Economy – Page 68 – Slugger O'Toole

IRISH TAXPAYER (Séan): “I am really furious right now, Helmut…”

Pete Baker on November 30, 2010, 3:29 pm

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As I mentioned yesterday, the markets were distinctly unimpressed with the details of Ireland’s bail-out. The Irish Times today notes that Although banking stocks rose yesterday, global stock markets closed lower as markets failed to be convinced that the €85 billion package for Ireland would solve the euro zone debt crisis. EU economic and monetary affairs commissioner Olli Rehn said yesterday that Spain may need further austerity measures to reduce its deficit if growth was lower than forecast next year. And the paper …

Ireland can’t afford to bail out European banks

Mack on November 30, 2010, 2:41 pm

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I think this point is worth highlighting more clearly. Below – Simon Johnson ex-CEO of the IMF – on who is owed money by the Irish banks German banks are owed $139 billion, which is 4.2 percent of German G.D.P. British banks are owed $131 billion, or about 5 percent of Britain’s G.D.P. French banks are owed $43.5 billion, which is approaching 2 percent of French G.D.P. But the eye-catching numbers are for Belgium, which is owed $29 billion – …

The [animated] view from Taiwan

Pete Baker on November 30, 2010, 1:58 pm

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Via The Cedar Lounge Revolution. Courtesy of Next Media Animation. Pete Baker

Sovereignty is less Ireland’s issue than not knowing what to do with it…

Mick Fealty on November 30, 2010, 1:17 pm

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A fair amount of rubbish is talked about Irish sovereignty. Despite what some have said, it is not like virginity (ie, once it is gone, it is gone forever). But then again, like sex, it is not something that Ireland likes to talk about in public either. In our Lisbon essays (scroll down) it formed the base of some of our liveliest contributions. I was particularly struck by Ben Tonra’s suggestion that the country was too timid to make any …

A Castle Built on Sand

Andy Pollak on November 30, 2010, 12:24 pm

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Six months ago I wrote in this column about the very generous welfare payments being paid in the Republic of Ireland, sometimes two or nearly three times the equivalent levels paid in the North(1). As the Republic now plumbs new depths of national indebtedness and near-bankruptcy, it is clear that this attempt at a welfare state was constructed on the flimsiest of foundations, a real castle built on sand. During the weeks of Ireland’s financial ‘bail-out’ crisis this month, the …

A debt unpayable without mass migration?

Mick Fealty on November 29, 2010, 5:25 pm

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And another from Henry whilst we’re there (and he’s thinking of his forlorn homeland), he makes an important point about the unreal nature of expectations in Dublin. In particular he takes Stephen Collins to task for taking: …as a given that Ireland’s growth rate from the mid 1990’s through 2008 or so reflected “normal economic and political conditions.” They didn’t. Ireland was playing catch-up with the developed industrial democracies – and during catch-up, one can hope for very high growth …

Euro crisis: “This might be the last chance to bring stability back to the European’s financial system…”

Pete Baker on November 29, 2010, 4:43 pm

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The day after the details of Ireland’s bail-out were revealed, the BBC notes the markets’ reaction On Sunday, ministers reached agreement over a bail-out worth about 85bn euros ($113bn; £72bn). On Monday, the euro fell 0.8% to $1.3136, its lowest since 21 September. And Irish, Spanish and Portuguese bond yields remained stubbornly high, indicating the market is not convinced European debt problems have gone away. Meanwhile, major European markets were also lower in midday trade. The euro also fell against …

A prediction of the banking crisis (from 1998)…

Mick Fealty on November 29, 2010, 12:18 pm

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Courtesy of Tom Prendeville… Mick FealtyMick is founding editor of Slugger. He has written papers on the impacts of the Internet on politics and the wider media and is a regular guest and speaking events across Ireland, the UK and Europe. Twitter: @MickFealty

Details of Ireland’s €85 billion bail-out agreed

Pete Baker on November 28, 2010, 6:58 pm

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As RTÉ reports, European Union finance ministers have agreed the €85 billion bail-out for Ireland. Of the total package €35bn is to be used to support the banking system. Of that €10bn will be used immediately to inject fresh capital as a buffer against expected loan losses. The remaining €25bn will be made available as a contingency fund, effectively a massive overdraft facility, to be drawn down by the banks as and when required. And the other €50billion? The Irish …

Likely to be bailed-out? Then it’s a ‘going concern’

Paul Evans on November 26, 2010, 5:20 pm

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I’m not quite sure why this story isn’t topping every news bulletin, but the US-based Auditor’s Blog has an account of the big four auditing firms’ appearance before the UK’s House of Lords Economic Affairs Committee to answer questions on competition and their role in the financial crisis. Do read the whole thing if you have time, but this line leaps out: The leadership of the Big 4 audit firms in the UK has admitted that they did not issue …

