Irish Government On Brink Of Dissolution

[stormymonday_2011]

The Greens have quit the coalition and some FF back benchers have declared they will not support an IMF/ESFS imposed austerity budget.

An election is expected in weeks.

6.01pm: Sources within Fianna Fail have told The Guardian tonight that they are already considering 16 December as the date of a general election if Brian Cowen dissolves the Dail tomorrow.

He is coming under sustained pressure tonight to hand in his resignation to President Mary McAleese tomorrow morning.

Henry McDonald also reports that the government's four year economic plan is scheduled to be published by the Department of Finance on Wednesday -- assuming there is still a government stil in place.

Reuters are also reporting that the opposition Labour party has said there is no way they could form a government with Fianna Fail, but that they are confident they could form a coalition with Fianna Gael.

http://www.guardian.co.uk/business/2010/nov/22/ireland-imf-eu-bailout

http://www.irishtimes.com/newspaper/breaking/2010/1122/breaking19.html

If the Budget is not passed then the bailout is on hold (or rather they will have to find some other means of funneling money to the European and UK banks who were to be its ultimate beneficiary).

Mods -please merge with other Irish thread when appropriate

Edited November 22, 2010 by realcrookswearsuits

[Pytyr]

The Greens have quit the coalition and some FF back benchers have declared they will not support an IMF/ESFS imposed austerity budget.

An election is expected in weeks.

http://www.irishtime...breaking19.html

http://www.guardian....-imf-eu-bailout

If the Budget is not passed then the bailout is on hold (or rather they will have to find some other means of funneling money to the European and UK banks who were to be its ultimate beneficiary).

Mods -please merge with other Irish thread when appropriate

linky's not working

[stormymonday_2011]

linky's not working

Apologies. Fixed

[Number79]

Wow. This story is moving quickly.

not as quickly as the young people.

ferrys are all full

[Tonkers]

Quote from someone on here:

"All I wanted were cheaper house prices, not for the world to implode"

[erranta]

linky's not working

Have more of the same!

Sound a bit familiar? This is how they crash countries around the World. Look at the EXACT same policies being implemented by Cameron in the UK and Irish Govt.

Note the date!

Another IMF Crash - Argentina

by Mark Weisbrot

The Nation magazine, December 3, 2001

Franklin Serrano, an economist at Federal University of Rio de Janeiro, recently lamented the large proportion of graduate students in economics who leave for the United States. "But there is something worse than them leaving. It's when they come back."

"Brain damage," he says, "is worse than brain drain."

Argentina is the latest Latin American economy to be mismanaged into a crisis by US-trained economists. Unemployment is above 17 percent, the economy is in its fourth year of recession and the country is now in the process of defaulting on its unpayable foreign debt. It's not easy being the poster child of neoliberalism. Argentina's currency has been pegged to the US dollar since 1991. This worked for a while, but in the past few years the peso has become highly overvalued. Rather than devalue the currency, the country piled up mountains of debt to prop it up and watched its interest rates soar as investors demanded ever higher risk premiums. For comparison, imagine the United States borrowing $1.4 trillion (70 percent of our federal budget) in order to keep our own overvalued currency from falling.

This is not the first time in recent years that the IMF has burdened a country with billions of dollars of debt in order to prop up an overvalued currency. In 1998 it did the same thing in Brazil and Russia, with predictable results. In both cases the currency collapsed rather quickly in spite of the loans. And in both cases the economy responded positively to the devaluation, with Russia in 2000 registering its highest growth in two decades. The fund's argument in the case of Brazil and Russia was that if the currency was devalued, the result would be runaway inflation. But that never happened.

The IMF has also insisted on budget austerity for Argentina- which makes about as much sense during a recession as high interest rates. First in line for cuts have been state pensions, salaries, unemployment benefits and other social spending, insuring that the burden of "adjustment" will continue to fall, as it usually does, on those who can least afford it. And even the debt "restructuring"-i.e., default-now under way may not lead to economic recovery: If the currency remains fixed at a rate that investors still see as overvalued, the crisis will continue until it collapses.

