In any case, I don’t see this one as being empty. A country losing faith in its ‘bailout’ process results in an Argentina. That kind of failure is not tolerable (even to those on the outside). It has taken the IMF a long time to recover from their failures in Argentina, indeed some will argue that it hasn’t so far recovered.
I doubt Varadkar is really breaking ranks on this, it seems like he’s the designated loudmouth who basically states the obvious, which may be against the official DoF line, but has the effect of getting the bad news out in the open before the officials own up to what’s really happening. Then the cuts/tax increases are apparently less painful.
Garret Fitz was driving FG up the wall with many criticisms of FG banking policy, which was effectvely rebuffed when Varadkar compared Cowen to him, which basically outlined that ‘Garret is not FG, and we’re not listening to him’. The older guys could not have made that statement, but Leo could.
It’s the same ole nonsensical spin. “We’ve loads of cash balances” - eh, right, and what do you do after you’ve spent them? Sit outside the pub waiting for an abandoned pint? While the funding situation remains turgid, cash balances have to be maintained. Spending down your emergency money while you don’t have market access to rollover debt is like using your savings to pay your mortgage, but forgetting about food.
Perhaps Mr. Noonan has a plan for a balanced budget which means that we won’t need those cash balances, but it looks unlikely. It also looks unlikely that we will get market access or that the banks will be ‘fixed’ enough to buy new debt by end 2013. And January 2014 is a key date: economic-incentives.blogspot.com … et-it.html
Again, these are all best case figures. There are three underlying assumptions: