Is Dave mad ?

[Bugsy]

In this Ireland bail-out plan.

I'm a pretty simple sort of bloke but given that he has persuaded (generally) the British public of the need for stringent cuts and reduced income levels to get the country out of the hole its in.

Its seems to me totally idiotic, at this time, to contemplate giving Ireland a 7-10 billion pound loan.

Its even more incredible that the UK would have to borrow that money first.

Confused, Moi !!

.

[Benjamin]

Ireland is a major trading partner with the UK. The UK needs it's economy to stay as bouyant as possible. (In simple terms).

[AnOther]

Like you I am a simple sort however this is my take:

As far as borrowing to lend goes on paper the UK will stand to make a profit out of it simply because, currently anyway, they can still borrow money at a cheaper rate than they will be lending it to Ireland.

Ireland is such an important trading partner that it would serve nobody and ultimately cost UK more to let them go bankrupt.

[just john]

A bit like buying a house from a someone and then getting a mortgage from a bank, Ooops isn't that where we came in[:)]

[Quillan]

[quote user="just john "]A bit like buying a house from a someone and then getting a mortgage from a bank, Ooops isn't that where we came in[:)][/quote]

No, no, no, its like borrowing the money from the bank, buying the house, selling it to the bank and keep the money from the loan and from the sale. Declare yourself bankrupt and pay the debt off a Euro a week at a fixed rate interest of 1%. [8-|]

[woolybanana]

Ah, Irish economics then!

[Mr Coeur de Lion]

Does this mean we finally own all of Ireland then?

[woolybanana]

It is high time we did!

[Frederick]

Ahh ...Twas all the fault of the little people !

http://www.thedailymash.co.uk/news/business/leprechauns-are-stealing-our-gold,-claims-darling-200810021296/

[Quillan]

What I find outstanding is why the Irish never saw this coming as it was apparent from about 10 years ago.

The Irish were given a massive grant from the EU to rebuild, modernise and enlarge their infrastructure (roads, airports, railways, schools, hospitals etc). If people can remember that far back there were amusing stories how 'Paddies' working on the UK roads were being enticed back to Ireland by big money as they (Ireland) did not have enough skilled workers. There were comments about how bad this would be for the UK, road works etc would take longer if these people went back.

So they went home, big bucks were made, new roads were built etc, etc. The people benefited from an unparalleled rise in wealth, house prices increased (remember the one bedroom council flat in Dublin going for 1.5M Euros a few years back). People bought new cars, new TV's, new everything for they were rich and the money just kept rolling in.

The problem then started, the projects finished (there is only so much new road you can build etc), people had no work, they were unemployed. It didn't all happen over night either but over a period of the last three years or so. Ireland became very expensive (have a look on Ebay Ireland at the prices things go for) and the companies like Dell, HP and co couldn't afford to pay the high wages the staff demanded to manufacture, even Amazon moved it's warehouse out.

What the Irish should have done is carry out this work over a longer period of time, not paid such high wages, made sure there was a backup plan, look to see what could go wrong etc, etc. In fact there are loads of things they could have done to either avoid for reduce the effects but unfortunately they went at it like a bull in a china shop and now they are having to suffer the consequences dragging us all in with them.

By the way don't blame 'Dave', this would have happened and the UK would still have to do this, it's just that it happened on Dave's watch not Brown's and of course sh*t like buses always comes at once just when you don't want it.

[Quillan]

[quote user="Mr Coeur de Lion"]Does this mean we finally own all of Ireland then?[/quote]

Actually now's a good time to give the other bit back, who wants it anyway?

[Hoddy]

I do.

Hoddy

[mint]

What I want to know is this:  if there are just over 4 million people in Ireland, wouldn't it be cheaper to give them all say a couple of hundred grand each rather than paying the "country" billions?

And, don't forget, they weren't on the side of the Brits in the last war.  Yes, I know I shouldn't mention the war, but it's a matter of being unable to choose your own neighbours, I suppose.[:'(]

[Renaud]

As I understand it it was Alistair Darling who arranged the billions for Ireland in the gap between the election and his being booted out of the Treasury.

[Mr Coeur de Lion]

I read somewhere that Britain is borrowing the money at 3% and charging the Irish 5%. Good business if true, and it gets paid back of course.

