The Finance Dublin Irish Debt Clock ticks on inexorably
See the Republic of Ireland's national debt mount up, a measure of the legacy the Irish Government is in the process of bequeathing to the children of Ireland:
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The FINANCE DUBLIN Irish Government Debt Clock was set at midnight on June 30th 2009, when it was €65.278 billion.
(25 August): S&P downgrade disputed by NTMA, but, the main problem - non banking bailout costs - remain
The most negative aspect of the S&P re-rating on August 24th 2010 is the 'outlook negative' aspect, rather than the actual rating, the aspect the NTMA focusses on in disputing the validity of the downgrade. Here's what S&P say on this aspect: "The negative outlook reflects our view that the rating could be lowered again if--as a result of its support for the financial sector or due to a more sluggish economic recovery (emphasis added)--the government's fiscal performance improves more slowly than we currently assume."
"Conversely, the outlook could be revised to stable if the Irish government looks more likely to achieve its fiscal target for the underlying general government deficit of less than 3% of GDP by 2014, or if the banking sector stabilizes more quickly and at a lower fiscal cost to the government than we now think likely."
As argued many times in this page, since the Finance Dublin Debt Clock was set up in July 2009, while the cost of the banking bailout is admittedly very serious, the much more serious issue is the excessive cost of the state in the economy, which currently sees the national debt as rising by some €18 billion a year. This compares with a estimated total net (once-off) cost of the banking bailout of €25 billion to €30 billion.
Continued emphasis on the (admittedly serious) cost of the banking bailout, Anglo-Irish bank etc., at the expense of focus on Ireland's unsupportable current and capital spending Budget (now costing 5.35 per cent p.a. in the bond markets to fund) will continue to put Ireland's credit rating unfavourably under the microscope.
As a close reading and assessment of S&P's statement shows, a positive result could be achieved by a decision from the Irish Government that it will address the issue of Ireland's deteriorating credit ratings head-on in the forthcoming Budget by going further than previously announced in cutting down the spending programmes for 2011, 2012, on capital and current account than the (now clearly inadequate) €3 billion it has previously signalled for the 2010 Budget - i.e. bringing forward its fiscal consolidation plan.
Such would be consistent with the principles enunciated by the Minister for Finance in his Beal na mBlath speech on August 22nd. Lenihan's statement that “We know from the 1980s that unless businesses are confident about the Exchequer’s long term position, they will not create new jobs" shows that this awareness is there - and that policy framed to underpin business and household confidence is key to (a) recovery in tax revenues, which springs from expanded employment primarily, and (b) a stabilisation in the property market, upon which the financial cost of the banking bailout will crucially depend.
(22 August): Minister for Finance, Brian Lenihan sets out economic philosophy at Beal na mBlath
A measure of the modernisation of the Irish Republic is the fact that the first Fianna Fail minister to be asked to speak at the annual commemoration of the Irish civil war assassination of the country's second Finance Minister, Michael Collins, chose to make an address that dealt centrally with fundamental issues of economic policy and philosophy. The speech at Beal na mBlath, on August 22nd, allows us to discern the underlying economic and political principles of the 25th and current Irish Finance Minister, Brian Lenihan.
On economics........
The priorities....
“ three elements are essential to the recovery and maintenance of future employment:
1. We must improve our competitiveness
2. We must restore sustainable public finances
3. We must ensure that credit is available for businesses and households
Competitiveness
“In a small open economy like ours, competitiveness is essential to creating sustainable jobs.
Public finance
“Job creation requires that the public finances be put back on a sustainable path.
The role of private enterprise
“We know from our own and from international experience that only the private sector can create enough good jobs to meet the demands of our highly-trained young people and to solve the unemployment problem.
The role of business confidence and rational expectations
“We know from the 1980s that unless businesses are confident about the Exchequer’s long term position, they will not create new jobs.
A functioning private credit system
“Credit must be available to businesses that want to invest and create jobs. To provide such credit banks must attract funding which they can then lend on to these sustainable businesses. The measures adopted to resolve the banking crisis, including the creation of NAMA and support for individual financial institutions, are grounded in realism.
Equality
“Collins and the founders of this State were determined that all citizens should have equal rights and equal opportunities.
Economic dogma
“Very few even of the most eminent economic experts, domestically, within the European Union, or internationally, foresaw the speed and extent of the crisis, either here in Ireland or worldwide. By the same token, none of us should be dogmatic in our certainties.
