FT - UK weighs billions in loans to Ireland

vivatifosi

There's a good article today in the Indie on the human cost.

http://www.independent.co.uk/news/world/europe/ghost-estates-and-broken-lives-the-human-cost-of-the-irish-crash-2136104.html

Extract:
Even for the few who have yet to feel the pinch from the crisis, its effects on families will be felt next week, when the Budget that was brought forward yesterday yanks a further ¤15bn out of the economy through major spending cuts and tax rises.

Many have taken drastic action already. With youth unemployment topping 30 per cent, some have already fled abroad to seek their fortune, or at least stay above the breadline.

The Economic and Social Research Institute think-tank estimates that the labour market will not pick up within the next two years, pushing as many as 100,000 people to seek work abroad. In a country of just 4.5 million, that would cause a dent in potential consumer spending, as well as a level of emigration-fuelled social upheaval reminiscent of the 1980s and after the Second World War. In Dublin, ministers were maintaining a tough-talking stance, refusing to go cap-in-hand to the EU even as discussions were continuing in Brussels. There was a not-so-subtle resentment in the capital that a growing number of European players were insisting a bailout was the best option. Yesterday, Jean-Claude Juncker, the Luxembourg politician leading the group of euro-area finance ministers, said help was there if it was wanted.

System

Bailing out Ireland is not the same thing as compensating depositors who lose money. It's like the wife collecting the pay packet to pay the rent, not letting the husband keep it to spend in the pub.

de1amo

As i see it no matter how much money they pour into the banks it will never be enough! As mortgage and commercial loan holders realise the hopelessness of their situation and default there will be another tidal wave of debt to deal with.-its a pig in a poke!
The İrish dont want the money of the eurozone because of the strings it comes with--notably a hike in corporation taxes which will frighten the corporations away -maybe the UK will become once again the favoured places for the likes of Dell etc --thats if there is a Eurozone left that isnt in the grips of meltdown!

purch

I dunno just how deep this hole in the Worlds credit is, but I have a feeling that it won't matter how much cash we shovel into it, we will never fill it :eek:

Can't afford to fail, can't afford to bail......it's lose lose.

tomterm8

Generali wrote: »

There is some talk of a UK only partial bailout for Ireland.

IIRC, Ireland is the 3rd biggest export market for the UK after somewhere (Germany?) and Holland.

I know this is stating the obvious, but if/when Ireland goes Bazoomi, we will be in the middle of the European debt crises. What is to say that at the moment, as a small european power with a deficit of 11% of GDP, we will even be able to fund our own borrowing needs, let alone raise a UK partial bailout for Ireland?

One of the reasons the IMF is so successful at handling these things is that it has in effect a direct credit line to every major central bank in the world.

To be honest, I can't believe that plans are not being drawn up right now in the UK for when credit markets are closed to our banks again.

Generali

tomterm8 wrote: »

I know this is stating the obvious, but if/when Ireland goes Bazoomi, we will be in the middle of the European debt crises. What is to say that at the moment, as a small european power with a deficit of 11% of GDP, we will even be able to fund our own borrowing needs, let alone raise a UK partial bailout for Ireland?

Well indeed. TBH my belief is that Ireland should go to the IMF for the standard bailout and that if needed Britain should give humanitarian aid: food, medicine etc. Ireland has plenty going for it once they become solvent once again.

tomterm8 wrote: »

To be honest, I can't believe that plans are not being drawn up right now in the UK for when credit markets are closed to our banks again.

It would be pretty shocking not to have done so. I'd hope there's also proper contingency in case sovereign debt markets close too.







Actually, on reflection, surely things haven't gotten so bad in Ireland that they need to eat British cooking. Perhaps better to appeal to the French for that.

dopester

Generali wrote: »

There is some talk of a UK only partial bailout for Ireland.

IIRC, Ireland is the 3rd biggest export market for the UK after somewhere (Germany?) and Holland.

Yes. Republic of Ireland with its 4.5 million people. Cameron also reflected that also shows we're not doing well enough, in exporting to other countries.. including Russia and China and India.

Generali

dopester wrote: »

Yes. Republic of Ireland with its 4.5 million people. Cameron also reflected that also shows we're not doing well enough, in exporting to other countries.. including Russia and China and India.

He's right. Why does the UK export to Holland and Ireland? Because they speak English.

ILW

The whole world speaks English.

de1amo

i see İreland as an actual parasite feeding off the uk because of it language! We were once the country of choice of the Americans to gain access to the EU markets--the İrish used its tax policies to entice these corporations away from us and still use English as the common language. These policies were obviously flawed by the current state of its finances and now we are expected to help a competitor--They may be one of our current 'major' trading partners but given the state of their economy i cant see it lasting past this year---they will export people and corporations to us i believe!