2 years ahead of your time gentlemen.
Rooting through the old threads - crazy
The Gubberment Would not prevent a bubble. They could have ensured proper regulation of banks, Resonable supply of zoned land, and removed incentives that encoraged speculative investment in shelter.
The muppets still belive (or spin ) that we are a small open economy and clearly not part of the eurozone.
Not true. No bubble in Germany, mild bubble in France and Italy, and most definitely no bubble in Belgium.
The case of Belgium is instructive. Never had any property bubbles because the government deliberately makes the cost of the transaction so expensive. No flippers there.
The property crash in Ireland will not bankrupt the country. What will bankrupt the country is the refusal of the government to cut public expenditure by at least 30%. Now. For the last 5 years more than 50% of the increase of government tax receipts came directly from taxation directly related to the property bubble. Goverment expendiure rose by 10%,15%,20% p.a. as if the good time would never end. All that tax revenue is now quickly disappearing leaving a huge hole in the budget, E8 billion so far this year. Two or three years of borrowing to cover the tax hole, and without very deep cuts in government expenditure, and you are looking at a least a doubling of the national debt (in GNP terms).
It hello 1981 time again… FF will only make the correct decision when the economy is on the verge of complete collapse, and when there is absolutely no other alternative. They have done this twice before. They have a history. Based on past form they might start seeing sense by 2012 at the earliest - but I would not bet on it.
Hang on tight. Its going to be a very bumpy and very unpleasant ride.
constructireland.ie/Articles/Opi … rvive.html
We are already bankrupt, just nobody has foreclosed on us yet!
Lucky France
Sarcozy didn’t have time to Americanize their economy.
Not only could the government and I mean FF have prevented the property bubble (or at least severely limited it) but they actually did exactly the opposite. Section 23 combined with planning corruption and a complete absence of proper regulation of the banks was like heaping tyres and petrol on a bonfire.
Anyone on here who doesn’t start to cop that FF over the last 8 years have in effect undid all the growth of the previous 20 and are likely to have set us back to the eighties if we’re lucky and the fifties if we’re not.
FF threw petrol on an already burning fire (and they deserve a good drubbing in the polls for that), their and other political parties abdication of fiscal responsibility during the boom is partly what got us here. But remember this is republic running a democratic voting system, in such a system we vote for the gombeen in a Santa Claus suit. Try telling Joe Public that you are deliberately going to stop him speculating on property and see if you get re-elected.
Agreed, but the problem is not just FF (FG seem to have had a recent Pauline conversion, now that it suits them).
It is the bankruptcy of ideas and leadership within the Irish political system and western ‘democracies’ that fuels this, a politician with true courage and integrity, leadership and vision would have been able to persuade people that following the Bacon report was the best course of action.
Sadly we only get genuine leadership when our backs are against the wall and we’ve tried every other foolish solution beforehand.
And hopefully the ECB will prosecute the directors for wreckless trading.
No need to. The French government has engaged in creative accounting for the last 20 years that would put Enron to shame.
All that unfunded pension liability. Ignore it because it would double the national debt load. That 5 billion euro p.a deficit in the health services. Put it in special off balance sheet section of the national budget. The Eu rules that the railways need to be self-supporting. No problem. Put the profitable bits in once company and put the cost of building the system, more than 17 billion euro, in a separate company that is financed by low interest government backed bonds…etc etc.
The French have nothing to learn from the Americans. Except maybe customer service, transparency, and general good neighborliness.
Interesting post , I can accept the German level of debt as being reasonably accurate, but the French one had me stumped. Your explanation if valid (its certainly believable) would explain it nicely.
LTR - individually, the French are not indebted. Nationally they are with a debt:GDP ration of 64% at the end of 2007.
Eurostat PDF
The German ratio: 65%, Italy leads the pack with 104%
It seems you can either indebt your citizens or your state. Having tries the state approach, we’ve now tried the citizens approach. Which tastes better?
Well in France, for their public debt they actually get public services that work, they’ve thrown alot of time and money at it though, there’s no stomach for that here but maybe, if we get through to the other side of this, maybe we’ll start seeing a more left leaning approach to the development of public services…
Soon after Sarko won the election the new Finance Minister made public what everyone had suspected for a long time, they were fiddling their books. If France used the same criteria that other EMU countries used for calculating their national debt it would around 120% plus of GNP, about double the official numbers.
The senior people in the Ministry are seriously worried about the numbers and the direction they are going, which is why they went public.
Yes it would be good if it were wreck-less, and I’m sure the ECB are full of hope that this will happen. 
db (a tad grumpy this morning)
The irish public sector has had plenty of money thrown at it over the last decade - most of the increase has gone in wages and extra admin staff, and little if any improvement in services. Since that money isn’t going to be there for the next decade, i’d say cutbacks are the most likely outcome.
Not true, house prices have gone through the roof in belgium in the last 4-6 years.
But they have an “anti flipping policy” which mainly works outside the cities, you buy from the council (a plot) and can only sell back to them if you do not build. plot price = 20K. Not bad…
Nice work Colm, joined today and you are responding to a post from 6 weeks ago. Are you reading the whole site from the start?
That’s correct about Belgium’s property bubble. They also had one from 1986-1992, fueled by a lot of crazy Swedish investors, and prices fell about 30% by 1994, which coincided with the Swedish property crash.
what was the swedish equivalent of RoboPaddy called?
CannymcSaaby.
Excellent