Euro Crisis : History repeats

Mack on November 26, 2010, 1:50 pm

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The Guardian report that – the Portuguese prime minister José Sócrates insists Portugal is under no pressue from EU states to accept a euro bailout. Meanwhile After Financial Times Deutschland reported eurozone nations and the European Central Bank were urging Portugal to follow Ireland and capitulate to financial aid, the office of the Portuguese prime minister José Sócrates said it was “totally false” that the country was under such pressure. So the politicians deny any contact while financial journalists say …

Euro crisis: “The avoidance of such a meltdown must be the over-riding interest of both Ireland and Europe now”

Pete Baker on November 26, 2010, 12:14 pm

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I’m not entirely convinced that the “strongest argument against a State default has disappeared” completely, but in the Irish Times Dan O’Brien provides the rationale behind the argument against a default in the short-term It is no longer in Ireland’s narrow national interest to prevent senior bondholders from suffering the consequences of their own bad judgement. But this is very unlikely to happen, in the short term at any rate. That is so because a consensus exists among European policymakers regarding …

Owen Paterson: “A settlement is precisely that – a settlement. It is not the opening round of a negotiation.”

Pete Baker on November 25, 2010, 11:00 pm

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You might have thought that when the Northern Ireland First and deputy First Ministers met yesterday with NI Secretary of State, Owen Paterson, and Treasury Finance Secretary, Mark Hoban, the first item on the agenda would be the still-to-be-agreed NI draft budget. After all, Peter Robinson and Martin McGuinness did tell us that the Deputy Prime Minister, Nick Clegg, had assured them that the NIO and the Treasury would be re-examining the figures. Strangely, there’s no mention of that in the OFMDFM …

Europe gets serious. May double the EFSF, may burn bank senior bond holders

Mack on November 25, 2010, 5:15 pm

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The Wall Street Journal are speculating that the size of the EFSF may double to almost €1trn, if German opposition can be overcome. This is an effort to assure markets that Europe can bail out Spain if neccessary. Doubling the EFSF’s capacity to €880 billion would remove any doubt about whether the facility has enough firepower to prop up Spain’s government. Such an expansion would require a bigger financial commitment from Germany, where many lawmakers and voters are skeptical about …

Even Anglo’s good assets are going up the flue…

Mick Fealty on November 25, 2010, 3:57 pm

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Without doubt, over a period of time, and in aggregate, market economies tend to be a lot smarter than planned ones. However, in the short term, market panics can cause a lot of unnecessary damage. Take the Anglo Irish Bank for instance, currently a byword for rash investment in property development. But in their haste to clear their books, they are also burning some of the good investors. Here’s Paul McMorrow in the Boston Globe: Last week, Anglo initiated a …

Quantitative Easing Explained

Dewi on November 25, 2010, 1:20 pm

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The UK can afford a £7bn loan to the ROI because it can just print it. Here’s a great video explaining the US $2.6bn QE programme. (“Is this an episode of the Twilight Zone?”). Here’s some Q&As from the BBC. Why are the UK’s actions different from 1920s Germany and Zimbabwe? Printing money can be defined as the central bank financing of government debts. This is what happened in both 1920s Germany and Zimbabwe and what the British government will …

Euro crisis: “Come on, Frau Bundeskanzlerin, history is knocking at your door.”

Pete Baker on November 25, 2010, 11:13 am

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The Irish Times reports the comments by chief of the European Financial Stability Facility, Klaus Regling. “There is zero danger,” Klaus Regling, chief of the European Financial Stability Facility (EFSF), told German daily Bild when asked if the euro zone could break up. “It is inconceivable that the euro fails. “No country will give up the euro of its own will: for weaker countries that would be economic suicide, likewise for the stronger countries. And politically Europe would only have …

“We all know they are going to be poor for a very long time…”

Mick Fealty on November 25, 2010, 10:53 am

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Without putting too much spin on it, here’s an interesting conversation on the FT site a few days ago when Lenihan (apologia in today’s FT) announced he was asking for money (to save what is left of the Irish banking system) from the Eurozone… (and for good measure, and some scary numbers, just listen to Brian Lucey on Vincent Browne’s programme on Tuesday night for just how far Ireland has bent over to service bank debt)… Mick FealtyMick is founding …

If fiscal sloppiness is not Ireland’s problem, then what’s the solution?

Mick Fealty on November 25, 2010, 10:30 am

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So much of yesterday was spent examining the government’s four year plan to get spending and tax in line with each other. It’s both a gamble and as Brian points out a malleable tool. Joan Burton’s main criticisms of it last evening were that it didn’t include Labour’s plan for a strategic investment bank (to be part funded by the national pension fund). But since the biggest impulse to rein down debt within three years is coming from the outside …

Sir Jon Shortridge concludes his inquiry…

Mick Fealty on November 24, 2010, 3:06 pm

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That’s what we’re hearing, although nothing’s officially been broken to the media as such. We understand that despite some internal lobbying from senior civil servants he is to recommend disciplinary action against Paul Priestley, the Permanent Secretary who drafted a letter attacking members of the Public Accounts Committee. It is also our understanding that the investigation went wider than Mr Priestley. As ever, be restrained in your comments! Mick FealtyMick is founding editor of Slugger. He has written papers on …