White Paper 2013 Estimates of Receipts and Expenditure for the Year Ending 31 December 2013


81 replies on “White Paper 2013 Estimates of Receipts and Expenditure for the Year Ending 31 December 2013”

The central banks seigniorage thingy is considerable……….

There was a little guy (S$£T) from Christians school or something in the new Halls pictorial weekly show.
He came up with the best idea for taxing the poor – have a second mid week lotto (although I guess that revenue stream will soon be taken away from the state also)

The only tax I would put into the budget is a £20,000 tax on all private car imports in the hope the state would not collect.

I see we have given the ELG fees back to the banks. ELG receipts dowm from 1025 million in 2012 to 433 in 2013.
A give away to ‘our’ banks of €591 million.
When will this stop.
That is a disgraceful decision. In addition to being a bad decision in itself, when has the Dail voted to remove the ELG. Why is this reduction in the white paper?

@ Joseph,

The ELG was extended for six months this week so it is due to expire at the end of June. The figure in the White Paper reflects six months of ELF fees rather than 12. If the ELG is extended again next July the 2013 figure will be closer to the 2012 figure.

Europe expects its little children to engage in commerce with no money tokens.
Have they met Daisy the cow ?
How many Pints of Beamish to the average Friesian heifer

Have our agricultural economist engaged with this complex equation.
What about those nasty externalties ?
Such as stepping on Cow Manure while sipping a nice creamy pint in the pub.
It will be like the Puck Fair in the old days I imagine.

Service to national debt : 8.111 billion Euro thingies
That other bank……….. : 3.085 billion Euro thingies
Service to the Brussels jet set :1.044 billion Euro thingies.

Look lads this is very simple – they want to close the gaff down.
We cannot pay these costs without another bank credit boom………..bust.

Maybe when the banks are whole again they can waste more physical capital via one final credit boom to end all booms so as to repay the interest from the last bust.
Then of course we must have a bigger boom to repay……….

Perhaps Seamus could explain why debt service costs are expected to rise by 1.6bn in 2013 (from 6,474m to 8,111m)

Additional borrowing requirement per the NTMA is around 11.6bn. There is also a 5.6bn 5% bond to refinance.

Assuming all this is financed at 5% then how does this raise debt service costs by 1.6bn? It looks more like 1bn to me.

It’s not the pro notes as this is classified under capital, non-voted while debt service is under current, non-voted.


I may stand corrected.

But even if the guarantee is due expire in six months, is it not the case that the guarantees already given on both deposits or bonds must be guaranteed to maturity, regardless of how far out that maturity date is.

On that basis the revenue stream should not close on June 30th, if that is the end of the six month period, even if the State no longer explicitly guarantees new deposits or bonds, as the State is still explicitly liable for deposits or bond already guaranteed to that point.
The ELG income stream should therefore extend out long after the ELG guarantee expires.
There is of course an implicit guarantee to all banks, even dead ones apparently!

There was no interest charge on the pro-notes in 2011 and 2012. There will be a charge of about €1.7bn in 2013. However it’s only a paper transaction within the State between the DoF and CB.

However Eurostat requires it to be included in the General Gov Balance calculation.

Welcome back. Your own venerable Prof. Lucey suggests some radical action in today’s paper..
If your figures are right then interest payments etc. would appear to equate to the deficit or near enough. How about a moratorium for ten years (like the Greeks) on the interest…inflation should take care of it then.

I think the max maturity under ELG is 5 yrs. it would mostly cover the bond issuance. Deposits are unlikely to be for more than a year..especially corporate ones that can disappear in a flash.

I would like to see a divorce of tax from the revenue side of things , but this seems impossible in the eurozone.
In a semi ideal sov world tax could be used to change the physical world , not to follow it around with a begging bowel after bank credit has done real damage to our current account.
We have a extreme monetary crisis , rather then a resource crisis as the Euro monetary crisis has caused the real resource crisis.

So the entire thing is looked at back to front.

Cork city was busy with traffic all week yet this export of hard currency via BTU consumption is looked at like a revenue stream which it sadly is in the eurozone.
There has been a dramatic stratification in the new car market and this could be evidence of a form of capital flight as people cash out buying expensive diesel BMWs while they still can.
It works on a individual level but not from a holistic point of view.

We cannot stop the stock and flow problem within the vehicle sector as it is too far gone now.
Private cars 4 years old and older : 75%
Private cars 6 years old & older : 56 %

Private cars 4 years old and older : 79 %
Private cars 6 year old and older :60 %

If we look at Y2007
Private cars 4 years and older : 65 %
Private cars 6 years and older : 50 %

But We should look at putting the energy exported for private cars we don’t need into rational domestic fixed transport capital formation.

And indeed our vehicle fleet which actually does some work.