Noted predecessors
“There is no substantive connection between the economic and financial position we confront today and the totally different challenge faced by Collins and his contemporaries. But as I look at those pictures of my predecessors on the wall in my meeting room I recognise that many of them, from Collins through to Ray McSharry, had in their time to deal with immense, if different, difficulties.
Public finance accounting
“less often recognised is Collins’s work in putting in place an accounting system that required government departments to give full reports of expenditure to the Dail, and also required that any financial proposal brought to Cabinet should be first submitted to the Minister for Finance. Here was a man at constant risk of arrest and death, running a ruthless guerrilla war and masterminding the highly efficient intelligence system which secured its success. Yet he still had the time and the ability to build the foundations of a system of financial control. He recognised that such a system was essential to the running of a State.
The ultimate source of economic stimulus
“I am comforted by what their stories tell me about the essential resilience of our country, of our political and administrative system, and above all of the Irish people. That is why I am convinced that we have the ability to work through and to overcome our present difficulties, great though the scale of the challenges may be and devastating though the effects of the crisis have been on the lives of so many of our citizens.
On politics and the pantheon of Irish republican icons....
On Collins:
“No man is fully formed at the age of 31.On Collins and De Valera
“They shared much, in terms of their devotion to Ireland, their interest in its language and culture, their piety, their social conservatism.
“In recent decades, however, the full magnitude of Collins’s achievements has, I believe, come to be appreciated and valued by Irishmen and women right across the political spectrum. But at times this has, regrettably and unnecessarily, been accompanied by a denigration of Eamon De Valera, as if only one of the two could win the approbation of history.
“Each was, at different periods, prepared to operate within the constraints of the realities facing him, without losing sight of his greater vision of a free, prosperous, distinctive and united Ireland.
“....part of the healing process on our island must be an acknowledgement, aided by the work of modern historians like T. Ryle Dwyer and the late Peter Hart, that, alongside great patriotism and self-sacrifice, terrible deeds were done on all sides during the War of Independence and the Civil War.
(The full speech is at this link on the Department of Finance's website)
The Finance Dublin Debt Clock one year on (Update 23rd July 2010):
The Debt Clock, launched in July 2009, surpassed €85 billion this month, up from €65 billion in July 2010 and it has shown little sign of moderating in 2010 to date, rising by €8.3 bn since the end of December 2010.
This, as well as recent assessments from the IMF, Moodys and others underlines the advisability of deeper current and capital expenditure cuts than has been advised by the Government and the ESRI, as well as greater efforts than signalled to date to broaden the tax base, currently heavily reliant on PAYE workers, particularly those in higher bands.
Farmleigh 2010 - only a pale shadow of MacSharry & "An Bord Snip 1"?
This might seem harsh, but ultimately it is based on a greater degree of faith in the forces of confidence that would be unleashed amongst the private sector, including consumers, if they thought that effective action was underway to restore the economy to stability. In the late 1980s the equivalent debate occurred, when 'Keynesian' economists doubted the efficacy of MacSharry's resolute action on the back of "An Bord Snip 1" to sharply cut public spending. They were proven wrong, and the 'Celtic Tiger' followed. History is repeating itself today - and hopefully the Keynesian view will be returned to its proper resting place - the retirement home for defunct economists of the 1930s, 40s and 50s. The sooner we move beyond this limited and defunct thinking, and return to an understanding that a Small Open Economy/Rational Expectations model is what applies in Ireland, the sooner we will see the return of the, much needed, 'Celtic Tiger' competitive economic conditions of the second half of the 1990s.
A number of reports and commentaries in recent weeks provide further insight on the Irish economy.
The link between Croke Park, and those who weren't there - patients, schoolchildren, and the retired
The Debt Clock, as stated, provides little enough encouragement to date, as well as an impression of complacency about the depth of the economic problem, and the continued signs of an absence of a clear understanding of the workings of the Irish macro-economy in recent Government ministerial statements, including from the Taoiseach, Mr Cowen. The Farmleigh meetings, focussing on cuts of (an inadequate) €3 billion (necessarily targeted against public services provided to the general public such as patients, schoolchildren, and the retired, because of the Croke Park deal) are the basis of the much mentioned media 'pessimism' that the Taoiseach in particular has been complaining about.
The important IMF Staff Report on Ireland, published in July 2010 contained some dramatic statistics, including the following, revealed for the first time:
Total public expenditure (current plus (net) capital) was 47 per cent of GDP in 2009, a, scary, 13 points up on the total public expenditure figure of 34.5% in 2007. Within this total, the share of GDP accounted for by 'Public Sector Compensation' (pay, pensions and perks) rose from 9.5% of GDP to 12% of GDP.
