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Little austerity poster child is all growed up

by Colman Thu Nov 14th, 2013 at 07:08:35 AM EST

In wonderful news for our austerian overlords, their great success story, Ireland, is to leave bailout mode on December 15th without a precautionary line of credit.

Whoo-hooo. Use this thread to list your favourite statistics showing what a successful economy Ireland is now.


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Of course the reason for the lack of a credit line is that there was no way the Germans were going to sign off on it until after they sort out their coalition talks, if then.

(Colman very busy today. Colman talk small words.)

by Colman (colman at eurotrib.com) on Thu Nov 14th, 2013 at 07:16:20 AM EST
Ireland Exits Bailout With No Backstop: A Good News Story? - Forbes

The political problem is that credit lines from ESM require the approval of all euro area member states and this was not going to be possible now. Germany still does not have a government as Angela Merkel's CDU continue negotiations with the SPD to form a coalition. During these negotiations, the SPD has regularly insisted that they would not support an ESM credit line for Ireland unless the country followed a series of highly specific policy recommendations.

SPD requirements for approval of a credit line included raising the corporate tax rate and introducing a financial transaction tax. The SPD also ruled out any deal that involved used funds from the credit line to recapitalize banks.

This kind of micro-managing of other people's economies was not what most people had expected ESM conditionality to look like. Given the existing raft of EU monitoring programs that exist (the six pack, the two pack, the macroeconomic imbalances) a sensible approach would be to require that a country seeking a credit line from ESM commit itself to meeting the recommendations on macroeconomic policy of the European Commission.

(...)  Missed in yesterday's discussion is that these developments have implications for the ECB's Outright Monetary Transactions (OMT) program. This is the program announced by Mario Draghi after his "whatever it takes" speech last year.  Under this program, the ECB can purchase unlimited quantities of a country's government bonds. However, the ECB decided that countries could only avail of OMT if they had an agreement with ESM for a bailout program or precautionary credit line.

Ask yourself this: If star pupil Ireland couldn't negotiate a precautionary credit line based on reasonable conditionality, what chance is there that a credit line of this sort for Italy will be approved by all countries in the euro area? OMT may have been cast as the plan to save the euro but getting it up and running may not be so easy.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Nov 18th, 2013 at 08:03:38 AM EST
[ Parent ]
Even more to the point: no guarantee that the Germans would have their act together by the time the exit needed to happen!
by Colman (colman at eurotrib.com) on Mon Nov 18th, 2013 at 08:43:48 AM EST
[ Parent ]
Don't be impolitic!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Nov 18th, 2013 at 09:29:20 AM EST
[ Parent ]
Only up to 2012, unfortunately...

You can see the bank bailout in 2010.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Nov 14th, 2013 at 08:09:36 AM EST
So, the is the Irish private sector deleveraging at 13% of GDP?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Nov 14th, 2013 at 08:13:07 AM EST
[ Parent ]
Could be. Actually, with big bankruptcies and loan write-offs, quite possibly.
by Colman (colman at eurotrib.com) on Thu Nov 14th, 2013 at 08:59:47 AM EST
[ Parent ]
A pretty decent current account surplus, too... About 5% in 2012?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Nov 14th, 2013 at 09:15:37 AM EST
[ Parent ]
... as profligate wastrels because [insert sophistry here to arrive at desired conclusion despite beginning with contradictory evidence].

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Nov 18th, 2013 at 06:25:59 PM EST
[ Parent ]
http://www.sbs.com.au/news/article/2012/11/02/wave-irish-trying-their-luck-down-under

Wave of Irish trying their luck Down Under
...When the global financial crisis hit Europe in 2008, one of the first countries to fall into recession was Ireland.

Two years later in 2010, Ireland accepted a financial bailout from the European Union and International Monetary Fund, as its once famous "Celtic Tiger" economy crashed.

(Transcript from World News Australia Radio)

Thousands of jobs were lost and the domestic property market collapsed.

Today, unemployment remains high at nearly 15 per cent.

The high rates of joblessness saw more than 87,000 people emigrate from Ireland last year.

Australia is becoming the new home for thousands of Irish each year.




Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Thu Nov 14th, 2013 at 11:26:47 PM EST
Can't find it anywhere now but only yesterday on TV here (maybe Al Jazeera or even BBC) about how while yes they are exiting EU/IMF bailout , they actually are not paying disability payments any more. There was an example of young mother with a special need child that is not receiving payment any more.
So at least we know who is paying for this...


Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Thu Nov 14th, 2013 at 11:46:19 PM EST
[ Parent ]
I have just seen "new faces of poverty in France" on 24 France program ( in English) and I is really sad. I mean one can find very similar examples everywhere ( here in Australia too for sure) but I was under impression that European social security is much more appropriate then anywhere else. It seems like I was wrong. A lot of homeless young people, lot of single mothers not being able to afford even roof for their kids, people with disabilities eating from food banks...even working people stretched to the edge...  
Pension ( if you live long enough to get it) is about 600 Euros a month...and how the hell one can survive with it in France ( let alone Paris)? Here in Australia single pensioner would receive 1165 Euros a month plus other benefits like almost free medicine/drugs, paying less electricity bills , rates bill . water bill, car registration etc. And it is still hard to live on it especially because accommodation is horrendously expensive. Anyway with new conservative government in place we can soon say Goodbye to most of the benefits here...


Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Fri Nov 15th, 2013 at 12:45:29 AM EST
They've avoided a new potato famine, for the moment.  Time to declare "Mission Accomplished," cut them loose, and let them spin the rest of the way in.  Huge success for the Ueberklass.
by rifek on Sat Nov 16th, 2013 at 01:43:04 PM EST


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