“The Treaty of Versailles demanded that Germany pay €318bn in today’s money. From a German population at the time of 58 million, this equates to €5,482 per person in today’s money. If bank bailout costs are €50bn, then this will work out at €11,235 per head — or more than twice the cost per head of the Treaty of Versailles to the average German.” (Indo Sept 1st)
Then we have the gladdening news that the taxpayer bail-out of corrupt bank Anglo Irish, which reported a record loss of €8.2 billion for the first half of this year, is the biggest bank bail-out in the world, ever! So far, €23bn of our money has been poured down this financial plughole. The first-half figure of €8.2 puts the millstone bank well on course for beating last year's record losses:
LOSSES posted by Anglo Irish Bank are the worst by any bank in the entire world, according to new data from a prestigious financial journal.
The taxpayer-owned bank's loss in 2009 of €15bn was far bigger than those of giant US, Japanese and German banks, according to 'The Banker', an industry magazine listing the 25 biggest losses. (Indo Sept 2nd)
Then we have Brian Lenihan breathlessly telling us that the economy has stabilised because he and his idiot government have come marginally closer to matching their estimates of tax income in relation to government spending:
“Tax receipts fell by 9 per cent last month compared to a year ago, according to the latest Exchequer figures.
The State collected €18.9 billion in tax receipts in the first eight months of the year. This compares to €20.8 million collected in the same period last year, a drop of 9 per cent.
The €18.9 billion tax take is €141 million or 0.7 per cent below the Government’s target. However, this is an improvement on the comparable figure in July, when taxes were €247 million or 1.4 per cent below target.
The Exchequer deficit at end of August stood at €12.1 billion. This compares to an Exchequer deficit of €18.7 billion in August 2009.
The figures show that the budget is on target and economic growth is returning, Minister for Finance Brian Lenihan insisted tonight.” (Irish Times Sept 2nd)
The truth is, unemployment is increasing and the Nama and Anglo bailouts are costing us, the taxpayers, more each day. Never mind the reports of improved consumer confidence - these are the same idiots who were full of confidence buying investor apartments off the plans a couple of years back - and never mind the improved GDP figures which are down to the multinationals. This country is in deep trouble.
Worst of all, we have a government and a finance minister permanently wading in denial.
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Pluck of the Irish( Financial Times London)
Published: August 26 2010 22:43 |
The Irish have a right to feel picked on. They have suffered the deepest recession in the eurozone and implemented austerity measures that set a model for Greece. Wednesday’s ratings downgrade by Standard & Poor’s must have felt like slap in the face. But the worst is not yet over for Ireland.
The downgrade itself is of minor importance. It takes S&P down one notch – from where Moody’s still remains to where Fitch already is. And the raters’ concerns are mild compared to the rabid worries of market investors: Irish 10-year government bonds closed on Thursday at 344 basis points over Germany.
The fears cannot simply be put on the doorstep of the Irish state’s profligacy. A chasm opened up in its public finances last year, when the deficit reached 14.3 per cent of output, and will not close for many years to come. But this is in large part caused by the recession: Ireland’s gross national output fell by 11.3 per cent last year. The government is doing all that it can to consolidate the budget – worsening the slump that the Irish must bear.
Where the government has not done all it can is its rotten banking system. Nama, the Irish “bad bank”, has bought toxic assets from banks. But it has not shielded taxpayers from the damage caused by banks’ foolishness. This is why both investors and raters of Irish sovereign debt are rattled.
They fear that Nama assets will be worth even less than originally thought, leaving the government, which guarantees Nama’s borrowing, with the short end of the stick. And if Nama forces steeper haircuts on peddlers of financial junk, their need for recapitalisation will rise correspondingly. This too will be at taxpayers’ expense – as the recent plan to inject more capital into Anglo Irish Bank proved.
Bailing out failed banks means bailing out the wholesale lenders that funded them. But when losses are doled out, unsecured creditors belong right behind shareholders. Until they are returned there, markets will expect taxpayers to continue paying an ever-rising bill.