Why does the IMF seem incapable of learning from repeated failures? The interest of foreign bond-holders cannot be overlooked: The longer the fixed exchange rate holds, the smaller will be the losses of US lenders even if the peso eventually collapses. But there has been a broader political concern as well: Argentina has done everything that Washington has told it to do, and the economy is a wreck. As a result the Bush Administration, despite its distaste for IMF "bailouts," was reluctant to be seen as abandoning the Argentine government. It kept pouring money in until it became clear that Argentina's debt could never be repaid.

The sacrifice of Argentina's economy for the sake of Washington's imperial interests and the interests of "emerging market" bond-holders fits a pattern at the IMF, including some of the most high-profile interventions of recent years. In Russia and the transition economies, the first priority has been to execute a rapid, irreversible change to a market-driven society, regardless of the economic consequences. Russia lost half its national income in about five years of IMF-led transition, an economic decline never before seen in the absence of war or natural disaster. In Asia, the fund's desire to open these economies to US capital flows-in countries that because of their high savings rates had little need for foreign borrowing caused a severe financial crisis in 1997-98. The fund then exploited the crisis to further open these economies, worsened it with exorbitantly high interest rates and fiscal austerity and convinced the governments of the region to guarantee the debt owed to foreign lenders.

The IMF is able to decide these major economic policies for dozens of countries because it sits atop a creditors' cartel, much like the OPEC oil cartel. Those who refuse to take the fund's "advice" find themselves ineligible for credit from the World Bank and other multilateral lenders-like the Inter-American Development Bank or G-7 governments-or even for private credit.

The fund's aid packages are generally reported approvingly in the press as "bailouts." But it is the bankers and bond-holders, particularly foreign, who are being bailed out; the people, especially the poor, are tossed overboard. Over the longer term, the neoliberal program of the IMF and the World Bank-and their ability to enforce it-has contributed to a substantial decline in economic growth over the past twenty years throughout the vast majority of low- and middle-income countries. In Latin America, per capita GDP has grown a mere 6 percent over the past two decades, as compared with 75 percent in 1960-80.

As Latin America's economies grind to a halt, dragged down by the recession in the United States, the dismal reality of this long, failed economic experiment is sinking in. The reign of US-trained economists and their sponsors in Washington may be coming to an end.

Mark Weisbrot, co-director of the Center for Economic and Policy Research, in Washington

http://www.thirdworl..._Argentina.html

Edited November 22, 2010 by erranta

[okaycuckoo]

Link not working.

I wonder if Ireland is headed back to the early 80s, when they had three elections in two years.

I like this about coalition government - when political consensus breaks, the ruling party can't whip everyone into shape.

[Number79]

Have more of the same!

Sound a bit familiar?

Note the date!

http://www.thirdworl..._Argentina.html

i already mentioned arentina in the other thread.

a parallel to Czechoslovakia 1939 has also been drawn and doesnt look so ridiculous any more.

"You know ... I read this and the first thing that came into my mind was Czechoslovakia March 16, 1939.

This is a bloodless invasion: a total loss of sovereignty and a seizure of national assets. Ireland will become a protectorate of the EU.

If the Irish do not form a decent government soon, a "interim" governing board will be appointed for them by the EU. I would put money on that."

Edited November 22, 2010 by richyc

[TheCountOfNowhere]

Maybe the Irish aren't as daft at their British sheeple.

They are refusing to be forced into debt that is not theirs.

Well done the irish.

Unfortunately this will have serious repurcussions...but still...well done...the banks shouldnt have been bailed out in the first place.

[uptherebels]

Biffo is going to make a statement at 19.00hrs.

[Number79]

Maybe the Irish aren't as daft at their British sheeple.

They are refusing to be forced into debt that is not theirs.

Well done the irish.

Unfortunately this will have serious repurcussions...but still...well done...the banks shouldnt have been bailed out in the first place.

not as daft?

didnt they vote themselves into this mess?

ireland is fubar

[TheCountOfNowhere]

not as daft?

didnt they vote themselves into this mess?

ireland is fubar

Yes, so did we...they seem to have realised it's gone far enough.

