What Happens In Ireland Now The Government Has Collapsed?

[tallguy]

I have read that, in light of the recent resignation of the Irish Prime-Minister and the retraction of support for the government from the Greens, Ireland will now be forced into an early general election. Probably as early as mid-February. However, all of the major parties have pledged to pass the new austerity bill prior to any election. If that doesn't smack of a stitch-up of the electoral will of the Irish people I don't know what does.

Will they get away with it or will the whole Euro-imposed "deal" now begin to unravel? If it does, what will be the implications for the rest of Europe and, indeed, the rest of the debt-ridden countries of the entire Western world? Will a precedent be set?

How will the markets respond to this news in the morning?

Questions, questions.....

Edited January 24, 2011 by tallguy

[ralphmalph]

They are still f#ked and will remain f'ked.

It does not matter who is if government they are f'ked.

Even if they default they are f'ked.

[tallguy]

They are still f#ked and will remain f'ked.

It does not matter who is if government they are f'ked.

Even if they default they are f'ked.

Yes.

However, if they swallow the austerity measures, only they are f*cked (or, at least, that's the plan). If, on the other hand, they overtly defualt, won't this cause the risk of a lot of other countries' being f*cked to rise significantly as well?

[Vagabond]

Look how desperate Brian Cowen is to pass the budget. Resigned as head of party but staying in power to make sure the sale of Ireland to the Eurozone goes through. There is man who knows firmly which side his bread is buttered.

I'd guess the bill will pass before any GE, so it'll be interesting to see if any parties campaign to repeal it and how they'd do in the GE because of it.

[tallguy]

Look how desperate Brian Cowen is to pass the budget. Resigned as head of party but staying in power to make sure the sale of Ireland to the Eurozone goes through. There is man who knows firmly which side his bread is buttered.

I'd guess the bill will pass before any GE, so it'll be interesting to see if any parties campaign to repeal it and how they'd do in the GE because of it.

This is exactly what I am pondering on.

[Peter Hun]

They are still f#ked and will remain f'ked.

It does not matter who is if government they are f'ked.

Even if they default they are f'ked.

Doubly ******ed if they default as the economies they need to help them recover from default will be wrecked as well.

Also, Ireland is heavily exposed (200% GDP) to the PIIGS, taking them down will cause even more damage to Ireland. Even Iceland didn't destroy its pensions which were safe in non local currency.

Edited January 24, 2011 by Peter Hun

[I-hate-scumlords]

This is exactly what I am pondering on.

Surely there is an Anti EU party in Ireland is there not? the fact the Lisbon Treaty or whatever it was initially called failed in its first referendum shows there is vast anti EU feeling out there.

But then again Dave would have easily won last years election if he promised a referendum on the EU and he bottled it.

[bpw]

Can you explain why the EU is seen as the problem?

If Ireland was not part of the EU do you really think the Irish housing bubble would not have occurred? And would the banks have restrained from lending and inflating house prices? The cause of excessive lending was the Fed who lowered interest rates to ZERO in nominal terms and in real terms negative rates. The ECB were the ones fighting that policy. Only and ignoramus would lay the blame on the EU.

The only 'blame' you can reasonably lay at the feet of the EU is it effectively prevents the Irish from sovereign default. So let's say they default.... who carries the loss? You, me, the banks in England that leant them the money?

Something very sinister happened in around 2005. Go figure it out and then start talking about it.

Surely there is an Anti EU party in Ireland is there not? the fact the Lisbon Treaty or whatever it was initially called failed in its first referendum shows there is vast anti EU feeling out there.

But then again Dave would have easily won last years election if he promised a referendum on the EU and he bottled it.

Edited January 24, 2011 by bpw

[Vagabond]

Can you explain why the EU is seen as the problem?

Low rates ---> Too much credit ----> Bigger bubble

Inability to weaken currency.

Inability to default/haircut.

Rescue package on terrible terms.

If Ireland was not part of the EU do you really think the Irish housing bubble would not have occurred? And would the banks have restrained from lending and inflating house prices?

They are so you'll never know

The cause of excessive lending was the Fed who lowered interest rates to ZERO in nominal terms and in real terms negative rates. The ECB were the ones fighting that policy. Only and ignoramus would lay the blame on the EU.

How were the ECB fighting that policy, with their super high rates?

The only 'blame' you can reasonably lay at the feet of the EU is it effectively prevents the Irish from sovereign default. So let's say they default.... who carries the loss? You, me, the banks in England that leant them the money?

Yes. Anyone that lent them the money.

Something very sinister happened in around 2005. Go figure it out and then start talking about it.

I bet Erranta knows what it is.

[dubsie]

Yes.

However, if they swallow the austerity measures, only they are f*cked (or, at least, that's the plan). If, on the other hand, they overtly defualt, won't this cause the risk of a lot of other countries' being f*cked to rise significantly as well?

Austerity is forced on all countries regardless of how you

vote. No country will be allowed to default and to

be fair the best thing for all of us would be to default.

The elite are robbing our future.

[aa3]

Whoever wins the election will also support the takeover from the EU. Anytime real opposition comes it gets outlawed.

[indirectapproach]

"The cause of excessive lending was the Fed who lowered interest rates to ZERO in nominal terms and in real terms negative rates."

I don't think that is correct. The blame game runs that the low European interest rates from c. 2000 - c.2006, lower than UK and US interesest rates, contributed strongly to the Irish asset bubble.

If you are suggesting the Irish would have created a malign asset bubble in the noughties in or out of the single currency, well fair enough. You may well be right about that.

But I can't see how the Fed has anything to do with it.

