expenditure will have to trimmed back and this will lead to less transfers to NI, which will have to start earning its keep to a greater extent.

[illdecide]

and Armagh has (slightly) better players than the Clans.

Well look at the pick they have FFS We've got 2 streets to pick from

[Bogball XV]

When they have the Gaza situation sorted to everyones satisfaction

I think he's actually been described as comfortable by the Newcastle and General hospital, so they have no need to worry about that anymore.

As for th rest, I don't see why people think it's a non-issue, NI will see fairly savage cuts over the next few years and these will impact much more than in other regions, because of the north greater dependence on public money.

[seafoid]

The IRA and its associates destroyed what was left of the NI economy after the collapse of the traditional industries such as shipbuilding. I remember going up to Belfast in 1994. There wasn't a single place in the city centre you could have a cup of coffee. 

It is going to be very hard to wean NI off the UK financial teat. Especially with the levels of emigration of the educated prods  and the South banjaxed for the next 10 years or so.