See: (IMF Country Report No. 10/209, July 2010, (Page 30)): Table 3. Ireland: General Government Finances (In percent of GDP). at this link on the IMF's website
Update 13th July 2010:
Debt clock shows no sign of slowing in the first six months of 2010 as €8.83 billion added to Ireland's National Debt
Latest figures from the NTMA show that the national debt shot up from €75.15 billion at the end of 2009 to €83.984 at the end of June 2010. This annual rate of increase in the debt of 23.5 p.c. in the year showed no sign of abating in the latest couple of months, and underlines the continued gravity of the Irish Exchequer's financial position.
Clearly, despite whatever good work has been done - and which was widely lauded internationally - not enough has been achieved yet in reducing the level of state expenditure. This page consistently has argued that the focus of deficit reduction must be on the spending side (including the so-called 'Capital' Budget*) rather than taxation of the employment creating productive (i.e. market facing), and export sectors of the economy. This view is beginning to get the upper hand internationally (vide the G20 Communique from Toronto), although it has its dissenters, for example Paul Krugman, the extreme Keynesian economist, who, in a New York Times column at the end of June, again erroneously maintained that Ireland's efforts to date to rein in public expenditure had resulted in an aggravation of the domestic recession. The publication of his column (inconveniently for Prof Krugman's thesis) coincided with the publication of first quarter GDP data for Ireland showing that the economy's GDP had emerged from recession (although not (yet) shown in the GNP figures).
* Note: It should only be called 'capital' if it is balance sheet capital injected into the balance sheets of productive, i.e. profitable state owned or indeed private corporate enterprises.
Update 21st May 2010:
More fantasy economics from the New York Times on Ireland:
Two (Keynesian) economists, one of them a former chief economist of the IMF in the New York Times today say: 'The remarkable success of this tax haven (sic, referring to Ireland) means that roughly 20 percent of Irish gross domestic product is actually "profit transfers" that raise little tax for Ireland and are owned by foreign companies. Since most of these profits are subject to the tax code, they are accounted for in Ireland where they are lightly taxed; they should not be counted as part of Ireland's potential tax base. A more robust cross-country comparison would be to examine Ireland's financial condition ignoring these transfers. This is easy to do: a nation's gross national product excludes the profits of foreign residents. For most nations, gross national product and G.D.P. are nearly identical, but in Ireland they are not.
"'When we adjust Ireland's figures accordingly, the situation is dire", they continue: "The budget deficit was about 17.9 percent of G.N.P. in 2009, and based on European Commission projections (and assuming the G.N.P.-G.D.P. gap remains the same) it will be roughly 14.6 percent in 2010 and 15.1 percent in 2011, while the debt-to-G.N.P. ratio at the end of this year is expected - by our calculation - to be 97 percent, and 109 percent at the end of 2011. These numbers make Ireland look similarly troubled to Greece, with a much higher budget deficit but lower levels of public debt".
(WARNING: Don't believe these numbers, they are a figment of these writer's imaginations).
The fallacy here lies in their phrase 'they should not be counted as part of Ireland's potential tax base'. Why not?, they are taxed (at the prevailing corporation tax rate) and are therefore legitimate tax revenues (although, clearly, the authors don't believe they should - and this is the rub).
Although the authors clearly lie on the side of the ideological fence that would wish that such tax revenues were not part of Ireland's tax base, they are, and, unless the EU were to introduce harmonised fiscal (and spending) policies (including, of course, upwards adjustment in the percentage of EU GDP/GNP passing through the hands of EU/Irish bureaucrats) their analysis remains fantasy, and not evidence-based.
The evidence is otherwise. Ireland, as the below analysis makes clear, possesses a more competitive economic base than its more Southerly European neighbours, and for this reason, sharp fiscal contraction, in the form of sharp spending cuts (not tax increases, other than to widen the tax base) will get the Irish economy out of the mess it is in - the economy, being more competitive, can recover faster, if and when its people (the Irish private sector) can see that there is a rational basis for them to invest in their country again. (Remember that, currently, slightly dated, term 'rational expectations'?). To the extent that Ireland's Southerly EU neighbours in the EU (and, for that matter, its more Northerly European neighbours also) adopt pro-competitiveness economic measures they also will be successful in resolving their debt crises.