[JPJPJP]

I am wondering about all the international companies that set up 'tax efficient' operations there based on the largesse of recent governments

Coca Cola, Google, JnJ, Baxter, Microsoft - the list goes on

Essentially they opt for a private structure to avoid disclosure and take the low tax rate to shield earnings from higher taxes in the US (mainly)

Would a new government tap them up for a few more euros and risk them going?

[shipbuilder]

Surely there is an Anti EU party in Ireland is there not? the fact the Lisbon Treaty or whatever it was initially called failed in its first referendum shows there is vast anti EU feeling out there.

But then again Dave would have easily won last years election if he promised a referendum on the EU and he bottled it.

Sinn Fein are the closest thing to an anti-EU/anti-bailout party.

[Nationalist]

Biffo's problem is that he has already drawing down and spending the money on the assumption that the Bill would be passed. If it doesn't pass Ireland is technically bankrupt.

[tallguy]

Biffo's problem is that he has already drawing down and spending the money on the assumption that the Bill would be passed. If it doesn't pass Ireland is technically bankrupt.

Is that true!

Has Ireland been given money that should only be available on the basis of the austerity measures contained in the bill being enacted such that the acceptance of the money is premised entirely on an assumption that the bill will be passed?

Seriously?

Edited January 24, 2011 by tallguy

[ShedDweller]

Sinn Fein are the closest thing to an anti-EU/anti-bailout party.

And they have experience with banks ! It's a win-win !

[@contradevian]

Yes.

However, if they swallow the austerity measures, only they are f*cked (or, at least, that's the plan). If, on the other hand, they overtly defualt, won't this cause the risk of a lot of other countries' being f*cked to rise significantly as well?

They would only take down the banks in those other countries, like RBS in the UK, doubtless our bankster run country would agree to continue bailing it out, in which cased we'd be fcked too. But it would be good to be rid of that too!

[@contradevian]

I am wondering about all the international companies that set up 'tax efficient' operations there based on the largesse of recent governments

Coca Cola, Google, JnJ, Baxter, Microsoft - the list goes on

Essentially they opt for a private structure to avoid disclosure and take the low tax rate to shield earnings from higher taxes in the US (mainly)

Would a new government tap them up for a few more euros and risk them going?

I did read that not even these companies pay the full irish CT due to revolving door nature of their tax affairs, and industrial scale tax evasion. Every where is debt yet the corporates are awash with cash. Fancy that!

[fluffy666]

Is that true!

Has Ireland been given money that should only be available on the basis of the austerity measures contained in the bill being enacted such that the acceptance of the money is premised entirely on an assumption that the bill will be passed?

Seriously?

It's almost as if the rulers (and their rulers, the banks) hold democracy in complete contempt..

[ShedDweller]

They would only take down the banks in those other countries, like RBS in the UK, doubtless our bankster run country would agree to continue bailing it out, in which cased we'd be fcked too. But it would be good to be rid of that too!

Yeah it's a wider issue .. the issue is can the banks losses (world wide) really be bailed out by the tax payer? or are they too big? I think they are too big .. it's not case of IF they will fail but when .. The Irish might as well press the button as anyone else.

[Patfig]

Eire is now SOLD (sstc), move along, Spain will be up for sale soon too.

[Nationalist]

Is that true!

Has Ireland been given money that should only be available on the basis of the austerity measures contained in the bill being enacted such that the acceptance of the money is premised entirely on an assumption that the bill will be passed?

Seriously?

Yes, he's spent €10bn of the €67bn already (bailing out banks of course.)

I wonder if the EU/IMF/UK loan is pledged against anything? There was talk of putting motorways, power stations etc on the line as security. Did that ever happen? Could they have done it without telling anyone? Where is the text of the loan agreement? We should be told.

Edited January 24, 2011 by Nationalist

[leicestersq]

I am just perplexed by all of the goings on, not just in Ireland, but around the world.

From what I hear about Ireland, they have a hugely generous benefits system, and tremendous largesse in the public sector. It sounds as if they could balance their budget quite easily if they wanted to.

Paying off the debt though, that is another matter.

No political party though, wants to grasp the nettle, and do the right thing. For me the right thing would be to tell the creditors to get stuffed, balance the budget so there is no need to borrow, prosecute those at the banks for anything that even smells like a dodgy loan and see what happens in court, go after the assets of wrongdoers, and let ordinary borrowers go bankrupt like they can in the UK.

No one in Ireland, or that matter in the Western world, seems to want to face up to this reality, instead they find someone else to borrow more from, and carry on as before. So desperate have things become, that the Irish Central bank have taken to printing some extra Euros to bailout their busted and corrupt banks, to keep these zombies going. Insanity.

I just wonder, if irony of ironies, Sinn Fein get in power in the republic, and do the right thing. Prosecute the bankers, seize their assets, and return them to the creditors of failed banks. Would they do this? Would they also balance the budget, and shun the elite that currently feed from the public sector trough?

And what will our government do? They think that growth will pay the bills, but what if that doesnt happen? Can they overcome normality bias, and deal with the reality of the cancer that are our bankers and lock the bad guys up? Can they cut public sector wages and benefits, and reduce our expenditure on pensions, so that our budget becomes balanced again?

I have little confidence that they can, they talk tough, but smell strong.

Just when are the December PSBR figures out? Does anyone have a calendar of release dates for that most important of figures?

[MinceBalls]

They are still f#ked and will remain f'ked.

It does not matter who is if government they are f'ked.

Even if they default they are f'ked.

If they take default as an option some might say they are not f*cked but instead are at the start of a recovery. It won't be nice for them and probably will drag us down too but they can then start afresh, learn to live within their means and attempt to become a little more self sustainable and eventually life might be a hell of a lot better for them.