IMF report on Irish economy

IMF report on Ireland’s economy makes grim reading.

According to the International Monetary Fund, Irish banks will lose €35 billion over the next two years and this burden will fall on the taxpayer one way or another. The economy, which has already shrunk, will contract by a further 13.5% before 2011. Unemployment will be 15.5% per cent next year.

Brian Lenihan welcomed these observations, calling them realistic and balanced, but was careful to avoid acknowledging that his government had caused the problem. This is in spite of the fact that other industrial economies will contract by 4% this year and return to growth in 2010., clearly showing that Ireland’s problems are not primarily due to the global downturn. Lenihan failed to acknowledge that the problems were caused by his current leader, Brian Cowen, and his predecessors in the finance ministry, Charlie McCreevy and Bertie Ahern.

As the IMF report says, Ireland has been hit particularly hard by the global economic and financial crisis, reflecting significant vulnerabilities built up during the boom years, amplified by the openness of the economy to global shocks. Critical macroeconomic imbalances emerged as credit supply accommodated an unsustainable rise in property prices; banks’ exposure to property lending soared while their reliance on wholesale funding intensified; and, as wages climbed rapidly, international competitiveness declined.

Isn’t it extraordinary that a government should take credit for trying to retrieve a disastrous situation caused by itself?

I notice that Lenihan wasn’t so quick to agree with the IMF’s advice that the banks should be temporarily nationalised in order to eliminate the problems that will come when NAMA tries to value their toxic assets. He wasn’t jumping at their suggestion of risk-sharing structures either, to reduce some of the dangers inherent in NAMA’s valuation of distressed assets.

Why? Because nationalisation would upset the wealthy elite that owns the Fianna Fáil party, and because Lenihan already has a risk-sharing structure in place. It’s called the Irish taxpayer.


IMF Report

Previously on Bock:

National Asset management Agency Takes on Bad Debts of Banks

Asset Management Agency — Ireland’s Bad Bank

The Language of Bullshit

Paying For The Celtic Tiger

Property Speculators and Treason

Irish Government’s Budget Deficit

4 thoughts on “IMF report on Irish economy

  1. Bock it seems that the penny has not dropped for a lot of people The party is over There is no more money .Ireland inc. is trading while insolvent.. We and our descendents shall pay for hundreds of years for a very small elite that actually enjoyed the Celtic Tiger .

  2. I know Cromwell is still a reviled figure here centuries after his unwelcome appearance on these shores.

    Will the taxpayers of 2019 view Bertie Ahern’s legacy in a similar light when they open their depleted pay-packets?

    That fucking rat has bankrupted us for no other reason than to play his power trip, looked after his buddies from the public purse and he still takes his weekly pay and generous pension with not an ounce of shame.

    Jesus H. Christ, and not wishing to imitate their society, but at least the Chinese have been known to deal effectively and swiftly with such blatant corruption.

  3. We are truly in the ” Shit” we are taxed up to our eye balls, country in hock, thanks to the banks, property devlopers and Finna Fucking Fail. My children will still be paying for this shit bag of economics in fifty years. What about the multimillionaires in this country?Horse trainers, Rock Stars/musicians, Judges, Barristers, Consultants et al? why aren’t they making a better contrubution to the tax system? Answer – Finna Fucking Fail ! ” Poor Old Ireland’s Dead And Gone, It’s With O’Leary InThe Grave”…………. W.B. Yates Sept 1913. Little did he know or did he? What a shower of Baaastards!!!!

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