Economic Crisis Blogburst 5: Outsourcing the nation’s debt?

– Okay, let’s start off with Gavin Sheridan on The Cycle of Market Emotions… Some of which you can pick up in the letters page of the Irish Times this morning…

– And the Independent reports the bail out could come to as much as €100 Billion

– Phillip Lane at worries that (with a mild economic recovery in the offing) the price of back pay may be a further crippling of growth in the Irish economy:

Given the importance of a pro-growth plan and the downside risks to the export sector of varying this tax rate, it does not seem wise for the international debate to focus on this topic.

– Former Taoiseach and European Union ambassador to Washington John Bruton noted that

…corporation tax was the one tax that had exceeded Department of Finance projections for the first 10 months of the year, delivering €300 million more to the State’s coffers “in bad times” than was expected.

– Pat Cox, former President of the European Parliament:

“I think we are wrong to maintain a pretence at the highest level of our political system that we have a choice: this is an illusion of choice.”

– Niall Fitzgerald reflects a frustrated line of thinking amongst many of wealthy businessmen in Dublin:

It is not just Ireland’s economy that has been damaged, he says, but its reputation — and that may be even more harmful in the long run. He strikes a surprisingly populist note in saying that one big reason for the loss of Ireland’s reputation as a good place to do business, is the fact that nobody seems to have been held accountable for the financial disaster.

– Martina Devlin on Fianna Fail, Humpty Dumpty and the slipperiness of Irish political language

– And Pat Rabbitt rips into Pat Carey (from about 8 minutes) over the Government’s shambling over the last week on RTE’s flagship Prime Time programme…

– For example on the sovereignty issue, having talked it up for his own political reasons, the Taoiseach is now rather pointedly talking down the issue of sovereignty

– As Ben Archbald observes, why should anyone be surprised:

…the next politico or pundit commenting on a possible loss of Irish sovereignty should really consult the vast swathes of recent dependence history; there is nothing amiss or new about Ireland outsourcing sovereignty when it feels it needs to.

– Guido rather glad-handedly terms it End of an Eire…

– Donal Donovan puts the sovereignty issue in more a precise context:

…arguably (as was admitted a couple of days ago by Minister for Finance Brian Lenihan) any country that has left itself exposed to such an extent to foreign lenders for financing day-to-day operations (and that is before the banks’ problems are brought into the equation) has already ceded considerable sovereignty to others – be they rating agencies, bondholders or institutions such as the EU.

– And as the bank guarantee scheme is quietly given another six months term, Bill H0bbs notes that Ireland’s Credit Unions will also have to be bailed out too

And whilst some have worried about the Oirishry of this clip from Newsnight, Paul Mason doesn’t miss the irony of George Osborne’s lauding of Ireland’s low tax economy in 2006 and cowping of the Irish banking system because of (p!ss) poor regulatory control:

– Geeko’s World with yesterday’s scary number... 64% is the proportion of GNP being borrowed by Irish ‘banks’ which “is probably a bit like going down to the pawn shop to borrow over half your annual income in order to buy this week’s groceries down at Dunnes.”

– Rob Kitchin with some helpful advice for foreign journalists who he says are currently being told that the ghost estates are something of a media fiction:

If anyone else approaches the Irish Times and the IT doesn’t know where to point them – either direct them to the maps on the DEHLG website or refer them to, but don’t pretend the 2,846 unfinished estates don’t exist or that the problems relating to them are trivial.

– P O’Neill has an interesting admission from Dominique Strauss-Kahn, to the extent that the US is behaving like Ireland has (ie, spending other people’s money), but is too big to get called on it by the IMF, or anyone else…

– And finally, advice for depositors of what the Government’s bank guarantee means for them… via Stephen


  • Itwas SammyMcNally whatdoneit

    It is arguable that the Prof over at Trinity is actually to be merited with bringing this issue into the public domain when he pointed out a couple of weeks ago (as reported here on Slugger) that mortgages were the next big thing.

    The one point he got badly wrong( as pointed out on Slugger) was that Ireland would be on the wrong end of a punitive rate of interest to sort itself out.

    The boy Lenihan may, after he recovers from the kicking in his own party, be credited with playing a blinder in securing a pretty good deal (5%) – considering the enormous pressure he must must have been/is under.

  • Mack

    Kelly lectures in UCD

    Phillip Lane is head of Macroeconomics at Trinners..

  • drumlins rock

    sammy s got a yellow card, ha ha de ha ha!

  • Itwas SammyMcNally whatdoneit


    A less generous person than myself might well refer you to moderation for those very hurtful words.


    Do you agree that the Prof from Triinty perhaps let his anti-Euro views impinge on his otherwise excellent analysis?

  • drumlins rock

    ack sammy you wouldnt do that!
    does seem you have the dubious honour of getting the first yellow card though, wouldnt have said anything otherwise, better go comment on the real subject now before I’m done for playing that man :)….
    Am thinking it is too scarey to think about though!

  • Perhaps this is off topic but I am wondering what the yellow card was for and would like to read the comment so that I could know more about the commenter. I know that sounds ghoulish to some.

    Is the offensive comment still published?

    I think there should be a policy of collecting the comments and putting them into separate folder or thread with a health warning so that it is understood that a reader accessing the comment should be in no doubt that the comments are either highly offensive, defamatory or both. The law on libel should then be clarified to exempt that type of publication.

  • Mack
  • Itwas SammyMcNally whatdoneit


    ” think there should be a policy of collecting the comments and putting them into separate folder or thread with a health warning so that it is understood that a reader accessing the comment should be in no doubt that the comments are either highly offensive, defamatory or both.”

    Interesting idea – do you not think it might be a bit counter-productive – as it could be popular with customers popping in, a la Soho, to the naughty booths.

    In relation to the comment itself I’m afraid it imay be a little disappointing for you. The offending remark is at 12.19 am.(No drink taken by the way)

    Drumlin’s Rock,

    I got ‘dragged’ into a dispute about a certain person’s ring and was actually the 2nd person to be awarded a card.

  • pippakin

    I’m against this public yellow carding. It seems excessive and of course it will lead to more interest in the ‘crime’ than the actual subject of the thread it was committed on!

  • Mack
  • Itwas SammyMcNally whatdoneit


    I’m not sure our current difficulties are not just caused by the absence regulation on lending .

    If any successful economy allowed/encouraged its citizens and developers to keep borrowing money for property it would sooner or later simply implode due to the boy Newton’s law of gravity.

    As I mentioned above do you not agree that the Morgan over in Trinity who published his piece (see below) a couple of weeks ago seems to have brought the latest round of the cirises into the open and that he seems to have called it badly wrong on the interest rate Ireland will be charged which undermined his otherwise excellent article?

  • Mick Fealty


    It’s a much less labour intensive than conversing over it. Keeping to the Slugger rules keeps you clean.

  • drumlins rock

    oceans of regulation would not have helped without a free and independant means of enforcing it, that could not happen with a FF government in place.
    As for interest rates, maybe a couple of weeks ago all that was on offer was at scarey rates….

  • Itwas SammyMcNally whatdoneit


    I think you are being a touch pedantic there – implict in a need for regulation is that it is enforceable and enforced..

    Revised statement

    I’m not sure our current difficulties are not just caused by the absence of striclty enforceable regulation on lending.

    The point being that no complicated laws of economics needed to understand what was going on – just the law of gravity.