The Department of Finance has released its pre-budget outlook: you can download it here.
One striking projection: GNP will shrink by 10.5 percent in 2009 [the contraction in GDP will be 7.5 percent].
RTE news had a story last night on a report on the Irish hotel sector written for the Irish Hoteliers Federation by Peter Bacon.
The highlight:
John Kilraine: Economist Peter Bacon, who compiled today’s report, said across the country zombie banks are allowing zombie hotels to remain open because they owe the banks a lot of money.
Peter Bacon: The problem is the most insolvent hotels are not the ones that are going under and the reason they’re not going under is because it’s not in the banks’ interests to foreclose upon them.
And the reason it’s not in the banks’ interests to foreclose on the insolvent hotels is because the banks want to sell these loans on to NAMA at their “long-term economic value”. Why foreclose on them now when you can get NAMA to carry the can? The report recommends that stakeholders
should ensure that banks fully recognise bad loans within the hotel sector and face any capital adequacy issues which might follow.
The report also warns about the potential damage to profitable hotels if NAMA shows forebearance to those hotels with bad loans.
Now if I recall correctly, the NAMA plan was recommended to the government by an economic consultant of some sort.
This is a link to a nice conference on the Australian economy which colleagues at the Melbourne Institute ran a week or two ago. Some good presentations (audio links also available). Education session is good – I thought Andrew Leigh gave a great presentation which hits a lot of issues and views that I would share (raise quality and quantity). Ditto innovation. Some of the political speeches are as you would find them anywhere although I thought the Education Minister gave a smart and focused look at what their priorities are in this domain.
The papers by Van Ours and Gregory repeat a point made often here on labour market response – Van Ours nails this as get active in labour market and keep folks at work, nothing is irreversible, this is a crisis response and not a ‘steady state’ labour market strategy so don’t compare to the literature on Active Labour Market Policies which, he agrees, are pessimistic and carry sizable deadweight.
Writing in today’s Irish Times, property consultant Bill Nowlan writes:
Nama’s prime job is to get back the €54bn given to the banks to enable it to repay the ECB.
I don’t want to pick on Bill Nowlan because this kind of comment appears regularly in all our media outlets from commentators who are attempting to explain NAMA to the public. However, I do think it is worth pointing out that NAMA is not borrowing money from the ECB.
What I find odd about this is that a plan that really isn’t very complicated—the Irish government issues bonds to the banks in return for property-backed loans—has been described so often by government sources as a complicated operation involving the ECB that pretty much everyone now believes that this is the case. But really, it’s not.
I’m really not sure what I can say about this other than it’s pretty sad that a program involving spending €54 billion of public money is so poorly understood.
A recent international conference held in Brussels discussed strengthening research and research policies in Europe. The Conference Programme addressed issues such as the long term perspectives for research and researchers; developing world-class research infrastructures in Europe; improving funding conditions for European research institutions; research and innovation during the current crisis; priorities for EU research policies post 2010; S&T specialisation; indicators to monitor progress towards the European Research Area and a knowledge-based economy. The papers and presentations can be found here. The conclusions of the conference sessions can be found here.