This is ageing far more rapidly.
Vehicles 4 years old and over : 57 %
6 years old and over : 40 %

Vehicles 4 years old and over : 73.4 %
Vehicles 6 years old and over : 50.5 %

Vehicles 4 years old and over : 82.3%
6 years old and over : 57.7 %

I am suddenly confused on the prom note payment.

Just to be certain, we are still only nudgeting to pay 3.1bn, correct?

I thought the White Paper had double Budgeted for a moment (the 3.1bn payment AND the interest of 1.7bn).

@ Dork
But then the cost of travelling on public transport is also rocketing. The race to the bottom continues. The helicopter view is being lost in the short term ‘noise’. The next step down to ‘hell’ begins shortly for many /most people. By 1H13, I wonder whether complacency will have begun to turn…..

I should add that the increase in public transport again seems only /mainly related to maintaining or servicing the related public service (fixed) costs. Private enterprise such as Aircoach, etc seems capable of providing an alternative, much better model.

Hey ,even I would even agree with the Mc that half empty trains don’t work.
Which is why they must push up the ticket price , which means more empty seats , which means they must push up the price etc etc etc.
You get the drift.

We have to get away from thinking about revenue and instead thinking about real resource burn.
I.e. – the real physical world of inputs and outputs ,not revenue as you can only tax the money supply.

We have essentially a Cuban like post Soviet crisis but it much worse then that – the Soviet this time continues to exist & wants us to buy more Mig 29s with our money rather then credit down.

I don’t want to see more of this

Or headlines like the absurd Nissan Quashai being the 3rd best selling car in Ireland.

I mean , do yee guys even remember how different the last mini depression was in the early 80s ?
Almost all the cars bought back then were cheap 1 litre petrols !

You little pixie heads you

@ Dork
Not sure we were happier. It was a small world back then, now at least we have the opportunity (not guarantee) for something better, somewhere…..! It is clear also that ‘real money’ is (painfully) becoming ‘grounded’, moving back to reality.
People move more slowly however. Spent the last few weeks interviewing ‘Celtic Era Cubs’ (now later 20s) for an MNC…..much less ‘real’ and hungry (capable) than we we in 1982, despite all the education.

The fixed cost public transport system ‘s downward spiral (and increasingly fewer ‘passengers’ /’revenue’ is a good analogy though for what’s really going on in the economy…..

@ Dork

Surely a big bang of banning cars or a massive energy crisis is not desirable in a country as irresponsibly ‘planned’ as Ireland. It would give an instant post apololyptic feel to large areas of the country.

There is a natural migration of people towards towns and Cities happening at the moment. We need panning to supplement this and accommodate families in Cities and towns, instead of shunning people to the suburbs and one off housing once they decide to procreate.

Cycling is sky-rocketing in Dublin and Luas numbers are strong, as citizen dump the car. After concentrating on the car for multiple decades Dublin City Coucil appear to be giving serious thoughts to ideas such as shutting down the north Quays to cars, something unthinkable a decade ago. There is a reasonably big shift in behaviour happening. Encouraging cycling has the added benefit of helping with our other major health crisis after alcohol abuse…obesity.

It’s good to see the our contribution to the EU budget will increase. They did promise us ‘growth’ …. they just didn’t mention it would be their budget that would be growing.

Trebles all round. Or, as I am led to believe, bottles of wine with a retail value well north of €100 each when EU elites have their meetings and dinners.

Anyone else think that people are really going to hunker down on spending after Christmas? Or that some of these revenue figures may end up being a little optimistic?

@ Rob S

The Stability Programme Update April 2012 Page 24:

it is important to also bear in mind that the GGB estimate for 2013 makes allowance for some €1.9 billion, or over 1% of GDP, in interest on the Promissory Notes. In light of the interest holiday secured on the Promissory Notes for 2011 and 2012, there was no impact on the GGB in those years arising from this interest. However for 2013, this represents a significant additional General Government expenditure item that must be allowed for in the forecasts and is part of the reason why the GGB is expected to decline to just –7.5% of GDP next year.


I said taxing PRIVATE car imports from 2013.
Not commercial or public service vehicles.
The remaining total car stocks value may then rise rather then fall (even as the cars get older) as there is a glut of cars not unlike houses at the moment.

I am talking about the most effective capital control this fiefdom can achieve.

Imagine the extra work for car mechanics ?
They are already doing OK again.

I just don’t get this private car subsidy in Ireland.
Imagine if one of the most valuable capital goods in a business stood in a driveway all day ?
How can you justify that ?
We need to direct the remaining capital towards stuff that actually does some work – be it taxis , car mechanics , buses , lorries , trains.

The fact that it is a effective capital control could be a problem as capital controls = no Eurozone.
But you could dress it up with Green credentials and stuff.

This country has been destroyed by guys seeking revenue as if it were a little shop or something.
In fact little shops that are a success consider the shop from a holistic level rather then just looking at the daily /weekly revenue stream.

