Archive for the ‘Ireland Economy’ Category
There’s been quite a buzz over the last day or two as Nama makes the headlines. It seems to come at a staggering cost of nearly € 70 billion. It’s money the state doesn’t have and it’s all been borrowed from Europe to bail out property developers, speculators, friends of Fianna fail and lastly the banks.
The State’s lack of meaningful regulation of the Banks is a primary cause of the debacle, that and the refusal to recognize the overheating of the property market as a whole could have catastrophic consequences. They (Irish Government) commissioned a report in 2000 which recommended the cooling of the property market and the taking of measures to discourage investors ( you can read it here ). This report was implemented but then shelved at the behest of Builders etc…
So the stage was set for property bubble to bust. The cost of Nama to the Irish taxpayer is more than the doubling of the national debt which was at €54 billion. It is likely to hit nearly €150 billion by the time Fianna fail leaves office. Incidentally there’s no money there for any stimulus package for the economy (create jobs or anything like that). It’s a shocking use of the state finances to basically bail out the fat cats whilst people get to stay on trolleys in hospitals corridors, kids get to go school in prefabs.
Just noticed this on MSN news, just says that all the pressure on staff to sell all kinds of financial products to customers, has contributed in no small way to the current crisis in the banking sector.
Or How we blew the Boom.
2 Budgets within six months isn’t good and here is Brian Cowen to explain —
There you have it Budget 2009 and it’s nasty. Basically loads of cuts and more taxes.
- The halving of the childcare allowance and it’s scraping by the end of the year.
- Children’s allowance to be means tested from next year on.
- Income Levies doubled 2% @ €15,000, 4% @ €75,000 and 6% @ €175,000.
- Jobseekers allowance to be halved for under 20′s.
- Health levies increased and employee prsi ceiling raised to €75,000
- Mortgage interest relief is to be of seven years duration only.
- No “Christmas Bonus” this year and possible reduction in social welfare rates in future years.
- 25 cent on a packet of cigarettes and 5 cent on a litre of diesel.
There is no solutions on how to put the economy on track and get people working again. It’s a “batten down the hatches” budget and its very anti-people and lacking in idea’s.
Here some of my earlier postings.
The unemployment rate continues to rise, there is now 327,000 people out of work in the country and the figure is expected to rise to 400,000 by the end of the year. What actions are we (the people) expecting the Government to take to alleviate the crisis ? Generally I think the Government are panicking and steering the country into a steep reccession. I would take a gamble (that’s me !) that the outlook will be better in 2010 and borrow what the negative balance is for this year and review the situation at the year’s end. We need to get the revenues growing again and what I suggest is that
- Bring back the scrap-age scheme for cars eight years or more (they are doing this in Germany ).
- Reintroduce the first time buyer’s grant for a limited period say a grant of €10,000- € 15,000 just to get people buying again.
- Tax Shell, no reason not to do this.
- Use the remainder of the pension fund to build motorways, improve public transport, build extra hospitals not subside private ones.
- Encourage people to start their own business/enterprises.
That’s a few of my idea’s, maybe they might not be many ” Irish beggars ” on foreign streets if we tried to help ourselves.
It has finally been announced that Dell is to shed 1,900 of its staff in Limerick, its a move that has been long expected but none the less doesn’t soften the blow for the people concerned. Layoffs are to start in April from what I gather and are to be completed by January 2010. The effect on suppliers and subcontractors of Dell and their likely additional layoffs is not yet quantified. Its a very worrying time for everyone involved. I wouldn’t fancy having to try and sell a house in Limerick at the moment. Now that the “s**t has hit the fan” , what does one do next ? Is it out of bounds to suggest a Workers co-op ? Dell is after all just a badge. Would the IDA/Shannon Development back it ? It is difficult to see anything else coming on the horizon at least for a year or two. Generally the “cost aspect ” of Ireland has to be looked at, in the last five or six years the cost of doing anything in this country is sky high and just about every business feels it. I do believe that it is time to put the price tags back on all goods in the shops too.
Ryanair has renewed its attempt of a hostile takeover of Aer Lingus with its offer of €1.40/share or €748million for the Airline. Aer Lingus with over €1 billion (free gift from Irish public supposely to buy planes) in its bank account is a very juicy acquisition. Don’t think the move is in the interests of the Irish economy but its a good move for Ryanair. When Aer Lingus is eventually taken over and I believe that it is a case of When. How will our rulers explain their actions ? This is another privisation that has gone sour … despite the €1 billion gift from the Irish public (don’t forget all the other bailouts) Aer Lingus did little or nothing for the Irish economy, it yanked the Heathrow slots from Shannon and put loads of jobs at risk and then proceeded to “yellow pack” its workforce (fire existing employees and hire cheaper new one with worse pay & conditions).
Definitely I would like to see how the politicians/ government justify their sale of Aer Lingus now. They won’t of course mark my words.
Just noticed some of the debates on the financial crisis on the t.v, RTE’s Prime time & Ireland Am. All seem to be of the view that we have to ” recapitalize the Irish Banks ” with the money from the pension fund. On Prime time there was a business man basically pleading for the banks to be given the money !!
Many business are complaining of a credit squeeze ( which is not uncommon during a recession) and expect the banks to be a lot more ready to dole out taxpayer’s money. On Ireland Am they had Jill Kirby saying that we couldn’t expect shareholders in banks to take the loss !! Now I remember once having a dabble in stocks & shares with a company called Eircom ok I invested the princely sum of £500 but I ended up really getting burned when Valenina compulsory purchased the shares. I got about £160 back of the £500 put in, there’s a man who will not be dabbling in stocks & shares in any hurry. Are former shareholders in Eircom any different from Bank shareholders ? Who do I send the writ to ? It should be possible to Lend Banks money but they would have to repay it with interest of course. Don’t think Banks should expect to make record profits and everyone else to bail them out when they don’t.
There has been a bad reaction to Brian Lenihan’s “Sheriff of Nottingham” style budget, particularly the reintroduction of the means test for over 70′s medical card and general attack on people’s incomes.
The boom of the last ten years has been largerly squandered and many will wonder where all the money went and why so comparatively little has been done. The dire economic situation hasn’t stopped Mr Lenihan from bailling out the banks with his guarantee, while not knowing the full extent of these’s banks bad debts.
There is quiet a strong possibility that the pension fund could be used to cover the bank’s liabilities especially if the economy declines significantly in 2009. Now that’s a real one to twist the gut, ordinary people’s money used to bail out the “fat cats” and which of course would be never be seen again. Indeed it is the same government’s out and out refusal to use the fund for public works such as railways, roads, new school buildings, hospital extensions etc … all of which which would help alleviate the employment situation and work that desperately needs to be done.