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Discussion Point XXXIII

The IMF auditors have arrived in Dublin. What should Ireland do now?

32 comments to Discussion Point XXXIII

  • Alsadius

    Kiss the Blarney Stone and hope.

  • Lie back and think of England?

  • David Crawford

    Get drunk.

    Oh, they’re Irish. Get drunker.

  • Dale Amon

    No, get the auditors drunk in the local. That’s the way we do business :-)

  • Kevin B

    Have the meeting in Kerry.

  • Uh, guys, I was sort of hoping for learned economic commentary on bailouts, defaults, haircuts (whatever that means, and don’t say cutting your follicles) and the Euro and stuff.

    Ah well, as the old Irish saying goes, “I wouldn’t start from here.”

  • Still, Ian B. wins the…whatever one is allowed to win these days…:-)

  • pete

    Well, it is a big country with a small population.

    It can just grow food and live a happy life.

  • Jacob

    Why not declare bankruptcy? That would be the thing most near the truth, most honest, easiest. All Government bonds are null, and will not be repaid. Poor pensioners will get some assistance, but the rest of the creditors (inside or outside Ireland) will have to write off the debt.
    Do a reset and a fresh start.
    The EU should feel free to use the rescue money to rescue their own banks that took a hit from the Irish default.
    Is this commentary what you wanted ?
    Sooner or later, all countries, including the US and Britain will have to do the same.

  • RAB

    You have a wicked sense of humour Pete ;-)

    Either that, or the words Potato and Famine mean nothing to you.

    Ireland what are you thinking of?

    You bitched about Brit Rule for centuries and when you finally get independence, you hand it over to the first bunch of foreigners who ask nicely… Well alright there yer go den, just as long as it’s not to the English!Sheesh.

    The EU dont see the Sovereign Dept crisis as a moment of failure for the Euro, they see it as a consolidation.

    They can, and will, spin fantasy into inescapable reality if we dont keep a close eye on them, and thwart them at every turn.

  • Brian, follower of Deornoth

    Hold them for ransom?

  • newrouter

    let the tsa inspect their junk

  • RRS

    Perhaps now Eire will again be the very pleasant place it was about 40 years ago when I first went there to set up channels around the exchange controls of the U K, following up with the establishment of skilled financial businesses.

    It was once a place where people enjoyed less more.

    So, what did they spend all the “credits” ( borrowed money) on? In order to have more that they now enjoy less?

    Welcome the auditors – the “truth,” if they find it, can do no harm. It is only when people decide they know what to do with or about the truth that harm results.

  • Still, Ian B. wins the…whatever one is allowed to win these days…:-)

    *hopes it’s a nice bottle of Irish whiskey*

  • So, what did they spend all the “credits” ( borrowed money) on? In order to have more that they now enjoy less?

    Presumably the wise ones converted them to specie and smuggled it out in hay carts.

  • So is the IMF bailing out the Republic of Ireland?

    Or is it bailing out the EU, with Ireland as the mortgaged asset?

    Best regards

  • PeterT

    Well, if I was Irish I would get the next boat, to a less fkd country. Which I guess for an Irish person would be the UK or US – not much of a choice nowadays. Its just going to be another Iceland, where the little guy gets screwed over royally by the powers that be. Collective guilt you say; screw you I say.

    More constructively, they could auction off the empty houses plaguing the country side to rich arabs and afghan drug lords, thowing in a permanent residency visa for free. That way they would benefit from rising house prices (which as we know is such a good thing), better driving (well, its Ireland so who knows how that will turn out), and cheap drugs that will help them forget the naughties.

    Its that or bankruptcy (well, the sovereign govt equivalent of defaulting on your bonds). I have my doubts about the bankruptcy option, since it will just enable the country to continue with welfare statism. Here in the UK we are at least using the dire fiscal situation to rationalise some “cuts”. And hey, if they run out of money again they can always raid the private sector pension funds or the central bank reserves like they did in Argentina.

  • lukas

    Ireland can never go bankrupt. That would mean to admit that it would have been much easier to just let Anglo-Irish go under, and no one, not the IMF and certainly not the EU, is going to question the wisdom of bailouts.

  • I wonder if the soon-to-be former US Senator from Connecticut, Chris Dodd whose buddies helped him buy a lovely farm house in Ireland and who helped Barney Frank wreck the US financial system, was giving the Dublin government free advice on how to run their system.

    Just Asking ?

  • Laird

    “Free” advice? From Dodd? Unlikely.

  • Simon Jester

    RAB, the potato famine (which was caused by the disease-triggered failure of a staple crop) happened over 160 years ago, when the population of Ireland was nearly twice as high as it is now. The population density of the island is roughly half that of Denmark, and a tiny fraction of the UK; another potato famine today is about as probable as CAGW.

  • I have a modest proposal…

  • Kiss the Blarney Stone and hope.

    List the Blarney Stone on eBay.

  • 'Nuke' Gray

    NickM- Shame on you! You don’t know where those Irish have been, and you want to eat them? Who knows what diseases you’d pick up?

  • Paul Marks

    I will be accused of repeating myself – and I plead guilty.

    Many people (including myself) repeatedly warned that lending must be from real savings (not credit bubble games) and that if one expected returns from lending then the lending must be mostly for productive activities.

    The Irish practices violate both these principles.

    The lending was not from real savings (Irish real savings were vastly less than the amount the banks lent) and the lending was not mostly investment for future production – it was for consumption.