The country is dying because real capital is leaking from the system.
Its not dying because we are running out of a symbolic tokens…….although tax efforts to collect these declining symbolic tokens is adding to the chaos.
Indeed a exchequer which does not consider a positive symbolic money supply its duty works as absentee landlord.
You can only really tax the money supply , any efforts after that is pointless in the long run as you run down the capital base.

Are we going to pay Canada Life to take Irish Life of the State hands?
That is the way it seems to me.

John Ihle in the SBP has the story on the reopening of discussions to ‘sell’ Irish Life. Sorry, John, give it away. In fact pay Canada Life with future tax receipts to take it off the State’s hand.

“Another key factor in the renewed discussion was a government assurance that tax relief on pension contributions wouldn’t be cut to the standard rate, a change that would have hit Irish Life-the biggest pension provider in the Irish market-especially hard.”

I find both this and the ELG give away utterly unforgivable.
The bigger issue by far is that nobody, as far as I can see detect, sees anything untoward in any of this.
Maybe we should pay Canada Life to Irish Life off our hands. Why not. We no longer have the moral courage to take charge of our own affairs or to act as a nation.

@ Joseph

You seem to have a very unique take in the “merits” of keeping the ELG in operation. It’s contingent liability status, the fact that we own the vast majority of the banking system and are as such taking money from ourselves, the fact that’s it’s an enormous subsidy for the richest people in the country and the fact that the banking system will remain banjaxed so long as the ELG remains in operation all seem lost on you.

Good spot.
That looks like a great deal
“Credit Suisse: – Following the buyback, more than 80% of Greece’s debt will be held by the official sector and seems to be in the process of being – for all practical purposes – transformed into a “zero-coupon perpetual bond”. The average maturity on the EU/EFSF loans (which will soon represent 65% of Greek debt) isincreased to 30 years, while there is a ten-year grace period. At the same time, the interest rate on the bilateral loans is below 1%, while interest payments on EFSF loans have been deferred by ten years. This is the third time that euro area countries have restructured the maturities and interest rates of their loans to Greece and they seem comfortable to continue doing so.”

Zero coupon perpetual bonds ….now that looks like a good idea for the 64b of bank debt we took on. Maybe we could get the Greek Finance Minister to negotiate for us.
Enda is reported in the Sindo as saying in the Dail last week that he wanted to convert ” our overdraft into a long term mortgage”. Zero interest or close would do just fine.

Some sort of Consol is it ?

The only good deal that I can see is getting out of the Eurozone and refusing to engage with false market state “savings” memes which are really transfers of wealth rather then organic real capital growth.

It (EEC)has been a series of core wage deflations & subsequent pointless capital exports to conduit economies since the days of the snake in the 70s.
Forming a series of Giant monetary onion rings.

We had this before remember – the 1970s agri land / car boom of the time – all that capital going up in smoke & methane and calling it “Growth”

Countries simply can’t adjust their own internal systems without their own currencies and of course their “leaders” having a sense for their country also.

Because the accounting is using a false unit of exchange any minister can claim he is making savings by liberalizing a market when in fact its just a simple wage arbitrage game which wastes real capital because of duplication in services.

We now have a global wage arbitrage game
A inter euro wage arbitrage game
And a domestic wage arbitrage game going on.

But where is the wealth creation ?

Have they learned nothing from the Irish ferries syndrome ?

All of the high energy input industries within Ireland suffered from this wage arbitrage / deflation.
Be it Airlines , construction , agri processing , ferries etc etc.
This gave a false signal.
To fill the apparent demand hole the banks created consumer credit which was obviously malinvested as there was no rational wage demand signal.

Why did we really suffer from the biggest drop in airline passengers in Europe
See above.

Europe is the heart of Darkness.

@Bomd. Eoin Bond

I do appear to be one of few that want to keep EGL.
My reasons are simple.
1. The State currently charges over €1billion for ELG, badly needed revenue.
2. In return the State offers a guarantee, bought at the expense of bankrupting the country. The ELG is a small price for the banks to pay for continued existence.
3. As bond holders and depositors are guaranteed there is no subsidy to them because the bank guarantee should be reflected in depositors and investors being willing to invest at lower rates. I trust this fact is not lost on the banks.
4. If we are paying ourselves, as you say, what is the problem from the point of view of the banks or government to leave things as they are.

5. AIB made as loss of €1216 million in the six months to June 30th 2012. The ELG for that period cost AIB €215 million. It is clear therefore that ELG is not the major business obstacle preventing the banks from returning to profit. Yet it is being presented that way.

6. I am tired to distraction from giving to the banks, banks that in turn take but give nothing. Here is a thought. For every 1% cut in bank salary and pension costs, the State will reduce ELG by 4%.
That means that a 25% pay cut will get all banks out from under ELG and make them much more profitable. Its called quid pro quo.

