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 Post subject: Re: The National Debt
PostPosted: Tue Oct 02, 2018 6:47 pm 
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Well if limited borrowing was spent on real infrastructure projects there may be few complaints. It's the perpetual borrowing for current expenditure throughout the cycle that has caused the bankruptcies of the past.

Re: the €15bn motorway network. I always thought Europe 'gave' us that. The value we have got from that few quid spent compared to the splurge post 2008 that brought us from 50bn to 200bn. Oops wrong thread. :wink:


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 Post subject: Re: The National Debt
PostPosted: Tue Oct 02, 2018 7:20 pm 
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Epicurus wrote:
W
Re: the €15bn motorway network. I always thought Europe 'gave' us that. The value we have got from that few quid spent compared to the splurge post 2008 that brought us from 50bn to 200bn. Oops wrong thread. :wink:

No. We built most of it from 2006 to 2010 and we only got _some_ EU money for around 1/4 of the overall motorway network...all skewed to the older cheaper sections near Dublin. 20% of it is PPP sections but we had to buy the land there first.

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 Post subject: Re: The National Debt
PostPosted: Tue Oct 02, 2018 10:45 pm 
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Have public-private partnerships gone out of fashion?
https://www.rte.ie/eile/brainstorm/2018 ... f-fashion/

Quote:
the borrowing required to finance a PPP project is not counted as government debt and it’s counted off-balance sheet.


Dodgy business it would seem.

+ the indirect taxation via tolls.


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 Post subject: Re: The National Debt
PostPosted: Tue Oct 02, 2018 10:55 pm 
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snaps wrote:
Have public-private partnerships gone out of fashion?
https://www.rte.ie/eile/brainstorm/2018 ... f-fashion/

I hope our national debt is adjusted to take into account the ppp's?


PPPs are a mixture of semi recourse and non recourse and revenue shares.

1. The toll in Kilcock makes more than contracted profit and the state gets a share of revenue same in Dundalk I think.
2. The toll in Limerick on the tunnel makes less and we cover losses annually.
3. The toll in Ballinasloe makes losses and we are not on the hook for them BUT the NRA gave ex gratia payments in the past and the traffic has bounced up in recent years so they may now be running a small profit.
4. I don't think we pony up for shortfalls in the other Munster PPPs.

Very hard to calculate what to capitalise onto the national debt out of that lot, really. Such a mixed bag of liabilities. :)

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 Post subject: Re: The National Debt
PostPosted: Wed Oct 03, 2018 8:19 am 
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2pack any idea if the Waterford motorway is still a vastly over specced white elephant? My mate drove north on a Tuesday evening a while back and was expecting to meet tumbleweed it was so quiet... Thanks Martin Cullen


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 Post subject: Re: The National Debt
PostPosted: Wed Oct 03, 2018 1:22 pm 
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slasher wrote:
2pack any idea if the Waterford motorway is still a vastly over specced white elephant?

Yes, it carries much less traffic than any other toll section in the country and that is a problem for some Spanish Bank, not the Irish Taxpayer.

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 Post subject: Re: The National Debt
PostPosted: Wed Oct 03, 2018 1:45 pm 
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2Pack wrote:
slasher wrote:
2pack any idea if the Waterford motorway is still a vastly over specced white elephant?

Yes, it carries much less traffic than any other toll section in the country and that is a problem for some Spanish Bank, not the Irish Taxpayer.

Well, that bridge isn't on the motorway but is the N25 1km beyond the motorway end, forming part of the ring road, (so misses a good bit of Waterford City traffic) The motorway itself was surely State funded? My engineer mate was always adamant that a dual carriageway was more appropriate.


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 Post subject: Re: The National Debt
PostPosted: Wed Oct 03, 2018 2:03 pm 
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slasher wrote:
My engineer mate was always adamant that a dual carriageway was more appropriate.


Not a national debt issue. You mate is saying a lesser standard road could have sufficed and would have saved the Spanish bank some wedge. I agree with the engineering analysis. There is a longer and pertinent analysis here, albeit one with the benefit of hindsight attached.

I do not want any more road PPPs if that is what you want to hear. :)

Nor do I think there should be many more motorway grade schemes, bar bits near Cork Limerick and Galway cities, Cork-Limerick and Mullingar-Longford and the Dublin Outer Orbital in 10 years time. Dual Carriageway standard will be enough elsewhere but most of what we need will be decent single carriageway.

I'd say another c.250km tops and we have 1000km, or so, of motorway today. This will cost the exchequer €2.5bn or so to finish and near half of it would be in County Cork alone.

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 Post subject: Re: The National Debt
PostPosted: Wed Oct 03, 2018 5:05 pm 
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2Pack wrote:
slasher wrote:
My engineer mate was always adamant that a dual carriageway was more appropriate.