It is time to staunch the bleeding. As Irish state guarantees near their expiry date, some banks will not be able to refinance their balances. The government should prepare insolvent banks for forced debt-for-equity swaps, which would instantly recapitalise the banks in question and cap the government’s exposure. This cannot be done frivolously; European institutions are exposed and EU partners must be consulted. But someone must put an end to the practice of handing banks blank cheques. Some Irish pluckiness would benefit us all.
** I understand most- but not all the econmoic terms-but I think my laymans understanding of this FT article is' stop bailing out the bastards.'
BIGGEST BANK BAIL OUT IN HISTORY!
But I suppose these awesome stats will occassionally occur in a Global Superpower of 4.5 million people with Titans at its head
"I understand most- but not all the econmoic terms-but I think my laymans understanding of this FT article is' stop bailing out the bastards."
Yep... mine too.
It drives me crazy to see commentators clapping the Minister of Finance on the back. Lenihan is incompetent as the rest of the spoofers in the cabinet.
martinD17
The Lenihan fanboys are probably the same ones who six months ago were advocating bringing back Charlie McCreevy
What is the worst possible outcome for Ireland? Is it already happening or is it yet to develop? I am almost afraid to ask as every time I read what the worst possible outcome could be, it subsequently develops.
MR GM IAM OUTRAGED all these auld foriengers S&P,MOODYS FITCH all gang banging our great little nation and now our good friends with bad teeth at the FT appear to be applauding us as we head for the edge of the cliff into the abyss THANKS FOR THAT LITTLE TIDBIT -ANNA doees anybody ever read that GLOBAL AUTHORITY THE OIRISH TOIMES for real information on irl you will find that irl is almost the second ritchest country in the world and the most educated, charming, facinating, rational , ever popular and they speak english too, heck even the taliban have a huge respect for oirland and its great leaders just one great success story all around whats to complain about, here in beverly hills the big worry of the day is that the DEA will win the war on drugs that would make this recession look like a walk in the park but iam not anxious about that one BH
Just a few points GM. (1)Increasing consumer confidence is grand but the question I ask is, is the fundamental agitator which caused the problem in the first place being truly tackled - that is, a belief that unchecked capitalism (THE ME SOCIETY) will solve all economic problems? Hence does anyone really believe that all the checks and balances that have supposedly been put into place, will prevent a similar collapse in the future, (or at least, create a healthy financial sector for the future) in a country like Ireland? A very telling fact is, they finally cottoned on to bringing in top officials from outside the jurisdiction - to tell the Irish what they need to know. Another one is, even now, there is a continuing debate about the banks and their role in the state at this time. Lets not even mention that the banks are still acting like they run the country?
(2)Although Ireland does not have the size or economic drive to create indigenous wealth (similar to Germanys economic stimulous plans, in recent years, which create jobs and hence wealth) a reliance on taxing all those remaining in work and who own capital wealth - and expecting this revenue to create a platform for economic stability - is wrong, IMO. (And yep GM, multinationals don't count, they just distort the figures). This is where imagination MUST be used again IMO, to get people back to work (real employment). Or you will effectively have whats developing, two economies, one, a growing export led phenomenon and one which is dependent on the state.....WHY not initiate a stragic stimulous package over the short to medium term, (wealth creating wealth, bringing the cost of borrowing down) something similar to Roosevelt's New Deal in the 1930s? Theres 150,000 (or so) construction workers idel at the moment and with many Government sponsered schemes coming to an end, now is the time to begin a complete overhaul of the infrastructure of the state. A planned stragedy which would lend itself to building whats needed, while at the same time creating wealth and hope for many unemployed. Or if not this, at the very least a coherent plan which sets down exactly how the country is going to find its way out of this mess.