But I have to concede the decision has already been made. No cost benefit analysis, not even the back of postage stamp. Nothing.
The ‘new’ Secretary of the DOF, Mr Moran has said ‘Its the right call’.
How about that for a cost benefit analysis!

And, if John Ihle’s article is correct, I stand over my assertion that we are paying to have Canada Life take over Irish Life. That is an even more stupid, reckless decision that the ELG one. The reason being that legal control over ~30 billion of assets passes out of the hands of government and out of the hands of Irish influence. It is the equivalent of a retreating army selling its weapons to dine on fresh meat and caviar. If the slurry really hits the fan, there will be no weapons left, public or private.

The fundamental issue is that the State has effectively taken over by the ECB backed banking nexus. People within that industry are being saved and re-elevated by Europe at the expense of ordinary Irish citizens. Those people are likely to support their own interests. That is what people do. But governments are not supposed to allow that.

Anyway, the fight, such as it was, is largely over. The ECB financial interests have won and they have destroyed the country in the process.

Both the estimated and projected General Government Balances for 2012 and 2013 at 8.2% and 8.9% (p.5) are higher than when austerity started in 2008, 7.5% of GDP.

The deterioration of government finances attributable to increased debt interest costs has always been part of official forecasts.

What has failed is the underlying effect of austerity.

It is now worth the gamble to default on the PN. It is likely that the ECB would blink. If they don’t we leave the euro & end up going to balance immediately by slash wages and transfers.

It can be done ‘diplomatically’ by a simple declaration of intent to ‘postpone’ payments on the PNs until the sustainability of Ireland’s debt position is agreed with our EU ‘partners’ and the IMF.

The interest bill is frightening …

How the hell are we ever going to repay the outstanding debt with the present approach? If nothing else changes we should be achieving a priamary surplus of 3% of GDP in around 5 years time. Even if all the planned cuts are achieved and the growth assumptions happen we will need to continue with say 3% primary surpluses for around 40 years to pay off existing debt depending on interest rates.
I am not an economist but I don’t believe this has ever happened before.
Who’s kidding who – at the end of the day our debts will have to be cleared by inflation or default or massive transfers or gifts from Santa Claus.

We might have to in the unlikely but non trivial poosobility that the FANGS don’t blink, Remember, the Greeks dis real supercharged austerity and got their deal.
We are playing poker and betting on a good turn of the cards. I would rather have a better hand,

@ Joseph

I can’t make u see what ur clearly unwilling to see, and I’ve got better things to do than try again and again. The thing about “legal control over 30bn of assets” is just a bit odd too.

@ michael burke

Employment in Construction
Q3 2008: 235,800
Q3 2012: 101,100

Mortgage Lending
Q1 – Q3 2008: €19,510 million
Q1 – Q3 2012: €1,637 million

There is a lot of underlying effects in that.

I am not impressed with Stephans pleading.

Riche B explained to the man how the system works if he cared to listen.

In the final analysis politicos without printing power are about as useful as tits on a bull.

And two others.



John McManus is surely correct with this assessment;

“But all is not equal. Ireland is trying to extract itself from an EU/IMF bailout, and to do so in a sustainable fashion, most people agree we will need some sort of debt forgiveness or refinancing. Following the Greek deal last week, the wind appears to be once again blowing our way when it comes to getting a concession of some sort.

The Government has learnt its lesson about counting euro chickens before they hatch and no hostages to fortune have been given post the Greek deal, but things look better than they have in a while.”

The wider lesson would appear to be that there is little point in placing much faith in any actions other than those we can undertake ourselves.

Pre-2008 is not coming back in Europe. That penny has yet to drop and there’s lots of handwringing but little attention given to the new challenges.
It will take many years for several countries to get out of the mess. If they don’t take the lead themselves, little will change.

Business investment in the UK has lagged Germany and France in recent years and private sector non-financial companies are now holding deposits worth about £729bn – – a huge 47% of GDP.

So even though net employment in the UK has grown by 750,000 since early 2010 (many cases of part-time jobs replacing full time work) companies have the funds to expand.

@ Tom Paine 

Inishallah as the Arabs say.

It should be possible to spread out the repayments on the promissory notes and as with the people who spun the yarn a few weeks ago on

“Ireland in 2020 [as] the best country in the world for scientific research excellence and impact,” others will have to worry about what may happen.

At the present time, cutting the debts of several countries is unlikely.
On the home front, another week of announcements of jobs schemes and incentives but with little effect.

Stephen Donnelly has more scheme proposals — a billion here, a billion there and so on.

He refers to pensions for ex-bankers. How about his own tax-free ‘leaders allowance’ of €41,000 (introduced for non-party TDs in 1997) on top of the other lavish costs.

Too many camels cannot see their own humps.

Wonder how that new ‘world class’ skills body to replace FÁS is coming along?

