Yesterday, the EC published the results of the in-depth reviews under the Macroeconomic Imbalance Procedure. The conclusion for Ireland is that there are “imbalances that require specific monitoring and decisive policy action”.
The MIP has been around for a couple of years but it is still far from clear that it has delivered anything. One thing we do get are documents which compile and illustrate a very broad range of data on the Member States. Yesterday these included the in-depth review of Ireland which has 65 graphs to peruse, but with little to be learned.
6 replies on “Macroeconomic Imbalance Procedure”
This paper was published Feb. 2013, Ireland gets 21 mentions. May interest some people.
The Missing Wealth of Nations
Paris School of Economics
“there are “imbalances that require specific monitoring and decisive policy action”.”
Of particular national concern are –
Permanent Government’s lack of familiarity with specific monitoring
Virtually no track record of evidence-based decisive policy action
The box on tracker mortgages is worth a read.
Box 3.1 Page 22
“These loans accounted for a total of about EUR 69 billion (around 56% and 32% of gross mortgages and total loans, respectively) in the three domestic banks at end-June 2013. ”
Assuming a 2% differential between SVR and tracker, that means an annual ‘subsidy’ of 69bn @2% about 1.5 billion pa.
That is a hell of a subsidy, the most part of which goes to people who are very well off indeed, as only about 16% of trackers are in arrears.
It is time to end the tracker subsidy, regardless of what the particular pacta say. Or else levy all loans to pay the subsidy/ loss on them.
@ Joseph Ryan
Have you also a problem with people being over remunerated in the Public Service and semi states? Have you a problem with the mortgage products that were sold? The pacta being used to continue the subsidies in the former being Croke Park and Haddington Road agreements? Negotiated at the expense of all and sundry who are outside these insider arrangements.
Dr. Edward Walsh has said time and time again, we could save 7.3bn annually if we paid ourselves the same as what we would earn for similar, like for like work, carried out in the UK. Irish Universities fail to get into the top 100?
Have a look at the FLAC report there are two good articles in the IT today. It is a damning indictment on government regulatory failures and cover up’s and clearly shows that the central bank supports banks at the expense of bank customers. The rubber is starting to hit the road, just wait until enough people realise their “products” were totally unregulated despite legally binding declarations to the contrary.
“Have you also a problem with people being over remunerated in the Public Service and semi states? ..”
Yes, I do. In fact I believe that there should be significant % reductions on all salaries above 50K, with a max salary of ~120K.
Equally all pensions paid from State coffers should be capped at 50K to any one person, from all State sources. Equally Croke Park was special deal for insiders, with a two fingers to outsiders.
Further the taxing (levy) of defined contribution pensions to pay the defined benefit guaranteed pensions of both public sector and some private sector schemes was nothing short of theft plain and simple.
And of course the bank debt was the most egregious of all.
But none of those take from the continuing reality that tracker mortgages are being subsidised by the general taxpayer, in the case of both AIB and PTSB and partially in BOI.
The total subsidy is approx 1.5 billion pa.
That is a large welfare cheque to many people whose income is a large multiple of the criteria for welfare assistence.
does it add information, that a german union guy thinks pretty much like Joseph Ryan ?