What many of these visiting international Keynesians do not realise is that Ireland was in a similar economic trough in the mid 1980s, when its Debt/GDP-GNP ratio rose above 100 p.c., and following sharp spending-focussed corrective action at that time (of a scale unmatched in any OECD country since the OECD was set up after the World War 2), the Celtic Tiger 1987-2001, followed, unsupported by the credit and public sector bubble that spoiled the economy in more recent years.
To 'visiting Keynesians' we would offer the following reminder, from Keynes' own life: ten days before he died (in 1946) when he told the English economist Henry Clay over lunch at the Bank of England, of his hopes that Adams Smith's 'invisible hand' can help Britain out of the economic hole it is in:
"I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago". On 22 April 1946 The Times obituary wrote of Keynes: "To find an economist of comparable influence, one would have to go back to Adam Smith."
Update 10th May 2010: Now its everyone's problem: the EU's c. €750 bn 'Stabilisation' fund lets Greece and other profligate countries off the hook:
The EU stabilisation fund set up over the weekend, while it averts the short term threat of contagion in the Eurozone bond markets, still contains the seeds of its own destruction - i.e. the potential to actually spread the contagion, because moral hazard and 'too big to fail' is still underwritten for countries whose Governments (including Ireland) continue to borrow beyond their capacity. The ultimately most damaging aspect is the green light for the ECB to directly intervene in Government bond markets - which, while it is claimed that such intervention will be 'sterliised' is a step towards the European Council of Finance Ministers being equipped with their very own printing press. While Irish Government bond yields fell on Monday morning, and Irish bank shares rose, the immediate bottom line judgement of the markets on this was that German 10 year bond yields rose (by 18 basis points, as reported by Bloomberg), and US 10 yr Treasuries by 14 basis points. The overall verdict is that the EU package is inflationary on a global scale, with the result that world interest rates went up by almost 0.2 per cent.Update 9th May 2010 : Why the Debt Clock for Ireland continues its unabated rise, despite some positive news on tax revenues
The national debt rose in April by more than expected, by 3.7 per cent, or by €2.92 billion. This was the biggest increase seen since the Finance Dublin debt clock was first set in July 2009. This is despite Exchequer figures showing an improved yield to the Exchequer in tax, and welcome signs of Government underspending on both the current, and capital account. An immediate (and politically painless) gain for the Irish Exchequer would be an internal freeze on this already budgeted spending, (which would involve dismissing suggestions by some financial sector economic commentators that this is a bad thing (on the belief presumably that bureaucratically-directed (Public Capital Programme) 'stimulus' is what the Irish economy needs)). The increased cost of servicing Irish borrowing because of the widened spread between Irish and German bonds is a negative development outside of Irish control, and makes fresh action on the Budgetary front all the more urgent. (This point is also made by economist and chairman of 'An Bord Snip' Colm McCarthy in an article in the Irish Times (May 7th 2010)).
Why Irish taxpayers should not be asked to support any further moves to bail out Greece (posted: May 9th)
The Irish Government should not support any further moves by the EU to bail out Greece. Greece, the cradle of democracy, should be able to sort its own problems out, and the rest of the EU should not therefore feel any responsibility to bail them out. The European Union is not a political union, or a superstate, and there is no constitutional underpinning for that to be the case – certainly not in the Lisbon Treaty, which is all that Ireland, and the rest of the Union have signed up for.
There are several good reasons why Irish taxpayers should not bail out Greece, and why Ireland should do all it can to support and encourage moves by its fellow member states not to do so. This position would have all the more credibility, given Ireland's (inaccurately) perceived status as an economically moribund member state of the Eurozone in the so-called pejorative 'PIIGS' category.
Ireland is actually far better positioned for growth than the other 'PIIGS', once (and if) it implements spending cuts. This is underlined by the following World Bank figures (from the World Bank 'Ease of Doing Business' Report 2010):
Global Ranking, Overall Ease of Doing Business (an amalgam of 38 'ease of doing business' indicators, including factors such as investor protection, number of tax payments, ease of hiring staff, and enforcement of contracts).
However, there the comparison ends. As the World Bank Report shows, Ireland's underlying economy is in far better shape to recover from here. The solution for Greece (and the rest of the Eurozone) shall be to try to emulate the economic strengths of its competitor nations in the world, outlined in the Report.
Closer examination of the World Bank report shows that Ireland is at the top of the world rankings in several of the sub components of the 38 'Ease of Doing Business Indicators'.