New entrepreneurship centres and whatever else. Who would be running these?

FT Wealth magazine that was distributed with the Financial Times newspaper in May 2011, had a 16-page promotional insert from a new group Think Ireland Inc, which was termed a ‘movement of creative and innovative leaders.’

Of the 11 contributors on Irish entrepreneurship, there were 2 from entrepreneurs and 7 from academics.

Failure doesn’t matter in the scheme of things; call a duck a duck and you maybe blacklisted as the insiders set a new target in the spin merrygoround of actionless actions and politicians out of their depth.

You seem to want more conventional growth of “entrepreneurs” and stuff.

My question is what has a entrepreneur of the market state variety ever done for me ?
Donnelly completely missed the boat in his questioning of Richie boy.

Richie boy said quite clearly that they are not a “pawnbroking business”
And its all about the cash flow.
And he is correct.
The assets be it fiscal debt or mortgages are not the wealth from the banks perspective.
The “asset” from the banks perspective is the legal right to farm the fiat.

So whats the problem ?
The problem is there is no flow.
During the nation state era each banking fiefdom could devalue against another banking fiefdom to restart the flow.
Now during the market state era that option is not open to us.

The market state must attack labour for this so called internal devaluation but labour has not been a important part of the flow since fossil fuels came into existence.
When you cut labour wages the countries internal capital base cannot be used.
We have stuff all over the shop – but no tokens to use them.

Machines / capital is what is important as they do most of the physical work.
We must produce tokens to use what we have lying around at the moment before we can talk about “growth”

@ MH
“It will take many years for several countries to get out of the mess. If they don’t take the lead themselves, little will change.”
The Irish Govt’s plan for 2013 and beyond is more of the same. Predictably, that will result in things being much worse (for the majority) in a year from now, and thereafter if nothing still changes.
In the meantime, Ireland’s crs won’t give anything unilaterally. There will always have to be a quid pro quo as they extract their pound of flesh. Such has always been the case. The under-estimation in Ireland of this cultural fact, particularly with N European crs, never ceases to baffle me (if that is a strong enough description to use).

“We cannot balance immediately – get real.”
Yes, but something needs to move faster. As per Dork, there’ll be nobody using the country’s new(ish) infrastructure soon…..But we’ll continue to have a fixed cost public service in place to administer (as opposed to manage) the “ghost estates”.
Any bets on what the 1 yr forward decline rate will be after this budget? I note that revenue is €200m+ short for 2012 due to lack of receipts from the self-employed…..In the meantime public managers such as Tim Lucey in Cork continue to justify high levels of rates that are putting people out of business and work (including a cousin of mine who was just hanging on with his shop until non ability to pay rates closed his doors).


@ Dork/ Paul W

“The die is cast,” Julius Caesar is supposed to have said in Greek, at the Rubicon.

In the short-term at least, we have to play with the cards that have been dealt.

Even in Greece, at the elections this year, all the main parties including Syriza supported the euro.

There is no shortage of armchair generals proposing consequential decisions that they would run a mile from making themselves, if they had to come off the ditch. Anyone with significant spare cash, advocating quitting the euro, likely has it deposited in a German bank!

We’ve had 4 governments since the first revelation in Feb 2007 about huge HSBC Bank subprime losses in the US and one has been as bad as the other.

All the blame of course cannot be heaped on the politicians.

However, what is striking over the past 5 years is that from an Oireachtas of 216 people,
there is no one who comes to mind, who has inspired and challenged the people.

It’s interesting today that the announcement by the Taoiseach of Dropbox’s plan to open an office in Dublin, has like Twitter a year ago no estimate of jobs. They are likely getting money for their multi-lingual teams (ie Eastern Europeans) as a loss leader. Meanwhile, the staged announcements on the Action Plan for Jobs are increasingly looking like a farce.

You fail to see how the European construct is the anti nation state.

The credit inflation phase post single European act and the money deflation post 2008 serves the same agenda.

They wish to hollow out all rational internal commerce to the point of absurdity.

This serves the interests of global corporate power.

On a micro level the Aldis & Lidls of this world has destroyed almost all of the Irish market town steets now.
The only thing that can stop them is real printing by domestic sov governments.
The Central bankers are the great enablers of this pointless cross border trade that destroys all rational internal commerce which even during the Gold standard years they did not seek to do.
For whatever sick reason they want to split open societies and suck the very marrow from their bones.

Great piece in the Irish ( Cork) examiner

Those cheap German supermarkets Aldi and lidl have spread like a pox in this country – closing down the market towns main high streets.

A devaluation would knock their business model for six as they require cheap energy inputs and a static or declining money / wage supply.

Having said that the nation state is merely a higher circle of hell.
A real state would print Greenbacks that would not serve as a asset for either a central or commercial bank.
However that will not happen this side of the coming dark age.

