The Final Countdown - Speculation on Irish bailout EU/IMF

[Pill]

Britain’s Foreign Secretary William Hague has said he hopes the euro survives, but it is impossible to know whether the currency would collapse.

rte.ie/news/2010/1120/economy.html

[onestepbehind]

calculatedriskblog.com/2010/ … nt=Twitter

… IMF Managing Director Dominique Strauss-Kahn said Europe is moving “too slowly” to resolve the sovereign debt crisis that began in Greece.

"The next one in line is going to be Portugal.’ [Roubini said] "Due to the severity of Portuguese debt problems, Portugal is going to lose market access—and that means they are going to require IMF support as well.

But the real nightmare domino is Spain. Roubini refers to the Spanish debt problems as “the elephant in the room”.

“You can try to ring fence Spain. And you can essentially try to provide financing officially to Ireland, Portugal, and Greece for three years. Leave them out of the market. Maybe restructure their debt down the line.”

“But if Spain falls off the cliff, there is not enough official money in this envelope of European resources to bail out Spain. Spain is too big to fail on one side—and also too big to be bailed out.”

[BertieInExile]

The questions that are worrying us are to a large extent irrelevant.

Portugal will shortly find itself in our position. That much is sure.

The key though is Spain. The bond markets may or may not force it to seek a bail out.
Rationally speaking it should not need one. The markets have been anything but rational.
If Spain goes the pressure transfers to Germany and to the electorate that decided to use us as a penal battalion in its fight with the markets.
Then and only then will Europe get the quantative easing that is the only sensible way out of these difficulties.

If Spain does not go under then the only possible consequence of Germany’s current stance is a two tier euro.

No one proposing the currently fashionable default/burning option knows what consequences it would have for us.
It is better therefore to cooperate, argue our case but do nothing to annoy the powers that be and hope that Spain ushers in Gotterdamerung.

Our futures depend on a number.
bloomberg.com/apps/quote?ticker=GSPG10YR:IND

[BertieInExile]

In a couple of months we’ll wonder how we ever got so worked up about the terms of this deal.

As I said to Ajai in the Merrion on Friday night there’s nothing to worry about. Spain will save us.

ftalphaville.ft.com/blog/2010/11/25/416171/new-years-resolutions-for-spain/

Which could make rolling €59bn of bonds in six months next year a tricky prospect,…
sales of €18bn in April, €23bn in July and a further €18bn in October. Put the dates in your diary. (If this week’s less than smooth bond sale is anything to go by, the small January sale might not be plain sailing either.)

And then there’s the elefante in the room, the known unknown that is Spanish bank assets:
… a number of uncertainties remain regarding the condition of the local Cajas, especially in light of their exposure to mortgage loans in an environment of a deflating housing market. Quantifying their financial position accurately is a very hard task.

PS.
examiner.ie/home/pension-reserve-funds-to-be-spent-on-banks-137796.html

The emphasis in the plan is to avoid drawing down money from the bailout and rely in the first place on money from the Pension Reserve Fund for the banks, and on the €20bn the state borrowed earlier this year to part-fund next year’s national budget.

Economist at the Economic and Social Research Institute, John FitzGerald, said he believed it would be a good idea to use the money in the pensions fund to recapitalise the banks, and keep the EU/IMF funds in reserve in case they needed further money later.

“Using the €20bn in cash we have first would be good for the country in the short run. It would leave the opening debt for 2012 €20bn lower and interest payments would be €1bn less. It would also leave the national debt lower than forecast at the end of next year,” he said.

[Egg_Beater]

The IMF coming here will end very badly, have a look at this 2 minute cartoon, the similarity to Ireland is quite scary. Were Berts, Brian and Conor our economic hitmen? I hope they enjoy the layer of privilege they think they secured for themselves.

https://www.youtube.com/watch?v=n7Fzm1hEiDQ

[FAUGH45568]

The IMF playbook hasn’t really changed … The path is in general the same…

Will we be ticking the box in 9 months time in relation to FG… A change in leadership but heh still stuck with the debt obligations… Promises promises promises, where have I heard that before…

Time will tell…Let’s be Positive for now…

[boomshackala]

And as expected, the sell off in our forests, planes, gas pipelines, and other stuff we thought were ours is imminent, not for jobs of course, to pay off a tiny portion of our debt, which no one can figure out who is the man we owe it to, hoping in any case he’d forget about it, whoever he is. Well he hasn’t fprgotten:
thejournal.ie/government-urg … 1-Jan2012/
Since FG promised this wouldn’t happen, that means this is the part where we rise up and kick them out, right?

[AWAAF]

h/t economy.ie (in turn h/t’ing NWL)

#vinb makes ecb rep masuch look like a guilty schoolboy @18mins+

rte.ie/news/av/2012/0119/media-3172722.html#

[Schrodinger]

h/t economy.ie (in turn h/t’ing NWL)

#vinb makes ecb rep masuch look like a guilty schoolboy @18mins+

rte.ie/news/av/2012/0119/media-3172722.html#

Goddamnit!
Golden opportunity for the next person to say “before I ask my question could you answer Vinnies question first?”

If any press pass folk reading this, organise the next time…

[AWAAF]

h/t economy.ie (in turn h/t’ing NWL)

#vinb makes ecb rep masuch look like a guilty schoolboy @18mins+

rte.ie/news/av/2012/0119/media-3172722.html#

Goddamnit!
Golden opportunity for the next person to say “before I ask my question could you answer Vinnies question first?”

If any press pass folk reading this, organise the next time…

yeah flashmob the wonkers!