Ireland's best rankings are as follows:
a) 'Protecting Investors' (5th in world, equal with the US, and ahead of the UK, which is at 10th).
b) 'Paying Taxes' (6th in world) (UK:16th, and US 61th)
c) 'Closing a Business' (6th)
d) 'Starting a Business' (9th).
It is notable that in the two key areas for IFSC competitiveness, financial regulation (reflected in the 'investor protection' index), Ireland emerges as close to best in class, belying the 'wild west' depiction peddled in some international press comment, which tended to focus on a so-called 'light touch' regulatory policy with regard to IFSC regulation, and in taxation, where Ireland's index performance reflects both the low ratio of company profits taken in taxes (26 p.c.), as well as the relative lack of corruption in Irish tax collection, which in turn reflects the high standard of tax administration and efficiency achieved by the Irish Revenue Commissioners over the years.
In most areas Ireland also comes out well ahead of fellow Eurozone members Germany, and France (ranked at 25th and 31st in the overall 'Ease of Doing Business' table).
Further details from the Report can be seen at the below links:
http://en.wikipedia.org/wiki/Ease_of_Doing_Business_Index
http://www.doingbusiness.org/
The reasons why Irish taxpayers should not bail out Greece:
1.There is no direct danger of currency instability – the Eurozone (unlike its forerunner, the European Monetary System is not a fixed exchange rate regime of separate currencies). Currencies are not a route of attack by markets on individual countries.
2.The Greek debt crisis is a sovereign debt crisis however. It is also, potentially the forerunner to another European banking crisis, on a scale similar to that which developed on Wall Street in 2008, with the ultimate collapse of Lehmans, (and with it, the main Irish banks, amongst other casualties). This is because banks are being asked to hold unprecedented reserves in Government debt (and are beginning to be required to do so by regulators across the EU – an example of a potential unintended consequence of the recent Irish decision to seek a primary reserve ratio of 15 p.c. – a significant part of which will have to be held in the Exchequer debt of European countries). Can Irish taxpayers be happy that Ireland's newly recapitalised Irish banks are being required to invest the money they are painfully raising in Greek Exchequer bonds?
3.All countries with unstable public finances (not just those who are members of the Eurozone) are potentially in the firing line. This could include European Union members whose currencies shadow the euro, and whose deficits are high, including, for example, the UK.
4.Lending money to Greece costs Ireland and other EU taxpayers money they cannot afford, and is a bad place to lend money to. Therefore bailing out Greece helps spread the sovereign debt contagion to already weakened countries such as Ireland and Portugal. The aim of the EU should be to nip the contagion in the bud rather than spread it.
5.Greece is probably going to default anyway. So bailing them out is throwing good money away before bad.
6.It is not helping the Greeks to stave off the inevitable – all it does is prolong their misery. Keynesians argue that the inevitable cutbacks in spending and tax increases (in Greece's case involving reform of the tax system to counter widespread tax evasion) that would be involved would result in hardship in the short term. Short term 'hardship' or austerity only replaces long term hardship, which will be visited inevitably when the default happens, and when nobody will lend to them any more, as will inevitably happen.
7.Ireland taking a strong stance such as this would tend to increase perceptions of Ireland as a good credit risk in the sovereign debt markets.
8.The main reason why we should resist a Greek bailout is that it reinforces the view that other Eurozone countries are 'too big to fail', and that the underlying causes of the malaise will rumble on. This happened when Bear Stearns was rescued in Phase I of the credit Crisis, because it sent out a signal that bigger institutions, such as Lehmans would also be supported, being 'too big to fail'. As a result, investors and depositors continued to place their faith in Lehmans, which was a much bigger fish, which when it was let fall, resulted in the Armageddon we saw in the first phase of the credit crisis. If Bear was let fall, then the problem would have been nipped earlier, with smaller global consequences.
9. For Greece, read Bear Stearns, for Lehmans, read Spain, or Ireland (?). Thus, the EU should nip the problem in the bud – if not, there is a very high probability that the contagion will spread. The buck has to stop somewhere. The European Union could ultimately be consumed. The sovereign debt crisis could spread by weakening the price of Exchequer debt held in the balance sheets of European banks, the main conduit of this next potential financial virus.
Update March 30th 2010: The NAMA bailout in context
The size of the NAMA bailout , even at the highest estimate made of its funding appetite to date, and reflecting, as it rightly should have done, a conservative haircut of 47 p.c. on loans acquired, still dwarfs the impact on Ireland's national debt of the underlying imbalance between state tax revenues, and public expenditures.
