Irelands unemployment to hit 14.4% by 2010
Discussion
Err, it's hard to pick the worst bits from the article from the telegraph as it's all pretty unpleasent reading if your Irish.
"Brian Lenihan, the finance minister, outlined a grim package of 1930s-style retrenchment, slashing child benefit and allowances for jobseekers. Road and railways projects will be frozen. There will be a cull of junior ministers save costs. Two-thirds of the belt-tightening will come from tax rises. A pension levy of 1pc – imposed in the face of bitter protests in January – will be doubled to 2pc.
"These measures will reduce all our living standards. I'm acutely aware of that," Mr Lehinan told the Dail.
The slide into deflation threatens an economy struggling to cope with a property bust. Construction rose to 21pc of GDP in 2007, compared 11pc in the US at the height of the sub-prime debacle. Household debt stands at 190pc of disposable income, one of the world's highest. Deflation increases the burden of the debt.
Julian Callow, Europe economist at Barclays Capital, said Ireland requires the same drastic mix of "quantitative easing" and devaluation under way in Britain.
"If Ireland was running its own monetary policy it would not be in its current state. The imbalances would never have built up to the same extent in the first place. They now need a 20pc devaluation to get out of this. If they try to cut wages it could lead to debt deflation, and that will unleash another set of financial problems," he said.
The country has been simultaneously hit by two "asymmetric shocks": the global banking crisis has punished Dublin's "Canary Dwarf" financial industry, worth nearly 10pc of GDP; and since half its exports go to Britain and the US – the highest of any eurozone state – it has suffered the full brunt of sterling's crash and the overvalued euro.
Shoppers are pouring into Ulster border to buy supplies, devastating the retail industry along the borders. Mr Lenihan has accused Britain of "beggar-thy-neighbour" tactics.
http://www.telegraph.co.uk/finance/financetopics/f...
However the Irish deserve all they get for the outrageous price I was charged for a pint when I went to Dublin last November.
"Brian Lenihan, the finance minister, outlined a grim package of 1930s-style retrenchment, slashing child benefit and allowances for jobseekers. Road and railways projects will be frozen. There will be a cull of junior ministers save costs. Two-thirds of the belt-tightening will come from tax rises. A pension levy of 1pc – imposed in the face of bitter protests in January – will be doubled to 2pc.
"These measures will reduce all our living standards. I'm acutely aware of that," Mr Lehinan told the Dail.
The slide into deflation threatens an economy struggling to cope with a property bust. Construction rose to 21pc of GDP in 2007, compared 11pc in the US at the height of the sub-prime debacle. Household debt stands at 190pc of disposable income, one of the world's highest. Deflation increases the burden of the debt.
Julian Callow, Europe economist at Barclays Capital, said Ireland requires the same drastic mix of "quantitative easing" and devaluation under way in Britain.
"If Ireland was running its own monetary policy it would not be in its current state. The imbalances would never have built up to the same extent in the first place. They now need a 20pc devaluation to get out of this. If they try to cut wages it could lead to debt deflation, and that will unleash another set of financial problems," he said.
The country has been simultaneously hit by two "asymmetric shocks": the global banking crisis has punished Dublin's "Canary Dwarf" financial industry, worth nearly 10pc of GDP; and since half its exports go to Britain and the US – the highest of any eurozone state – it has suffered the full brunt of sterling's crash and the overvalued euro.
Shoppers are pouring into Ulster border to buy supplies, devastating the retail industry along the borders. Mr Lenihan has accused Britain of "beggar-thy-neighbour" tactics.
http://www.telegraph.co.uk/finance/financetopics/f...
However the Irish deserve all they get for the outrageous price I was charged for a pint when I went to Dublin last November.
I agree completely with the Telegraph report. A good point made by Lennihan, is that Britain is playing beggar thy neighbour. Actually we are not doing this just to make problems across the Irish Sea. Devaluation is a necessary part of the UK's long, slow rehabilitation. Those countries in the Euro will have to figure a different way to salvation, if the Euro stays strong. Already Germany is feeling the chill from its reliance on exports, although this has as much to do with the breakdown in world demand, as it has to do with currency strength. From my own research, it looks increasingly like countries will choose devaluation, as a way of maintaining domestic employment. I read today that Switzerland is trying to get the Swiss Franc devalued for this very reason. Of course China has been manipulating it's currency for years. Look to South Korea and other South East Asian states to follow suit.