[Gardengirl]

[quote user="Mr Coeur de Lion"]I read somewhere that Britain is borrowing the money at 3% and charging the Irish 5%. Good business if true, and it gets paid back of course.[/quote]

That sounds like very good business sense to me!  [:)]

And as others have said, they are one of our biggest customers - I heard on R4 today that they're the 5th biggest; but I can't help thinking that ordinary people won't be buying as much from us as they have done - they'll be cutting back as much as possible, surely!

[NickP]

I think that somewhere in this farce the name of the Royal Bank of Scotland will crop up, and we will find once again the British taxpayer is really bailing out the banks. As for the question about giving back the other bit of Ireland, the quicker the better in my opinion, along with that bit up north and the other bit in the west.

[Iceni]

Lending money, with no mention of security, to an organisation that is almost certainly insolvent does not strike me as good business. Isn't this sub-prime all over again?

John

[Jazzer]

If only the Chancellor had not gone against the Inland Revenue who had decided that Vodaphone when channelling profits through a Luxembourg based firm in an attempt to avoid paying billions in taxes was a breach of tax avoidance rules. Immediately after the election he cancelled most of the tax bill they were due to pay and said it could go on with it's tax-dodging ruse. The resulting cost in lost tax is at least £6 billion, It would almost take care of the Irish loan.

[Frederick]

[quote user="NickP"]I think that somewhere in this farce the name of the Royal Bank of Scotland will crop up, and we will find once again the British taxpayer is really bailing out the banks. As for the question about giving back the other bit of Ireland, the quicker the better in my opinion, along with that bit up north and the other bit in the west.[/quote]

 

 Which is probably why joint account holders will be covered for £50.000 in future not the £50.000 each it was set at .

[Quillan]

[quote user="gardengirl "]

[quote user="Mr Coeur de Lion"]I read somewhere that Britain is borrowing the money at 3% and charging the Irish 5%. Good business if true, and it gets paid back of course.[/quote]

That sounds like very good business sense to me!  [:)]

And as others have said, they are one of our biggest customers - I heard on R4 today that they're the 5th biggest; but I can't help thinking that ordinary people won't be buying as much from us as they have done - they'll be cutting back as much as possible, surely!

[/quote]

The thing to keep in mind is that this is not like Greece at all where governments have borrowed money to fund massive public sector wages. This is about private debt, people borrowing money and have now become unemployed and can no longer afford to pay back the debt. This coupled with the willingness during the 'boom' years of banks to lend them the money for houses whose prices were grossly overinflated and also for other items (cars etc) has led to the banks basically being owed more money than they have in the cash machines.

If you remember way back when and the 'experts' on this forum talked about borrowing, even gave a link to a YouTube video which implied that banks and the financial system could not function without lending money they didn't have, well the current Irish financial situation shows exactly what happens if you believe in that myth. So yes you are quite right, ordinary people are not going to be spending because they can no longer borrow any money to spend. What the UK is worried about is that it's goods from the UK they buy. So if the UK does not lend the money to the Irish banks they in turn cannot lend it to people who buy UK goods.

I am sure being very sensible you can see exactly whats going to happen here, don't worry about the scientists creating a man made black hole in Switzerland because there will shortly be one in Ireland and it will be the economists and not the scientists than create it and whats going to disappear down it, all the money of course. But it won't be Ireland's money because they don't have any, it will be the money that belongs to the EU and the IMF and where does that money actually come from, come on make a guess. [;-)]

[baypond]

It would amusing if it wasn't so tragic that all the problems in the UK and the USA were supposidly caused by 'masters of the universe' traders taking stupid risks, and yet in regards to Ireland, Greece, Spain and Portugal the press blames it on property bubbles and write downs due to people being unable to pay back their loans. The credit crunch was due to unabated, unregulated lending that created a 'developed world' bubble. When the straw broke the camels back (ie when the worst bits broke first, CDOs etc to loan delinquencies) it swept all banks away. The different scenarios in different countries are due to one thing, and that is economies, governments, people borrowing more money than they can easily repay.

The most worrying part is that as someone once said, YOU CAN'T SOLVE A DEBT CRISIS BY BORROWING MORE.

[mint]

Like I said earlier, why don't we give each Irish person a quarter of a million each and they can spend some of that buying British goods?  Still less than 7 billion?

[baypond]

[quote user="sweet 17"]Like I said earlier, why don't we give each Irish person a quarter of a million each and they can spend some of that buying British goods?  Still less than 7 billion?[/quote]

Hmm not quite - 4,000,000 people x 250,000 is 1,000,000,000,000

[mint]

See, Baypond, I'd never have made a banker, like you?[:D]