De Volkskrant on Ireland

De Volkskrant has a piece on Ireland, transgoogled here.

They start by saying that Ireland was a role model for austerity at the start of the year, but is now a reason for concern. They give two reasons, the first of which is the unknown but large cost of saving the banks. Secondly, they do not believe that the government will deliver in the next budget.

17 replies on “De Volkskrant on Ireland”

Is that a large whiskey in that chaps hand ? – might as well enjoy myself while I still can attitude !

or is it ice tea – coolly appraising the nature of the shit hole he has just bought with no water, electricity or tele reception and most importantly he has just noticed via superior map reading skills that the pub is a good 2 hours walk from his humble abode.

The Irish are bezuinigingsmoe.What does that mean? I see that De Volksrant quotes EUR 90bn. That’s the number people are going to remember.

The key phrase is that we need “nieuwe ingrijpende maatregelen”. Of course, the current government is quite likely to want to leave these “nieuwe ingrijpende maatregelen” to a new incoming govt in 2012, and not to have to do take them now.

The article also mentions that the Greens want to delay reaching a 3% deficit until 2020. Why do I suspect that they don’t understand the gaping financial pit this would leave the country in, in 2020 and for a long time afterwards, or that they don’t care.

I pity the poor taxpayers in 2020 and beyond that would have to pay that debt back. The term “financial oppression”would seem just about right and appropriate for that.

I too have concerns the government will not do what needs to be done at the next budget. We have already been promised
1. No property tax
2. No university fees
3. No tax increases
4. No PS pay cuts.

Doesn’t leave a lot except a bit of tinkering, some vague promises of savings in the PS a la Croke Park, and presumably hoping like mad for growth in 2011 which looking at the US and elsewhere at the moment may be misplaced. And if they’re thinking general election in 2011 why not leave it for the next lot?

Edward Hugh has posted stuff on his FB page this morning about Ireland. Why not have him contribute a post or two every so often on
Just a suggestion!

“Ireland does seem to have moved farther down the road than some in cleaning up the mess, so if you look at the spreads, it does seem others are being rewarded for leaving even more problems for later.” (E. Hugh)

What has the Irish government got to do with it?

@ Stuart

I wouldn’t rule out that this government fancies it’s chances at getting back in. Lenihan has built substantial credibility with the people of Ireland over the last year and the international media are heralding the decision-making and leadership – not that they have the real inside track. His counterparts in opposition look pale.

If the 3% target (for 2014) is on course by 2012, then the government would naturally aim to stay in power to finish the job. By that time concerns will have moved onto more constructive issues like repairing the mess, as opposed to the blame game seen to date. Still, the unwinding of the bank guarantees will prove tricky.

This is a genuine incentive for FF to meet the budget targets this year….so as you say, it’s just a matter of how the savings will be achieved – and how extensive the list is. It’s hard to be optimistic.


FF cleaned up on Dublin commuter votes during the tiger years. There are a quarter of a million people in negative equity who probably won’t be voting FF again for a while. That constituency is lost.

Just look at the CDS market – Ireland’s debt is sinking like only bankrupt nations do. Today markets price a 25% risk we default within five years. The high cost of credit means every bank outside Ireland is going to try to reduce their Irish exposures due to the risk. This sort of credit tightening just bleeds an economy until it becomes unbearable due to unemployment, defaults, and social tension. This is going to be painful on its own but, ever more painful, we need large fiscal cuts. I figure we are past the point of no return in terms of making it without help/default. The key question now is whether the ECB will freely let Irish banks borrow the 50bn euros needed to get through the next few months, or, whether the ECB/Germans will balk and make us go to the IMF sooner rather than later.

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