Poor old Ireland, they are really facing a dilemma. If they play good Europeans, they will get support from Brussels. This won't be nearly enough to prevent massive unemployment and huge social unrest. If they vote down the Lisbon treaty, they'll be punished by a vengeful Brussels. The Euro was always a political fix not an economic solution and will I believe start to unravel over the next two years.
As to overcharging you in Dublin for a pint, well, completely beyond the Pale.
Poor old Ireland, they are really facing a dilemma. If they play good Europeans, they will get support from Brussels. This won't be nearly enough to prevent massive unemployment and huge social unrest. If they vote down the Lisbon treaty, they'll be punished by a vengeful Brussels. The Euro was always a political fix not an economic solution and will I believe start to unravel over the next two years.
As to overcharging you in Dublin for a pint, well, completely beyond the Pale.
Edited by ianash on Tuesday 7th April 23:53
On a more positive note:
"The Irish budget yesterday was a tough budget. The type of budget that in reality Britain needs to implement to get the economy back on track. Welfare cuts and tax hikes are never popular moves. Brian Lenihan, the finance minister, said right at the beginning of his speech
… before we ask anyone else to give, we in this House and in this Government must examine our own costs. Those of us in politics have been entrusted with a great privilege by the people. We must lead by example.
Irish politicians rightly feel they need to share the pain - pensions for serving politicians are to be discontinued and allowable expenses cut by 10% across the board. The Irish President Mary McAleese has already announced that she will be taking a 10% pay cut in light of the current budgetary troubles. The finance Minister Brian Lenihan and his ministerial colleagues took a 10% wage cut last year. The opposition leader has instructed his party’s parliamentarians to take a 5% cut. The governor of the Irish Central Bank and Financial Services Authority has volunteered to also surrender 10% of pay. The state broadcaster RTÉ’s top six executives are taking a “significant reduction” in pay.
In contrast last week British MPs accepted a 2.33% pay rise…
http://www.order-order.com/
"The Irish budget yesterday was a tough budget. The type of budget that in reality Britain needs to implement to get the economy back on track. Welfare cuts and tax hikes are never popular moves. Brian Lenihan, the finance minister, said right at the beginning of his speech
… before we ask anyone else to give, we in this House and in this Government must examine our own costs. Those of us in politics have been entrusted with a great privilege by the people. We must lead by example.
Irish politicians rightly feel they need to share the pain - pensions for serving politicians are to be discontinued and allowable expenses cut by 10% across the board. The Irish President Mary McAleese has already announced that she will be taking a 10% pay cut in light of the current budgetary troubles. The finance Minister Brian Lenihan and his ministerial colleagues took a 10% wage cut last year. The opposition leader has instructed his party’s parliamentarians to take a 5% cut. The governor of the Irish Central Bank and Financial Services Authority has volunteered to also surrender 10% of pay. The state broadcaster RTÉ’s top six executives are taking a “significant reduction” in pay.
In contrast last week British MPs accepted a 2.33% pay rise…
http://www.order-order.com/
HundredthIdiot said:
eta: Unemployment benefits unchanged at over €200 a month, from what I heard in the speech.
"In one of the toughest budgets in Irish history, Lenihan announced that unemployment benefit for the under-20s would be halved to less than €100 per week. Payments on early child care have also been halved. One of the most emotive cuts in the budget was the end of the republic's traditional Christmas bonus payment for social welfare recipients"http://www.guardian.co.uk/world/2009/apr/08/irelan...
Fittster said:
HundredthIdiot said:
eta: Unemployment benefits unchanged at over €200 a month, from what I heard in the speech.
"In one of the toughest budgets in Irish history, Lenihan announced that unemployment benefit for the under-20s would be halved to less than €100 per week. Payments on early child care have also been halved. One of the most emotive cuts in the budget was the end of the republic's traditional Christmas bonus payment for social welfare recipients"http://www.guardian.co.uk/world/2009/apr/08/irelan...
Fittster said:
"In one of the toughest budgets in Irish history, Lenihan announced that unemployment benefit for the under-20s would be halved to less than €100 per week. Payments on early child care have also been halved. One of the most emotive cuts in the budget was the end of the republic's traditional Christmas bonus payment for social welfare recipients"
OK, forgot about that. But aside from Christmas bonus, the reduction is only for under 20s, which can't be a huge proportion of the workforce.I might be €1k a month worse off with this budget, with tax increases and the reduction in child-related benefits.
Ho hum.
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