After EU | 261 comments (261 topical, editorial, 0 hidden)

Re: Thanks Frank, for the context. (none / 0)

The bottom line is that if you are a politician in a democracy you have to build or be the beneficiary of a parliamentary majority which supports the broad thrust of your line of policy. There never has been anything remotely close to a majority for Syriza like policies in Ireland - though that may indeed change after the next elections.

So it's just moral grandstanding to criticize Noonan personally for not doing what what he never had a mandate to do nor could have achieved within the political balance of power in Ireland (and the Eurozone) at the time. I personally was all in favour of "burning the bondholders" and refusing to socialize private debts, but I and those few people in positions of influence who shared my view never had anything remotely close to a parliamentary majority supporting our views so claiming that Noonan cares not a jot for the unemployed of the southern periphery is at best moot and at worst a cheap shot from someone who never had the responsibility of managing the Irish economy or elsewhere from within the constraints of our democratic system.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 07:47:17 AM EST
[ Parent ]

"This was the best that could be done... (none / 1)

... with the parliament available" is not a convincing defense of bad policies until you have demonstrated at least a couple of instances where the government fought for something better than what they actually achieved.

If you hit every goal you aim for, you're not aiming as high as you could.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 13th, 2015 at 04:13:23 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

The Government tried and failed to get their "partners" to agree to Irish debts being refinanced at lower interest rates and only stopped when market rates went below any rate concession they were likely to get from their partners. (They did get the IMF to agree to early repayment of high interest loans with capital sourced from capital markets at cheaper rates). They also managed to get the ECB to "look the other way" whilst it effectively used monetary financing to fund swapping the promissory notes for long term bonds but failed to persuade the ECB to allow it to burn some bondholders much earlier in the crisis. So some limited successes, but overall, a failure to overturn the worst effects of the bank bail-out visited on us by their predecessor Government.

I note that Tspiras, too, has abandoned attempts to get his "partners" to write off more debts, and focused on negotiating lower interest rates and longer maturities.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 05:18:19 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

That last bit is not an adequate description of Greece's position.

The Greek position will involve write-offs, so long as the Greek government remains of the view that the Thessaloníki Program is senior to the bonds of previous governments.

Permitting the other side of the table to pretend that this is not so is a costless concession: It is not the Greek government's job to teach the German parliament, or their voters, elementary arithmetic.

Which brings us to the salient point of all your examples: They are all limited to shuffling around impaired assets on various balance sheets. If you want to argue that all this accounting legerdemain actually matters, you need to show how they impacted, in whatever minor way, the actual fiscal stance of the government.

Because the difference between running a 1 % primary surplus to pay all of the interest on half your original foreign debt, versus running a 1 % primary surplus to pay half of the interest due on your full original foreign debt...

... is simply not a matter of very great consequence.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 13th, 2015 at 06:32:00 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

No, they have reduced interest payments due in this and future years quite significantly and helped enable quite a rapid reduction in the forecast debt/GDP ratio from last years all time high of 123.3%

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 07:51:20 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

That still does not explain how any of that ever reaches the real economy. Debt/GDP is not an interesting metric, so having it go this way or that tells you nothing much.

(On a minor point, when is that graph from? Clearly at least one of the columns is a forecast, but there could be several.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 13th, 2015 at 08:08:54 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

http://www.publicpolicy.ie/irelands-current-fiscal-profile/

The reduction in interest payments each year is real

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 08:39:35 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

That graph is actually somewhat out of date (May 2013). The actual out-turn has been somewhat better - see here

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 08:51:41 PM EST
[ Parent ]

Re: "This was the best that could be done... (none / 0)

But of course you also have to factor in the distortion in Ireland's GDP figures - see The idiot/ eejit's guide to distorted Irish national economic data

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 08:56:38 PM EST
[ Parent ]

Re: "This was the best that could be done... (4.00 / 3)

So how many houses are built because of those reduced interest payments? How many kilometer of railway track laid? How many MW of power plants built? How many fibers of internet backbone laid down? How many ships launched?

Unless these reduced interest payments actually manifest in changed government outlays into (or revenues from) the domestic economy, they remain funny-money moving around within the consolidated government balance sheet.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 13th, 2015 at 08:53:01 PM EST
[ Parent ]

Re: "This was the best that could be done... (4.00 / 2)

The last budget (for 2015) was the first "post austerity" to include real increases in government expenditures- the previous trend was:
Graph 1: December Exchequer Returns (€000's)

Full text: Brendan Howlin's Budget 2015 speech

Gross current expenditure for 2015 will be just over €50 billion. This figure represents an increase of €429 million over the 2014 Revised Estimates.
This increase is targeted primarily at critical areas in Social Protection, Health, Education, Justice and Housing.
It is intended also that current expenditure will rise by further amounts in 2016 and 2017. The allocations published today contain some increases to meet service pressures. There will be further improvements announced next October, in line with the Government's priorities. The extent of such increases will be determined by future economic growth and by the level of progress made towards our medium term objectives.
I am also pleased to announce an increase of €210 million in Capital spending for 2015, to over €3.5 billion. There will be further increases in 2016 and 2017.
We are investing in our future and the detailed Capital Review, setting out priorities to 2020, will be published before year end.
This brings the net overall increase in expenditure over last year to €639 million, a position €2 billion better than envisaged in last year's Expenditure Report.

1.e the first small increases from a low base, but c. 2 Billion more than the further consolidation envisaged by the Troika.

AND FROM THE EU ECONOMIC FORECAST:
ie_en.pdf

Public debt is projected to fall to 107.9% of GDP in 2016, down from 123.3% in 2013. This marked improvement largely reflects the liquidation of the Irish Banking Resolution Corporation (IBRC)(45), along with the pick-up in growth

I.E some of the bank bail-out costs are being unwound

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 09:37:35 PM EST
[ Parent ]

After EU | 261 comments (261 topical, 0 editorial, 0 hidden)

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