Ireland may not be able to raise borrowings to fund €20billion deficit

[kerrynorth]

Ireland may need to raise upwards of €20billion next year to fund services and capital expenditure. However, in the last number of weeks the margin on Irish debt over German bonds has stretched 1.3%. This is just ahead of Greece but behind Italy. The markets are now marking Ireland as a high risk debtor. This is not because of our public debt per se but undoubtably due to the potential liabilities facing Ireland under the bank guarantee.

In the last 2 weeks it has emerged ultra safe Germany struggled to raise just €7billion of 2 year bonds. In that scenario what is the likelihood of Ireland raising upwards of €20billion? The answer to that question is that it is not possible. The government does have a lot of cash on their balance sheet going into 09 but as things stand we will be knocking on the door of the IMF in 2010 and the 2010 budget will have to contain massive cutbacks in public sector pay, transfer payments (social welfare) and services.

If you think 09 is going to be bad 2010 is shaping up for a depression in Ireland.

[Digout]

This is no supprise, expect the county to be bankrupt later this year. When the banks go tits up and we have to bail them out, there will be no money to pay cops, teachers, nurses etc.

While the builders and the bankers sit in the sun having a good laugh at everybody.

[Halo]

This is no supprise, expect the county to be bankrupt later this year. When the banks go tits up and we have to bail them out, there will be no money to pay cops, teachers, nurses etc.

While the builders and the bankers sit in the sun having a good laugh at everybody.

fianna fail getting things done..

[Factorem]

"the bank guarantee didn't cost the Irish taxpayer one cent" -- Brendan Smith, Minister for Agriculture, Morning Ireland, October 22nd 2008

[pfkf]

Ireland may need to raise upwards of €20billion next year to fund services and capital expenditure. However, in the last number of weeks the margin on Irish debt over German bonds has stretched 1.3%. This is just ahead of Greece but behind Italy. The markets are now marking Ireland as a high risk debtor. This is not because of our public debt per se but undoubtably due to the potential liabilities facing Ireland under the bank guarantee.

In the last 2 weeks it has emerged ultra safe Germany struggled to raise just €7billion of 2 year bonds. In that scenario what is the likelihood of Ireland raising upwards of €20billion? The answer to that question is that it is not possible. The government does have a lot of cash on their balance sheet going into 09 but as things stand we will be knocking on the door of the IMF in 2010 and the 2010 budget will have to contain massive cutbacks in public sector pay, transfer payments (social welfare) and services.

If you think 09 is going to be bad 2010 is shaping up for a depression in Ireland.

Indeed things look very bleak, we are running up our national debt very fast, more than likely we will more than double it over the next 2 years. We will have to as a nation get real, we all know who is to blame for this mess and it is important that they get punished electorally.

I do agree with you that public sector wage bill has to be reduced, this should not be done by taking the easy option of sacking, nurses, closing hospital beds, closing of Garda stations etc. We need to do an independent audit of every department and each sector of the public service, we need to identify areas of inefficiency and remove it, whether that means 10,000-15,000 job loses in the public sector so be it.

We also need to look at the services being provided and see how we can streamline any service or identfy services that are currently not needed and could be removed in the current climate.

I, as well as you KN have been shouting that unemployment will skyrocket for at least the last 18 months at this stage, unemployment by the end of this year when the figures come out next week, will be well in excess of 8%, and by the end of 2009, it read somewhere around the 12% and by the end of 2010 it will read in excess of 15%. The point being that we can't afford to cut down on social welfare, in fact that will be the one of the major burdens on the national budget over the next 2-5 years.

Do I see any of the this reform taking place under the current adminstration, no, you will see some reform done out of pure neccessity but nothing more than that, expect Nurses to be sacked, teachers to go, Garda services to be cut way back, Transport 21 to go, School building programme to be scrapped, no new infrastructural projects to be started or completed, the rollout of broadband to be stopped ad so on.

We are headed for an absolute disaster in terms of our economy over the next few years, and if you ask me the question will it be worse than the 80's, yes it will be for two reasons, the shock value that it will hit us with and secondly the fact that everyone in the country who has bought a house in the last 10 years has huge personal debt and will find themselves in negative equity before the year is out. Personal debt follows you whether you emigrate or not.

[Halo]

but why all the cuts, surley we can just reduce the entire public sector wages by 25% and bring it into line as one of the highest paid public sectors in europe, amazingly as it sounds!!!

[seabhcan]

but why all the cuts, surley we can just reduce the entire public sector wages by 25% and bring it into line as one of the highest paid public sectors in europe, amazingly as it sounds!!!

How about we fire every manager in the public service and then offer to rehire anyone willing to work for 25% less. Not many other options out there for these people.

[wysiwyg]

but why all the cuts, surley we can just reduce the entire public sector wages by 25% and bring it into line as one of the highest paid public sectors in europe, amazingly as it sounds!!!

Would love to see the current administration try it.. the riots would be mad

Unfortunately.. KN is most likely right again in his predictions.. I'e been saying privately for the past year that public sectors employment cuts in the region of 50-80,000 will be necessary to bring the public sector wage bill under control

[Digout]

Unemployment will be 14% @ this time next year. Public servants must take a 30%.

[libertarian-right]

very bleak news indeed, of course FF will throw out new documents proclaiming they will address all the issues but will wait for the IMF to come in and bring with them drastic changes so FF gladly let the IMF take the blame for all the cuts that will be made.