I was against the bank bailout. Still am.
But, I was surprised by this:
Finfacts Ireland Blog: Business & Finance: Irish National Debt: Public spending was 57.3% of GNP in 2009; Deficits in 2008-2013 will amount to
How do critics of the EU/IMF Troika bank bailout feel about the fact that the money borrowed by the Troika was mainly used to plug our dreadful budget deficit primarily, provided we pay the banks' creditors secondarily?Irish National Debt: Public spending was 57.3% of GNP in 2009; Deficits in 2008-2013 will amount to 95bn
University College Cork (UCC) economist, Seamus Coffey, estimated last December that with GDP (gross domestic product) measured at 159.6bn in 2009, total government expenditure equates to 47.1% of GDP. The equivalent GNP figures (gross national product: excluding for example the profits of multinationals operating in Ireland) are 131.2bn and a staggering 57.3%. He asked: is there a higher figure in any country? Blog post
Seamus Coffey said this week that the National Debt will be 192.8bn by the end of 2013. This is 113.5% of the IMFs nominal GDP forecast for 2013. Here is a breakdown of the debt and the proportion attributed to each category.
- Pre-crisis (2007) National Debt - 37.6bn, 19.5%
- 2008-2013 deficit-related Debt - 94.9bn, 49.2%
- Banking-related Debt - 60.5bn, 31.4%
The economist said at the end-of 2013 we will have a huge debt. One-fifth will be what we brought with us into the crisis. Less than a third will be due to the bank bailout. About half of our debt will be due to our own deficits. By 2013 the bank recapitalisations will be over, and we may even see some small return on the money poured into AIB and BOI, with the toxic property loans NAMA process also well advanced. However, our Exchequer deficits will remain and will continue to require further borrowings. With the annual deficit still estimated to be 7.5% of GDP in 2013, the 113.5% Debt/GDP ratio at that stage will continue to increase. Blog Post
If the F.F./P.D./Green Government had had the courage to slash spending in 2010, when borrowing on the open market wasn't a possibility, we could've repudiated the bank debt (I'm sure we could have figured some legal dodge: the whole bank guarantee was built on some dubious promises by Seαn Fitzpatrick that Anglo-Irish's debt were in some way manageable: ditto the so-called "pillar banks").
That deficit has resulted into almost 95bn debts, which considerably exceeds the bank bailout debt. That's extraordinary. That's Fianna Fαil's economic populism: public sector pay bench-marking and pensions, excessive welfare and State pension rises and general inefficient waste.
What would the Labour Party, Sinn Fιin or the fringe socialists have done differently? Their answer, I'm sure, would've been 20bn new taxes annually.
I'm angry with this new deal: the Anglo debt is now truly sovereign debt. Public sector pay reform is piece meal and there will be no great reform of welfare. The lazy spivs have won.
For now, perhaps...