The outsourced economy is a joke – it does not serve demand , its function is extraction.
The western economies are declining because the closed loop of demand and production is broken

Just listen to Pravda if you don’t believe me.

I don’t care if they are Irish.
Nobody could be that retarded (maybe)
Which means these people have another agenda.

Much like that song.
“Whats tax got to do with it got to do with………..its just a secondary Policy Tool”
You take money out of the economy (any money) and you destroy business – which means external actors can move in.
That seems the point of this.

Taxes should only be used in Ireland now in the hope the tax won’t come in.
I.e rational capital controls if you want to preserve the face value of the currency.

“Digital switch over , digital divided …………….”

Sweet Jesus.

Two possibilities arise from these interviews
They either don’t know how real physical economies work….some of whom had previous economic training or more disturbing & more likely they know what they are doing.

The entire European (wage arbitrage) supply chain is extractive lads.

Its as plain to see as Rudolphs red nose.

Rabbit is incorrect as always.
We don’t live in a market economy.
We live in a market state economy.
Its a very different beast.

Stephen Collins –
“Its like climbing a mountain”

George lee –

Its not like climbing a mountain

Revenue is just a policy tool – the money deflation prevents flow in systems
Which means real human & machine capital gets burned / not used to save a metaphysical construct.

“The wider lesson would appear to be that there is little point in placing much faith in any actions other than those we can undertake ourselves.”
But what are we doing to take advantage of the new circumstances? It appears to be zilch…with Noonan saying we are not aligned with Greece. They are a special case.
The Greeks are now winning..news this morning of the reverse Dutch auction for their bonds puts it up to the holders of same.
“Failure doesn’t matter in the scheme of things; call a duck a duck and you maybe blacklisted as the insiders set a new target in the spin merrygoround of actionless actions and politicians out of their depth.”
The announcement of 1000 new jobs at Shannon ..seems to be out of thin air.


Identifying some key aspects of the slump doesn’t alter the fact that the GGB deficit is rising, which is the opposite of what austerity promised.

@Michael Burke

Osborne seems to be running into difficulties with his austerity plan too. It has turned into the never ending story.

@ Flj

I think that both Ireland and Portugal face exceptionally difficult circumstances in terms of negotiating changes to their existing packages. Neither wishes to be viewed as being in the same catastrophic situation as Greece while at the same time hoping to see some additional assistance emerge. It is a regrettable but unavoidable fact that the EU’s efforts in relation to Greece are setting the agenda. As Schaeuble is reported again this evening, this does not include using the ESM to recapitalise banks, at least in the short term. But other elements seem to be in play and the EA cannot act in a varying manner in its response to similar situations. Indeed, in the July meeting, it undertook formally not to do so.

Incidentally, the four articles I linked to make IMHO an interesting contrast and are an indication of the fact that the newspaper of record, apart from changing format, has also upped its game considerably with regard to following EU developments.

I personally do not think that a functioning single currecny requires the creation of a unitary federal state (although, for example, some influential voices in Ireland seem to think that it does). Nor do I believe that the question of additional assistance for Ireland will be linked directly to the issue of corporation tax. The creditor countries must see it as in their interest that Ireland and Portugal remain, at least, in the recovery ward.

The debate in Germany now circles around the issue of income foregone rather than additional cash outlay (represented hitherto only by the capital contributions to the ESM to which impact all EA countries and not just Germany). Derek Scally raises the question of whether Merkel can get away with this posture until after the federal elections. She seems certain to try!


Corp tax could be not far from the point where political elites are no longer able to control popular demands from electorates. Note the current UK press coverage and popular public opinion.

At the recent select committee appearance, the guy from Google actually failed to keep a straight face when trotting out the usual line about corp tax rates being only one of a number of reasons for being based in Ireland.

@ grumpy

True! But that is not the point that I was making. The FTT provides a good example of the difficulties impacting in the entire area of direct taxation. (The treaties do not provide for their harmonisation). It seems to have escaped attention in the debate in Ireland that two of the founding member states, Luxembourg and the Netherlands, are not participating in the “enhanced cooperation” intended to introduce it and Finland has also announced that it will not do so because Sweden does not intend to i.e. a parallel with the situation that exists between Ireland and the UK.

@ Flj

Did you seriously expect someone else to make good the money loaned – admittedly unwisely – by banks to Irish citizens – via funds raised in the wholesale markets – admittedly equally unwisely – which has, in the meantime, transited from the pockets of one set of citizens into those of others, or abroad?

@ Flj

P.S. On the position taken by Germany, this was entirely predictable at this juncture. They have, they feel, enough hungry mouths to feed in Greece. There is, nevertheless, considerable irony in the involvement of France. It suggests a re-attachment to Merkel’s skirts in the manner of Sarkozy.

But facts are obstinate. These include both the Portuguese and Irish debt situations which cannot be massaged out of existence because it does not suit the domestic political agendas of the two major powers now involved.


