IMF Report on Ireland

[He3]

http://www.imf.org/external/pubs/ft/...09/cr09195.pdf

The last four paras give a better sense of their view, coming after the polite nods are out of the way.

A flavour:


The emergence of a large structural fiscal deficit—following the reassessment of the underlying balance—the rising public debt, and the fiscal burden from financial support to banks will require a sustained adjustment effort over several years. Directors stressed that the composition of consolidation efforts would be important in laying the foundation for a return to robust growth.

They generally concurred that the focus should be on expenditure reduction, possibly including a further reduction of the public sector wage bill. A few Directors, while recognizing that fiscal consolidation is an imperative, cautioned that consolidation should not undermine efforts to arrest the economic downturn.

Directors considered that, over time, the sustainability of the planned fiscal consolidation would benefit from an effective institutional framework, including an appropriate fiscal rule and a medium-term expenditure plan that details the intended measures over the full planning horizon. They also underscored the importance of better targeting benefits for the vulnerable, broadening the tax base without hampering the restoration of external competitiveness, and further pension reform.

A few Directors expressed concern about the use of resources of the National Pension Reserve Fund for bank recapitalizing purposes.

Directors stressed that economic growth will hinge on continued restoration of Ireland’s international competitiveness and a reorientation of the economy toward high-productivity activities. They noted that, with no scope for nominal exchange rate adjustment, Ireland’s relatively flexible product and labor markets will be an invaluable asset. They welcomed in this regard the authorities’ commitment to the restoration of wage cost competitiveness—acknowledging the progress already underway—and their plans on infrastructure and R&D investment. A few Directors cautioned, however, that falling nominal wages could impair domestic demand and accelerate deflation.

[constitutionus]

I have the key conclusion of the IMF.

IMF: 'The government has been the greatest disaster on the economy possible'.

Government Press Release.

Spin Dr: The IMF says that 'the government has been......great......on the economy'.

ah that wiley dick roche

this is up on the reuters site. at least there was a report on it in the NIB ebanking site news section and thats where they usually get their info from (at four seconds past seven, hows THAT for reportage ).

main gist of that is they expect the irish banks to lose 35 BILLION by the end of this year and they want NAMA's powers to be widend to include debts beyond property and residential.

im dying to see what this does to the stockmarket tomorrow. if the pasts been anything to go by the feckers could go up though, things are that mad.

but im betting on it hitting it and have put bids up on a few shares (not banks incidently) to chance my arm seeing what happens.

should be fun

[kerrynorth]

Has anyone read the detail of this. IT IS EXPLOSIVE. Especially as it is implied throughout the document that the government agree to all of it.

Highlights: Adjustment has to come through spending cuts, not increased taxation. Cut public spending by 9.5% of GDP, or circa €19billion. End universal access to social welfare including childrens allowance and unemployment payments. An end to the Family Income Supplement - use tax allowances instead. Age relate unemployment - so like with the UK a lower rate of unemployment payment to under 25's.

Public sector pay has to fall further and numbers cut as well. They were not impressed with the average 7.5% pension levy - it has to be a lot deeper.

On taxation there is nothing specific other than the broaden the base without hitting Income Taxes.

Bank bailout to cost at least €35billion - but possibly a lot more as this only refers to property/construction related loans.

The Social partners are just going to love this.........NOT!

[Mar Tweedy]

Its very depressing reading as it is only a description of what is going on in Ireland Inc, with no depth in terms of the human collateral damage.
Also I note they criticise the use of pension reserve funds to recapitalise the banks and suggest govt should not rule out further investment in equity in the banks. I feel very sorry for Michael Somers who has been working steadfastedly over the last number of years securing our future financial stability only to have thrown away in the banks.

Just to see if the IMF predicted what has happened I had a quick scan of old reports. There's a few interesting trends since 2003 on but one constant is their recommending of a market-value based property tax. They've recommended it for years.

[Mar Tweedy]

Has anyone read the detail of this. IT IS EXPLOSIVE. Especially as it is implied throughout the document that the government agree to all of it.

Highlights: Adjustment has to come through spending cuts, not increased taxation. Cut public spending by 9.5% of GDP, or circa €19billion. End universal access to social welfare including childrens allowance and unemployment payments. An end to the Family Income Supplement - use tax allowances instead. Age relate unemployment - so like with the UK a lower rate of unemployment payment to under 25's.

Public sector pay has to fall further and numbers cut as well. They were not impressed with the average 7.5% pension levy - it has to be a lot deeper.

On taxation there is nothing specific other than the broaden the base without hitting Income Taxes.

The Social partners are just going to love this.........NOT!

Maybe I only read the summary as I don't remember reading about the end of universal access to social welfare. Where did you get that Kerrynorth? Tks

[constitutionus]

within 11 minutes of the report on the IMF report being posted on the ebanking site the reply from lenihan came in saying exactly that KN.

The gov welcomes it and i wouldnt be surprised when they implement this stuff they'll just turn to critics and say "its what the IMF told us to do, just be gland we're doing it instead of them"

[kerrynorth]

Maybe I only read the summary as I don't remember reading about the end of universal access to social welfare. Where did you get that Kerrynorth? Tks

Paragraph 38 on page 26.

[kerrynorth]

within 11 minutes of the report on the IMF report being posted on the ebanking site the reply from lenihan came in saying exactly that KN.

The gov welcomes it and i wouldnt be surprised when they implement this stuff they'll just turn to critics and say "its what the IMF told us to do, just be gland we're doing it instead of them"

Can you link that.

[Middleaged]

Has anyone read the detail of this. IT IS EXPLOSIVE. Especially as it is implied throughout the document that the government agree to all of it.

Highlights: Adjustment has to come through spending cuts, not increased taxation. Cut public spending by 9.5% of GDP, or circa €19billion. End universal access to social welfare including childrens allowance and unemployment payments. An end to the Family Income Supplement - use tax allowances instead. Age relate unemployment - so like with the UK a lower rate of unemployment payment to under 25's.

Public sector pay has to fall further and numbers cut as well. They were not impressed with the average 7.5% pension levy - it has to be a lot deeper.

On taxation there is nothing specific other than the broaden the base without hitting Income Taxes.

Bank bailout to cost at least €35billion - but possibly a lot more as this only refers to property/construction related loans.

The Social partners are just going to love this.........NOT!

Ah yes, "we're only doing what the IMF indicated in its june report, we have alot to do".

This could spark the end of this government, no it will spark the end.

Who'd want this poison chalice?

[Captain Con O'Sullivan]

This method will carefully ensure that all bank debts will be wiped out courtesy of the taxpayer, they can preserve the illusion that the banks are private concerns and when it comes time to report profits again they don't go towards paying off the debt the banks owe us but get funnelled to shareholders.

Nationalised debt, privatised profits. They'll do it again in ten years.