Hard times they are in Iceland. Now that the Irish economy is banjacksed - a victim of the Government sponsored pyramid property bubble could this be in store for us here in Ireland? Perhaps in a few years time we in Ireland will be more concerned about getting food rather than a “Christmas present”.
a little bit of gold, a little bit of silver every month
I’ve seen a lot of predictions about Ireland going bankrupt next year. If this does come to pass and an IMF bailout is required, what will this mean in real terms? Are we following Iceland into a scenario outlined by the OP? Or will being in the euro shield us? And if so to what extent?
Should I be stockng up on tinned beans? (I prefer the curried variety so suspect I’ll find them well stocked no matter what!)
I think an IMF bailout is very likely. It will probably look like this:
The main difference for Ireland will be in the extent of public sector wage cuts. Public sector salaries are ludicrously high even by European standards, and since no Irish politician will ever tackle this, it will inevitably fall to the IMF to wield the knife. Salary cuts of at least 30% will be necessary.
I posted on politics.ie a couple of days ago on a similiar thread that if we went knocking on the door of the IMF I reckoned a 33% across the board paycut for publlic service wages and pensions would be on the cards. We are singing from the same hymn sheet.
And taxes will have to sky rocket leading to this:
What you are then looking at is a massive deflationary downward spiral in Ireland lasting possibly for years where people with big debts will be in deep shit.
Not really. Deflationary pressures will be counteracted by ultra low interest rates which will have to be maintained for years. As in Japan. So I’m expecting five years of stagnation and low inflation. People with really big debts will be able to use the examinership process to get their debts written down by the banks, with the taxpayer ultimately paying the bill. It is ordinary Joe’s in the private sector with big mortgages who will be hardest hit.
By next autumn, when the second Lisbon referendum is due, the gravity of the situation will be a lot more obvious even to those who currently think they are safe. Depending how stable this place still is by then, a positive Lisbon vote by a terrified public will probably set the scene for help from other EU members and therefore less reliance on the IMF. That, I think, is the hope on which the powers that be are hanging their hats right now.
On the one hand you don’t see massive deflation but yet you are comparing the situation to Japan who have witnessed deflation for what is it now, 18 years
So you are saying we are going to fare better than the second wealthiest economy in the world ?
I don’t recall Japan looking for an IMF bailout and a combination of massive wage cuts coupled with major tax hikes will lead to deflation all the way despite “ultra low” interest rates which will still be hughly “positive”.
Also with the tax payer “ultimately paying the bill” this will lead to yet more tax hikes creating a feed back loop and yet more deflation.
Bingo. And street protests. And waves of personal bankruptcies
As an example of how overpaid public sector workers are, have a look at hospital Consultants.
Identical qualifications to those in the North
Working fewer hours
But on three times the salary
90 thousand in Newry
270 thousand in Dundalk
Can some-one please explain this poster child for all that’s wrong with this country to me?
Basically the sooner the IMF arrive the better for the long term in this country. We need to take our medicine.
Hardly fucking representative is it?!?
Your very touchy these days TUG. It would’nt have anything to do with the public sector wage cuts coming in the New Year would it?
And I thought that what with you being a Socialist (along with Bertie) you would have no qualms about making a little sacrafice to ‘bailout’ your fellow man, such as Mr. FitzPatrick.
All this talk of public sector paycuts. Tell me, what is the legal mechanisim for same. If X is employed at a salary scale of Y then a contract to pay Y would seem to exist and be legally enforcable in the courts.
Public sector pay cuts will just be one result of an IMF bailout. Policy will also be set for us against all democratic wishes. Expect Biotech to touted as the saviour of our economy, with widespread GM trials.
Thanks for your comment.
It’s entirely representative of what’s wrong with the country.
An elite bunch of stuck up ‘professionals’, fleecing the state.
How can they command such an extreme premium?
The Government should call their bluff.
They earn three times what is already an extremely high salary.
Again, what is the LEGAL mechanisim for a public sector paycut. Not a moralistic justiciation
PS - part of the reason consultants earn more here is that there are so few of them. There is for example one maxillofacial cancer consultant , there are three in NI… scarcity=premia.
There are hundreds if not thousands of qualified Irish graduate doctors trained to Consultant level abroad.
This cabal prevents the spineless Government from bringing them all back home.
People die while the Government avoids confrontation.
Just bring in a Statute.
Courts have to follow Statutes.
Statutes have to follow Constitution - so unless the Public Sector can argue that there is a breach of some right under the Constitution, they can’t stop it.