Budget 2014


The Sunday Times (21st July) is reporting “a series of heated arguments” between Minsters Noonan and Howlin and their counterparts in the Trioka regarding the next budget.


The question is; are these actions just for show or do they reveal possible tensions within the Government coalition on how (and potentially whether to continue with) the budgetary correction programme?

Blue Horseshoe


I’ve no inside track on this, but I’d guess “yes, for show”.

Handy the way the credit for standing up to the Troika is split between the two parties, and is not associated with the leaders but rather with senior lieutenants.

Who for showing to may be unclear. Public: probably. Troika: maybe. Clearly FG/Lab don’t want to administer the Troika medecine, and they’ve wasted so much time p!ssing around the margins of the problem that time runs out for them to do something significant and not get absolutely hammered in next election allowing successors to reap the rewards.


Which is why there should have been an emergency budget 90 days into the government. then you’ve almost the full 5 years to allow Irish people’s goldfish like memories to kick in


Nah. Nothing to be gained from grandstanding in the middle of July. I reckon the Irish Government are running out of rope now that the Bailout growth miracle never happened and the Troika are insisting that we hold the line.



Had they done this and lifted the lid on the guarantee/banking scandals ala the anglo tapes while the harshest cuts were made and cut their own pay significantly they could of lumped the blame squarely on those responsible and made it through themselves.


What happened to that ‘First 90 days’?


It’s hard to imagine what leverage the Irish ministers think they have in these “negotiations”. I can only imagine that the conversation went something like this:

Noonan “Give us more money.”
Howlin: “Also we’re going to have a giveaway budget!”
IMF: “No.”
Noonan: “We’re going to storm out of de room!”
IMF: “OK” (orders more biscuits and reads the paper)


What date is the Budget?


Noonan said in April that it would be “on or before the 15th October”.


Exchequer Returns: Tax revenues of €23bn on target end August, up on last year - -> independent.ie/business/iris … 48561.html


I don’t see how this is sustainable.

Debt clock says Ireland has 170billion national debt.

Irish bond yield is supposedly around 4% at the moment and higher rates are being paid on some of the debt out there.
tradingeconomics.com/ireland … bond-yield

170 billion debt at 4% to service is 6.8 billion of tax take gone straight away every year.

170 billion can’t be cleared and is actually increasing as the government is running a deficit every year.

Is the Irish government hoping to play a confidence trick on international investors and get the bond yield down to a managable 2% or what?

Is Ireland too far gone? The debt seems to be unmanagable.


I’ve never understood that point of view. Does the Troika’s behaviour over the last couple of years sound like there’s any mood for forgiving Irish debt? The IMF might be a tad more sympathetic but they’ve been overruled. When it comes to the crunch and we can’t pay we may have to default, but you can be sure the place will be asset stripped and run into the ground first.

I don’t think it’ll be as simple as sticking up a few “Brehon Law spear of inspiration” posters at Dublin Airport for the visiting econocrats.


It is absolutely unpayable. Most sovereigns can’t (and never will) repay their debt, they’ll roll it forever. Unless it’s in a fixed exchange rate system… like the Euro! So we either leave the Euro or the ECB grows a brain and tells Germany to get out because we are going to fund deficits with our infinite balance sheet. If that doesn’t happen then Ireland is certain to default. How people still can’t grasp this reality, while looking all the while at Japan’s enormous debt ratios - but 0% rates and 3% unemployment - I don’t know.

So, essentially, we are either: Detroit (and screwed); or Japan (and fine).


So I guess you are all putting your money where your mouth is and shorting Irish bonds as default is a sure thing?


TASC budget submission.
independent.ie/irish-news/ca … 53304.html

Seems to be a “do what you must but leave public sector alone” type stall they’ve laid out there.


There are smarter trades than that. The negative carry is a pain while you wait for the collapse to happen.

The mispricing by the market (caused by its misunderstanding of a fixed exchange rate system’s default risk) is to be found in the yield curve… There are 30/1 + payout possibilities if you know where to look!


This bit from TASC stuck out for me, it looks like they thought better of a proposal and edited it prior to release.

A very long winded sentence if all contributions get 20% relief.
If they were considering different rates of relief on some pensions then the sentence would make sense.


So that’s a no then. What a surprise…

You might not want to tie money up but would the likes of Goldman’s sachs not be throwing money at shorting Irish bonds if this was a cert we were going to default? Or do pinsters on this tread know much more about the risk of default than the analysts at Goldmans?


Well, I do.

And it was a yes.


How do you know Goldman aren’t short Irish bonds?