    Newsflash for people who do not know…. buying houses is as much consumption (not investment) as buying cars. It can be a very nice and useful thing to do (people need a place to live – just as they need a way of transporting themselves), but it is still consumption.

    The vast tide of credit money (thanks to the European Central Bank) that flowed into Ireland was bound to end in tears.

    “But what is to be done” – again I am going to repeat myself (how many hundreds of times have I and others wrote this over the bitter years?).

    THE BANKRUPT BANKS MUST BE ALLOWED TO GO BANKRUPT.

    The backing of deposites by the Irish government (which led to a inflow of “hot money” in 2008) was WRONG, the endless bailouts were and WRONG also.

    Wrong in moral terms – and wrong in economic terms.

    “But Paul – there will be a terrible slump if the bankrupt banks are allowed to go bankrupt”.

    When have I denied that?

    Of course there will be such a slump – but the endless bailouts do not prevent a slump, they just drag it out and (by twisting the capital structure) make it worse in the end.

    No more “loans” for the Irish government (either by governments or by the funny money creation of the European Central Bank).

    Anglo Irish bank must CLOSE ITS DOORS.

    Till the Irish government faces up to that reality no real recovery in the long term – ditto all the other governments.

    “But Paul we have already spent vast sums over the last two to three years”.

    Yes and you have WASTED what you spent – the money is gone, you should never have spent it.

    Throwing “good money after bad” is simply the policy of demented establishment (which includes the British government) – it is plain daft.

    Final point – please remember that the Irish government has NOT cut government spending over the last two to three years.

    On the contrary when you include the money spent on bankbailouts it has vastly INCREASED government spending.

  • The best option would be for them to get out of the Euro re-demoninating all their government debt in whatever currency they choose to use and then let it depreciate. However that isn’t going to happen as that would puncture the EU-philes favourite myth that ever closer europe is some kind of inevitable, unstoppable, historical process.

    What is more likely to happen.
    1. The auditors come in and demand that Ireland keeps on cutting the size of government spending, they can do nothing else to get rid of their debts, in exchange for EU loans. The EU will now scrutinise the Irish budgets for as long as Ireland is reliant on EU money.
    2. The state cuts, but with debt-deflation now firmly in place thanks to the Euro things just keep getting worse domestically.
    3. This causes the next wave of defaults sending Ireland even further up shit creek.
    4. As the second crisis flares up the Irish government is forced to go to the EU for even more money, trading in even more of their power over Ireland to get it.
    5. The money is provided, but with harsh penalty clauses because the German electorate, who are paying for all of this, don’t want their money wasted.
    5. Of course with the EU now in charge the chances of the money not being wasted are roughly zero. Those with EU connections get wealthy and everybody else gets screwed.
    6. The Shin Fien expands in the south into a small but real political power. However since it is anti-EU everything is done to keep it, and its supporters, marginalised. The fact that it is made up of former terrorists is not the problem, the fact that they are anti-EU is.
    7. As the Irish depression continues people start to blame various ‘out groups’ with, nasty populist measures being proposed to deal with them which strangely never seem to create any problems with the ECHR despite being exactly the kind of thing it was supposed to stop. Obviously, this scape goating has no positive effect what so ever. (see France and Italy)
    8. Along with this there is a dramatic rise in the far left. This is another aspect of the previous point, since all the far left do is scape goat sucessful people. (see Spain)
    9. There is significant civil disobedence against the authorities, getting violent as the far left gets involved. (see Greece)

    Here we get to the tipping point either things can get slowly better and Ireland return to a new equilibrium as a poor vassal of Brussels or:

    10. The far left switch from civil disobedience turns to outright terrorism.
    11. The EU sends in its gendarmrie. For political reasons the UK sits this one out, the idea of British troops marching through the streets of Dublin has too many historical resonances.
    12. That they were not British does not matter and areas of Southern Ireland become like Northern Ireland.
    13. The long Second Irish Independence Struggle begins.

  • Paul Marks

    Please note the absurd ravings of British government ministers – how giving loans to the Irish government is in the “British national interest” (so much for controlling government spending – or do Cameron and co not understand that intergoverment loans are government spending?).

    And the media just go along with the madness.

    It is “inevitable”, “unavoidable” and so on.

    It is was Perry calls the “metacontext” – everthing is seen via a general view of the world.

    And in the case of Britain (and many other countries) that view of the world is statism.

    So whenever a specific policy question comes up (for example the Irish bailout) the question is replied to from the point of view of general statist ideology.

  • Nuke,
    Well, I’m physiologically incapable of contracting Phytophthora infestans so I should be OK.

    Interesting Chris. Very interesting. Especially the mention of the EU Gendarmes. Yes, folks the EU does have a currently 800-strong para-military wing. It really does. They are answerable to the EU which means the Council and President Rumpouy (or whatever he’s called). Also, Chris, I think you’re on the money as to the role of Sinn Fein and the fact that the British government will do nothing to the purpose and indeed cannot realistically do anything.

  • Rob

    NickM,

    I read today that Europol officers have diplomatic immunity.

    Quite the most frigtening thing I have ever heard in relation to the EU.

  • The_Chef

    Definistrate them.

    Hey it worked for ze Germans in the 1600s. Well …. kinda.

  • Chef,
    I think you refer to the defenestrations of Prague. The first didn’t due to the presence of a sizeable heap of horse shit under the window. The defenestrated made good his (admittedly smelly) escape. The second time around the defenestrators of Prague had stationed a squad of pikemen at the bottom to make sure.

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