Not a national debt issue. You mate is saying a lesser standard road could have sufficed and would have saved the Spanish bank some wedge. I agree with the engineering analysis. There is a longer and pertinent analysis here, albeit one with the benefit of hindsight attached.
.


The Spanish built the bypass not the overspecced motorway
From your link

Quote:
The lemon of the CRG trio is the N25 Waterford Bypass motorway, which officially opened in October 2009. CRG is responsible for the Suir River Crossing cable stayed bridge, which is 465 metres long, 23km of dual carriageway, and almost 10km of single carriageway
.

Once you get on the motorway there's no toll all the way to Dublin


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 Post subject: Re: The National Debt
PostPosted: Wed Oct 03, 2018 7:06 pm 
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We only came up with a dual carriageway standard in 2007 *LINK, the contractors were onsite building the M9 by then.

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 Post subject: Re: The National Debt
PostPosted: Thu Oct 04, 2018 9:19 pm 
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2Pack wrote:
snaps wrote:
@2Pack
How do you suppose we deal with the quantity?

Sloooowly I fear.

We only have 2 possible large windfalls.

€10bn if we sell AIB
€10bn if we 'have to' keep the Apple Money.

and

€5bn from NAMA windup.

Otherwise any reductions will be incremental and weighed against needed capital spending and IRRs on that.

AGAINST all of that we pay much less for our new debt than we paid when we were highly solvent and our next task is to maintain the present relative link with Bunds right through Brexit. Next year will be squiffy bottom time and we do not want to pay a risk premium thanks to the utter insanity of the Tories and the DUP.


But does nt everything fall apart very quickly if the ECB stop buying sovereign debt and interest rates return to the historical 5% to 7%?

Given that Draghi only turned on the spigots for purely political reasons in 2012 and the Germans only went along with it because they got to keep for the interim their deeply discounted export currency once the Germans no longer think their are getting anything from the status quo they will stop the money merry-go-round in short order. One thing about their self congratulatory "plain-speaking" and "bluntness" is that the Germans in their domestic media have been quiet upfront and unapologetic in stating that the only reasons for not pulling the plug in 2012 was a discounted currency enabled them to run up and keep their huge export surplus. No other.

Whenever the subject of the lazy feckless cheating Greeks, Spanish etc freeloading of the hardworking Germans comes up in the German media, regular as clockwork, the righteous indignation soon abates when someone invariably mentions, soto voice, that the alternative is to back to the DM, an immediate currency appreciation, and the end of the German "export miracle". So they mutter into their beer and then are distracted by the latest Deutsche Bank or german car industry scandal.

But someday the ECB money printing will end. CB money printing always does. And soon after a few countries sovereign debt will hit a brick wall. The upside for Ireland is that there at least five other countries in the Eurozone that have a far more catastrophic sovereign debt situation. So by the time the crisis becomes acute in Ireland the shape of the bail out will already have been worked out. But its most likely going to be more South America 1980's than Eurozone post 2012. Very painful.

So best to build as much economically useful stuff as possible before the party ends.


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 Post subject: Re: The National Debt
PostPosted: Fri Oct 05, 2018 12:49 am 
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The IMF reckons (not that I have much faith in their prognostications) that we are in danger of another financial crash. Apart from the fact that the world increased its debt by 60% in the last 10 years, it hasn't invested in productive parts of the economy.

Instead we've blown asset bubbles and concentrated wealth in fewer hands. We also need to worry about the strength of the US economy (those of us not in the US, that is). Yields on longer dated US treasuries are rising. If the Fed raises interest rates four times in the next year as projected they'll be above 3%, compared to a project 0.2% for the Eurozone at the end of 2019. Who the hell's gonna want to buy European bonds then?

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 Post subject: Re: The National Debt
PostPosted: Fri Oct 05, 2018 1:36 am 
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ECB Money printing has largely ended, I explained that last week.

As for buying US treasuries instead in € if you are in Europe. The spread is around 3% now, US Treasuries will pay more than German bonds every year, but the €=$ rate is highly unpredictable.

The big buyers of US treasuries were Asian exporting countries not Europe. They could end up with currencies depreciating relatively at 3% a year even if they did buy treasuries and likely they will not.

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 Post subject: Re: The National Debt
PostPosted: Fri Oct 05, 2018 3:40 am 
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Ok gotcha. So is it the case that USD appreciates against EUR to prevent capital flight? But then there must be capital flows not involving euro to begin with. Oil springs to mind. A stronger dollar means oil price inflation for Europe, does it not? Enough inflation, even of the external variety, eventually means interest rate hikes for Europe. I realise the European economy is less oil intensive than the US.

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 Post subject: Re: The National Debt
PostPosted: Fri Oct 05, 2018 8:02 am 
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But we can't have both high interest rates and a crash at the same time. One might trigger the other, but if the US economy tanks the interest rates will come back down.

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