Careful now. Irish access to the bond markets is conditiional on debt relief. Remove that plank and access may close of PDQ. Then the issue of default opens up again and the crisis accelerates again. If MN has any sense now he will announce that the PN is being restructured unilateraly a la Dev with the land annuities. I suspect he may not, in which case we probably have a GE in the Summer post the PN payment. On current polls this would see a coalition of a motley crew of FF/SF and Ming & Mick.

Then it is a 50-50 shot whether we default, leave the euro and accelerate the fiscal adjustment to D+1 or they blink and we get a deal.

I don’t understand your fiscal adjustment meme ?

Where will the money tokens come from ?

You can only tax commerce …….

Its not daisy the cow again ?

Is it ?

She has crossed the border so many times now….back & forth back and forth.

Will Larry be pleased ?

@ michael burke

Which measure of the GG deficit is rising?

From what I can see they are (as a % of GDP):

Overall Deficit
2008: 7.3
2009: 14.0
2010: 31.2
2011: 13.1
2012*: 8.2

Overall Primary Deficit
2008: 6.2
2009: 12.1
2010: 28.1
2011: 10.1
2012*: 4.3

‘Underlying’ Deficit (ex. bank payments)
2008: 7.3
2009: 11.5
2010: 10.9
2011: 9.4
2012*: 8.2

‘Underlying’ Primary Deficit
2008: 6.2
2009: 9.6
2010: 7.8
2011: 6.3
2012*: 4.3

I wouldn’t categorise any of these series as “rising”. The forecast primary deficit for 2013 is 1.9% of GDP.

How did we get into a situation where we import more oil then food ?

Its the Euro dummies#

I don’t have the 1970s figures at hand but I don’t think it ever got like this in the 1970s
There was always enough butter and McCarthys bread as THERE WAS A INTERNAL SUPPLY SYSTEM.

Going back to the 1930s it was the cows for coal thingy.

Tull thinks its sustainable that the people with deposits can continue to drive down to Glandore in their smashing new diesel BMWs and drinking lashings of French wine.
Meanwhile The City of Cork runs out of Porter………..

Even the famous five drove push bikes and drank only Ginger beer.

“Did you seriously expect someone else to make good the money loaned..”

I never expected our continental brethren to pick up the tab for our banking meltdown and have repeatedly said so. 120% debt to GDP is unsustainable and retards growth. ( Renihardt and Rogoff). Various bond investors bought into the debt relief story of last June. I think Templeton increased their exposure shortly after the “seismic change/ shift” story. Alas, it’s not only Germany now.

@ Tull
They don’t have the liathrodi . Exchange the PNs for perpetual zero coupon bonds unilaterally and present them at the ECB window for dosh. If the ECB don’t like it they can bring IRBC down entirely of their own volition.

I kind of hope the ECB would not blink cos then we would get proper fiscal adjusment and an exit from a failed system.

Tull has not explained how he can square the budget without printing lashings of Punts……….

My breaking point is when I cannot afford a few pints on a Saturday night so that Julian, Dick, Anne and George can continue as before oblivious to a implosion of our cities which don’t consume much oil anyway.

Its the sub rural parts which consume the stuff , not the cities.
Those isolated getaways with their oil central heating and Merc outside.

Two biggest consumers of oil continue to be………..

Private car : 1,843 KTOE

Residential home heating : 1,035 KTOE


Never in the history of economics has labour and welfare been attacked for so long by so few with capital.

Its a crisis of capital /oil lads.

Its not a crisis of Labour.
You tax the money supply.

This is very simple
Industry (what remains) is very lean already standing at 558 KTOE

Road freight – half of what it was a few years ago at 637 KToe

The cars are exporting hard currency.
Why have yee been attacking labour all these years ?


@ Flj

Did you seriously expect someone else to make good the money loaned – admittedly unwisely – by banks to Irish citizens – via funds raised in the wholesale markets – admittedly equally unwisely – which has, in the meantime, transited from the pockets of one set of citizens into those of others, or abroad?

Do you seriously expect Irish citizens to spend thirty years paying off sixty billion Euro to the ECB and cohorts so that large Euro area investors can be protected from the collapse of a bubble they helped to inflate?

Why yes you do. You genuinely believe it is the Irish states role to extract money from its citizens for generations to protect the European financial sector from its current structural flaws. You believe that it is right for the weak to suffer to protect the strong, for the public to pay for the private.

In fact you lobby for this shockingly immoral policy and have done so for several years.

Treason never prospers, for when it does none dare call it treason.

I read somewhere…I think in the British press, that some Bank of England bod opined that our grandchildren will be paying for the foibles of our ruling classes.
As regards treason…it’s not so long ago that we brushed with this crime..and it was swept under the….
However, it’s a bit OTT to suggest same as regards our erstwhile contributor.