(3) Does this Government really believe that an increase in taxation will bring the nation back from the brink? (Is it only in Ireland that centre right policies on taxation, are very similar to the centre left?). Another strange thing about Ireland is, people suppose (that includes the electorate!), just because their income tax is relatively low (only just!) by international standards, that Ireland is a low tax economy. No it is not. When you total all the stealth taxes and the things you pay twice for (at least), it is the opposite.
(4) A National Government, at least they could pool their energies instead of opposing and proposing for the sake of it.
(5) A little positivity goes a long way? It could have been worse, just imagine if the ECB didn't raise interest rates some years ago?(before the credit crunch). The dependence on housing and construction taxation here, would have continued, and the final figure for Anglo Irish Banks bail out would have been far worse.
We're in a fix, no doubt ... but the numbers given in the Indo for the Versailles Treaty reparations (which were only "agreed" in 1921) are faulty. Even the basic reparations would have cost the Germans per head € 12.069. Some number-crunching to score a point did not add up here.
I only found this site today and it is encouraging that finally some Irish people have woken up to the con that is FF. Unfortunately some of the comments posted herein are very wide of the mark with respect to what state the country is in. Notwithstanding the fact that FF brought us into a recession in the 1980's due to the elimination of rates on houses and car tax, those that can remember that far back, but we are now inevitably faced with a depression after what they have done over the past decade. Our proplems can be broken up as follows:-
(1) Bailing out the Banks and in particular Anglo Irish Bank which will cost an unknown amount of billions. This as everone knows is a black hole for which we the tax payer are forced to pay for.
(2) NAMA which is only used to get FF developers and bankers out of a shithole of their own making. Notwithstanding the fact that Mr. Dumbo Lenihan was going to discount the bad debts to the banks by only 30% we should go down on our knees and thank the EU Commission who did not agree and a much larged discount was applied. Despite the much higher discount NAMA is going to cost the tax payer way down the road an inordinate and unknown amount of billions. I know of one case in the NW where over €2M was paid for a small plot of land with no pp. After PP was obtained some years later the developers had it revalued at over €10M. The developers borrowed the difference and reinvested elsewhere. The bank lent that amount of money with no personal guarantees. The only collateral the bank held was the land which is now worth €200k. We the donkey taxpayer have to cover that loss. How many more examples like that exist throughout the country?
(3) And finally the icing on the cake our annual defecit of €20billion. Despite the fact that we have had a number of budgets since FF came into power the difference between income and expenditure remains firmly at around €20 billion. How in the name of god can 1.5 to 1.7 million taxpayers pay for the aforesaid burden of debt. It is impossible. We can thank Bertie the criminal Ahern for benchmarking which put the payroll for public and civil servents through the roof. Some of which are now paid higher salaries that the US president. But we probably deserve everywhing we have coming to us over the next 20 years. Remember the cheering crowds ouside the Mahon Tribunal when the great Bert came out smiling after lying through his teeth. We admire criminals. There is an old saying 'give a begger man a horse and he will ride it to hell'
Well done Ireland you are a credit and an example to the rest of the world. We gained so called independance in 1922 after the insurrection of 1916. The insurgents of 1916 must be turning in their graves. We need another Michael Collins to run this country as an autocracy and not a democracy, which Ireland never was. It is my opinion that we should beg the british to take us back again into the common wealth as they never did in 800 years to Ireland what FF have done in 10. The impending depression that is to befall us will make the famine of the 1840's look like a FF pissup in Galway. Those of you who can leave the country should do so immediately. Unfortunately I am one of the many who cannot. In the past we took solice from our depression of the 1980's by following the great Jack Charton who brought our football team from nothing to the world stage. We were proud of his and our achievements and it instilled great pride in the nation. Now we have no one to encourage us or to turn to in our hour of need.
One last point before I go. It is alleged by all that the unemployed is around 455,000 which is not accurate. All company directors and the self employed are not included in that figure as they are not entitled to social welfare. That could bring the unemployed to around 600,000. Revolution here we come.
Thanks for your excellent observations, Anthony. Very well put.
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