[Number79]

Yes, so did we...they seem to have realised it's gone far enough.

they were warned of this but at the time their stupidity was only surpassed by their well established greed so they voted for the euro.

too late now.

[brassed off brit]

If it all goes t1ts up over there, then their banks fail....will this kill our banks too? is this why cameron is so desperate to give them billions that we really don't have?

Are we seeing the first domino fall? are we next?

[uptherebels]

If it all goes t1ts up over there, then their banks fail....will this kill our banks too? is this why cameron is so desperate to give them billions that we really don't have?

Are we seeing the first domino fall? are we next?

Probably, and yes, about 24 hours afterwards.

[davedavies]

If it all goes t1ts up over there, then their banks fail....will this kill our banks too? is this why cameron is so desperate to give them billions that we really don't have?

Are we seeing the first domino fall? are we next?

We will print.

VAT cut to 15% in Jan instead of 20%. Oh no sh!t we have deflation, print, print, print.

Don't you think they have this stuff figured out?

[blobloblob]

I can't believe the news today.

[stormymonday_2011]

Key point to note here is that while an election probably poses no immediate threat to the finances of the Irish government who don't need to go back to the markets until the middle of next year it is a different story for Irish banks

http://ftalphaville.ft.com/blog/2010/11/19/410356/on-declining-irish-deposits/

The run on deposits mean they may have burned through their current ECB collateral by the end of December.

This is why the bailout was being treated as so urgent.

If the Irish banks start defaulting then it will have implications right across Europe.

In fact the whole bailout charade was an attempt to give European taxpayers money to the European banking system by disguising it as a loan to the Irish people.

Direct taxpayer loans to the banks from the ESFS would not be legal under current European law

Its a con where the Irish people pay a 6% mark up and endless austerity for the privilege of bailing out Europes banker's

The problem is that it appears the ruse has been rumbled.

Edited November 22, 2010 by realcrookswearsuits

[R K]

Will Mrs Merkin appoint herself Supreme Excellency?

[campervanman]

We will print.

VAT cut to 15% in Jan instead of 20%. Oh no sh!t we have deflation, print, print, print.

Don't you think they have this stuff figured out?

'They' would have done that. 'These' are at least having a go at doing the right thing. Why announce a vat increase if you have no intention of doing just that? At least let them have the opportunity to pay down the debt before you brand them as all the same.

[R K]

Cowen's said he'll quit and call an election in Jan - AFTER the bailout measures have been passed.

Can't see that holding up for long.

[davedavies]

'They' would have done that. 'These' are at least having a go at doing the right thing. Why announce a vat increase if you have no intention of doing just that? At least let them have the opportunity to pay down the debt before you brand them as all the same.

The £7bn British bail out of Britain suggests differently. (No typo)

Pre-announcing 20% VAT lets companies put their prices up in advance so that when you do actually drop it to 15% the "deflationary" shock is the so much greater.

[Errol]

"All I wanted were cheaper house prices, not for the world to implode"

Think of it like a boil. It needs to be lanced and the results are messy and very painful.

Edited November 22, 2010 by Errol

[Malthus]

Cowen's said he'll quit and call an election in Jan - AFTER the bailout measures have been passed.

Can't see that holding up for long.

Game over, we shall see if the elite/church/bankers/developers coalition that has run Ireland for decades will be voted out this time

My money is on a re-branding exercise

[okaycuckoo]

they were warned of this but at the time their stupidity was only surpassed by their well established greed so they voted for the euro.

too late now.

That's actually unfair on the Irish.

I recall watching a TV chatshow in 1997 - Late Late Show - about excessive house prices. Almost the entire nation tuned in because it was of such great concern. Genuinely depressing, and people in general felt alot of anguish. The result was that the Man from de Gubmint proposed loosening up the planning system, which as we all know worked out super!

Point is, Irish people have always seen this as a problem. Many profited, but most just had to ride the tidal wave of UK/German credit until it smacked onto the rocks.

Edited November 22, 2010 by okaycuckoo