Just read Arthur Beesley’s article in the IT and apparently it confirms utter capitulation…
“Mr Noonan said Dublin would not seek “official sector involvement” in the Irish bailout, as mooted for Greece. In such a scheme governments would take losses on bailout loans. “We’d made our position very clear we don’t have default even in our vocabulary,” Mr Noonan said.”

Paddy wants the real story..or words to that effect. Enda Kenny…Taoiseach.

@ Flj

“I never expected our continental brethren to pick up the tab for our banking meltdown and have repeatedly said so. 120% debt to GDP is unsustainable and retards growth.”

If this is the case, we are in agreement except as to whether the contention that the debt ratio that you mention is unsustainable. I do not know whether it is or not. The likely ulyimate approach of Ireland’s creditors will depend on their assessment. In this respect, at least, Ireland has much better prospects than Portugal – despite having a much higher debt burden – because it has better export capacty. But the two countries have now been linked.

As to the behaviour of sovereign states, history has repeatedly shown that the best one can hope for is that they, at least, do not go to war with one another. For the rest, it is nothing personal, just business.

The remark on OSI seems to me also to be judicious as it reflects understanding of the political constraints on Germany which are just as limiting as they are in Ireland or any other democracy (the one factor which tends to limit military adventures, but not invariably).


According to EU Commission, net borrowing of general govt was 7.4% of GDP in 2008 and will be 8.4% of GDP in 2012 (Europa Euro Area Autumn Forecasts 2012, Statistical Annex, Table 36).

As cited earlier in this thread, the white paper (p.5) has both the estimated and projected General Government Balances for 2012 and 2013 at 8.2% and 8.9% of GDP.

On the same page, the deficit on the GGB is €1.7bn higher in 2013 and the Exchequer Balance is €2.2bn higher than in 2012.

@ Flj

More than incidentally, a deal appears to be on the cards with regard to banking union.


It is an interesting political call ministers for finance whether to close it on their own or to give their leaders the glory! Probably a bit of both with the Cypriot presidency left to “finalise” details with the EP before the European Council.

@ michael burke

The period is from 2008 to 2012. It is opaque to pick the endpoints and simply ignore all the data points in between. By all measures the general government balance is (slowly) improving.

If austerity started in 2008 surely the appropriate year for comparison to strip out the “underlying effect” of austerity is 2007. Also, the documents published with Budget 2009 show that compared to 2008, the GGD was forecast to increase in 2009. The deficit has moved in the expected directions, though the magnitudes of change have been off.

The White Paper is not a projection of what is expected to happen and should not be used as such. There are also well-discussed reasons why both the Exchequer and General Government Deficits for 2013 are higher in the White Paper. It is an issue of accounting, not austerity.

Good article…says it all.

Banking union deal looks kind of dodgy today
Seems the ECB need to build a few Chinese walls. With Osborne threatening a veto a deal looks some way off. Schauble doesn’t want the ECB poking around all those funny German regional banks…didn’t they buy a lot of the toxic paper that originated in the US. I see HSBC are to unload 40b of that stuff shortly. Apparently they are dicing it up into digestible chunks..deja …..
Good picture in the Telegraph of MH looking befuddled..he is beside the French guy who helped torpedo our debt relief.


re the fox news story…not a mention of the Brits. Wolfgang seems adamant..
“With time running out to meet a pledge to complete the legal framework for an EU-wide banking union by the end of the year, Germany’s Finance Minister Wolfgang Schaeuble told a meeting of EU finance ministers he said could not support a plan that would give the ECB the final say on supervision.

Jeremy Warner is not convinced..

“Nowhere is the lack of progress more obvious than in attempts to forge a “banking union”, an absolute prerequisite of a properly functioning monetary union. Ministers meet this week in Brussels to try to thrash out a deal, with hopes apparently high of some kind of a breakthrough. The reality is a good deal less reassuring. Meaningful banking union in Europe any time soon? A snowball in Hades would stand a better chance. “

@grumpy on the promotion of Fox News from “Abhorrent broadcaster of lies and idiocy” to “source of worthwhile reporting”

A revolution must truly be afoot!

It is a strange one, but then so is finding insight in Stephen Collins.

The front page of the FT is a real treat today.

“Schäuble puts brake on bank union plan”

I for one am stunned, just stunned, that Germany has reacted to being effectively unopposed in forcing its increasingly reactionary economic policies on the rest of Europe by trying to oppose any less reactionary ones (though who wants the ECB to have more powers?).

“Osborne to extend austerity into 2018 “

The failure of Lord Blithe Misfortune’s plans have also, surprise surprise, convinced him that he needs to pursue the same plans for longer until they do work.

@ grumpy

Not really! Fox feeds twaddle to its domestic audience but seems persuaded that anything that is happening in the financial world that might impact on US interests is worthy of objective treatment.

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