Tempted as I am to be optimistic, at every point my worst fears have come true so I'm feel I have to judge things by those. One problem is the fact that the governments and certain interests seem to be determined to keep us uncompetitive by artificially propping up the property and rental markets. Going on about the few pence involved in the minimum wage, when businesses are closing down due to insane rents, is missing the wood for the trees. The same with wages; the country would be far more competitive if house prices dropped but it looks like after the initial fall, we're now in for a Japanese-style prolonged agony of a long slow fall. It's funny how we hear a lot about the need for tough medicine, slashing pensions, etc, but property seems exempt from this tough medicine.
I expect:
- a tough budget in Dec. Some back benchers may defect, but it will pass (FG will abstain if necessary).
- Bond auction in Jan-March time frame. It will "succeed" but only because the ECB buy it all as they don't want us to enter the structural fund.
- Govt to fall some time in the first half of next year.
Over a longer term:
- although a GE will return a strong FG/Lab govt, they will be forced to have tough budgets. As a result in 4-5 years time, FF will possibly be looking at a return to power.
- Bond holders won't get burned, but there will be some 'restructuring' of bond debt.
- No banker, developer or senior govt official will see the inside of a jail cell.
I believe the EU hates our low corporation tax rate.
Ireland is effectively 'poaching' foreign company profits with it.
I don't see why the EU would want to protect this. In fact, I would suggest one of the conditions of the bailout would be to increase the corp tax rate, and let other countries have a slice of the action.
Here is what I think. I believe the comments made on Bloomberg about Ireland running out of money in 2 months is overly pessimistic, and that the governments' estimate of June next year is overly optimistic.
my question is how are our banks being funded ? Since they are locked out of the bond markets too.
The main thing we need is an election this will stabilize the markets.
and a state run business investment bank to sell off a few years down the line.
I know several companies who are export led that are doing very well and need to expand but no money from the banks to do it.
What i think will happen is as i said in a different post, balied out by Feb or March. Which will result in massive cuts in PS & SW. Corp tax rises to 15%. Other EU countries will be bailed out, and as other countries do, the EU will start printing money devaluing the euro. With a devalued euro and costs gone way down it wont matter about or corp tax and we'll see some major FDI in the country and it all begins again.
The IMF have their own sacred cows. They will eliminate public services. They will privatise everything that moves. You can expect to be paying directly for everything - health services, education, roads, water etc etc. They will eliminate local industry and encourage imports of everything. Have a look at their track record in South America.My gut would be that we will be cohabiting with our IMF / EU masters pretty soon and to be up front I would be one of those who would welcome the IMF in. This country is broken, not only financially but in terms of ethics / leadership and morailty. Politicians / trade unions / the clergy / bankers / developers etc etc have brought this country to a stage of paralysis where only the likes of the IMF can come in waving a big cheque and say "if you want the money then there are no sacred cows" and do what has to be done.
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