[AWAAF]

h/t economy.ie (in turn h/t’ing NWL)

#vinb makes ecb rep masuch look like a guilty schoolboy @18mins+

rte.ie/news/av/2012/0119/media-3172722.html#

Vincent lands a solid punch [again]. Watch the body language and facial expressions of all panel members in camera view as Vincent seeks answers on behalf of Irish citizens. Vincent hit a nerve.

Yes szekely looks like the schoolboy who should have been accused also by the headmaster but is sniggering while his mate takes the hit.

[TheJackal]

Michael Noonan wants to ‘engage seriously’ with Troika on bailout exit strategy

rte.ie/news/2013/0709/461349-imf-eurozone/

[dame]

So he’s only been messin up til now.

[AWAAF]

So he’s only been messin up til now.

Turnin’ up locked for the craic apparently.

[TheJackal]

Any thoughts on whether leaving the bailout programme, and not opting for a 2nd one, is a good thing or not?

I believe Ierland is pre funded for nearly all of 2014 needs at this stage.

If we do leave the bailout, we should be able to get semi ok rates but the market is very volatile

[Eschatologist]

Any thoughts on whether leaving the bailout programme, and not opting for a 2nd one, is a good thing or not?

The govt will probably line up a fresh bailout-in-principle billed as a “precautionary credit line” in advance of the next SPIG meltdown.

[slasher]

europa.eu/rapid/press-release_MEMO-13-703_en.htm

Statement by EC, ECB and IMF on the Eleventh Review Mission to Ireland
Staff teams from the European Commission (EC), European Central Bank (ECB), and the International Monetary Fund (IMF) visited Dublin during July 9-18, 2013 for the eleventh review of the government’s economic programme. Ireland’s programme remains on track and yields on sovereign bonds are well below their levels in recent years. Discussions with the authorities focused on how best to address the remaining challenges, especially the fiscal deficit, unemployment, and banks’ nonperforming loans.

Recent national accounts data show weaker economic activity than previously estimated. At the same time, high frequency indicators have been more positive and the labour market shows signs of improvement. While unemployment remains high, it has now dropped to a three year low. Overall, modest positive growth is expected this year as the external environment improves and the domestic economy stabilises.

A number of developments, including European decisions to extend loan maturities, have further reduced market financing needs in coming years. This, together with confidence in the Irish authorities’ commitment to programme reforms, has supported improved funding conditions for both the Irish sovereign and the banks. Yet, such gains are fragile and need to be safeguarded by steadfast programme execution.

Budget implementation is on track in the first half of the year. The new local property tax contributes to broadening Ireland’s tax base. Broad acceptance of the agreement on public sector pay is welcome as it will facilitate needed pay bill savings while protecting core public services. Nonetheless, it will be important to maintain careful and proactive budget management to contain spending within allocations for the remainder of the year and to ensure the annual fiscal targets are again met. Further progress towards sustainable public finances is necessary to sustain improved funding conditions. Budget 2014 should bring the high debt and deficit down in line with Ireland’s commitments and continue Ireland’s track record of steady fiscal consolidation efforts. The mission urged the authorities to develop further structural reforms to enable continued consolidation to be achieved in a durable and growth-friendly manner, while protecting the most vulnerable.

To revive lending and support economic recovery financial sector repairs must progress. The immediate priority is to address banks’ high levels of impaired loans. Recent legislative and regulatory steps have strengthened the framework for resolving mortgages in arrears. Banks are now expected to accelerate durable solutions for borrowers in unsustainable positions, while restoring debt service payments in other arrears cases. Working out SMEs in arrears is also important given the critical role this sector can play in job creation. The mission welcomed the recent enactment of legislation that strengthens the supervisory powers of the central bank, while urging to bring the centralized credit register into operation as soon as possible. Good progress was made on specifying the supervisory diagnostic steps that should be undertaken to assess the quality of banks’ balance sheets.

Reducing unemployment remains a key challenge. The Pathways to Work initiative moves in the right direction, but significantly more resources are needed to ensure meaningful engagement with job-seekers, especially the long-term unemployed. Thus, the mission urged timely redeployment of staff with suitable skills and training, supported by private sector provision of employment services. It remains essential to further enhance competition in sheltered sectors of the economy.

The key objectives of Ireland’s EU-IMF supported programme are to address financial sector weaknesses and put Ireland’s economy on the path of sustainable growth, sound public finances and job creation, while protecting the poor and most vulnerable. The programme includes loans from the European Union and EU member states amounting to €45 billion and a €22.5 billion Extended Fund Facility with the IMF. Conclusion of this review, which is subject to the approval process of both the EU and the IMF, would make available disbursements of €2.3 billion by the EFSF, €0.8 billion by the IMF, and €0.3 billion by bilateral creditors. This would bring authorised disbursements to 97.9% of the total international assistance envisaged under the programme. The next review mission is scheduled for October 2013.

[Mantissa]

I have said this a few times - I predict:

• A victorious “exit” complete with government photocalls and lots of smug handshakes
• A giveaway budget
• Bond yields go batshit when someone realises the deficit we’re running
• Bailout 2

[coc]

That looks like four corners successfully turned there mantissa.

[khards]

I have said this a few times - I predict:

• A victorious “exit” complete with government photocalls and lots of smug handshakes
• A giveaway budget
• Bond yields go batshit when someone realises the deficit we’re running
• Bailout 2

+1

The second bailout will happen when the banks need recapitalizing and the bond markets turn again.

Whether Ireland likes it or not, our bond prices are relative to PIIGS, just because the global economy is going through a quiet spell it doesn’t mean that it’s all over. In fact we could just be in the eye of the storm.

$shit is bound to kick off again by the end of the year, this to be mostly driven by the US & UK banks who take huge short positions on Europe. They will be paying themselves a hefty Christmas bonus for fecking up everyones economy.