The total cost of NAMA, at its worst, put at something north of €30 billion, was guesstimated by the Minister for Finance to be recoupable within 10 years by the Exchequer in his statement to be found at the below link. This estimate was backed as reasonable by the Governor of the Irish Central Bank, Patrick Honohan on Irish television on the night of the NAMA announcement on March 30th.
(Finance Dublin has editorially opposed NAMA in principle, (while accepting that the original Government guarantee was unavoidable) (see the link below:
'Moral Hazard’, NAMA & the Irish taxpayer' (Op-ed in the August 2009 Edition of Finance Dublin)
Now that the NAMA process has begun, we favour an approach that utilises the banking resolution skills of the two main banks in particular (AIB and Bank of Ireland) going forward rather than those currently available to the newly created NAMA. NAMA's organisational lack of experience, by comparison with commercial banks, as well as issues of transparency and mechanisms of accountability still raise concerns as to whether the process as it now stands is best for purpose.
Statements on the bailout from NAMA
Op-Ed in the March 2010 issue of Finance Dublin: 'Evidence-based Economics'
Update March 4th 2010:
Mildly encouraging signs have emerged that the Minister for Finance and Government have initiated early action amongst spending departments to obtain spending cuts from budgets in 2010. However, the National debt shows no sign of abating its ruinous growth, based on the latest update of the national debt from the NTMA, which necessitated only a small adjustment in the Finance Dublin debt clock for this month. It remains the case that there are just two alternative engines of recovery available to the Irish economy - the private sector, or the public sector. The Government, and any alternative Government, has to choose which horse it will back to restore the economy. The private sector horse has the form, because it has the experience, the talent, the production, engineering, marketing, and exporting expertise that will bring the Irish economy back to growth. By contrast the public sector is a totally inappropriate vehicle, being skilled only in administration and the delivery of social services, and delivering lower productivity, because of less accountability though the demands of market forces. Public sector stimulus - measured by the monthly mounting total of the Irish national debt will only destroy the economy and its productive capacity (e.g. through emigation). Therefore, Government policy must focus primarily on diverting resources into encouraging the private sector to recover through taxation and other measures.Update: (February 6th 2010)
The Exchequer returns for January 2010 confirm our earlier assessments that the Budgetary strategy in the two tax rate raising (but expenditure preserving) Budgets of 2008 and 2009 would prove disastrous for employment, and would not result in boosting the real economy and employment based tax revenues. This is shown in the unexpectedly poor returns for tax revenues (as compared with the originally published Budget forecasts) under several tax headings, such as corporation tax, capital gains tax, stamp duty, income tax, and VAT. (The Central Bank's latest Bulletin shows that employment in Ireland fell by 250,000 since 2008, and unemployment rose in the same period by 150,000, with the rate now edging up into the low teens).However, our forecast (see December 9th Update below) that the policy decisiveness evident in the December Budget would result in a lift in the economy's fortunes have been borne out in independent surveys of consumer and employer confidence for December-January, and can now be expected to lead to some boost to tax revenues in the months ahead (the January Exchequer returns were also adversely affected by exceptionally poor winter weather conditions).
Overall, despite the welcome for the change in direction shown in the December Budget, the Irish economy is not out of the woods, as evidenced by the fact that the debt clock is still rising by approx. €1 billion a month. Further cuts in expenditure this year of at least €5 billion off current budgets will be needed to ensure a continuation of the turn-around, and restore the Irish economy to the healthy condition that is entirely possible. The Irish economy is one of the most flexible in the world, and this positive feature will be demonstrated again, if a consensus is achieved by Government, unions, public service members, and the nation that the real solution of the Irish economic crisis is the Irish people themselves, left to their own resources to work, and earn their way out of the crisis with their own ingenuity, using the skills and specialist knowledge of their own trades, careers, and businesses to do so.
Update (December 9th 2009):
Lenihan probably right to say 'we have turned the corner' as Budget signals a fundamental shift in the right direction for Irish fiscal policy
The NTMA's latest figure for Ireland's National Debt.
At the rate the debt is accumulating, it is set to double by a moment in the month of May 2013. For an indication of how the debt is growing, subtract the latest figure published by the NTMA at the above link from the current Finance Dublin Debt Clock figure above.
Ireland slowed down and reversed its debt clock between the late 1980s and the beginning of the 2000s.
To find out how it can be done again, read the below articles:There IS a solution to Ireland's economic crisis. It is very simple because ECONOMICS DOES NOT LIE. It is contained in the three pronged strategy contained in the following paragraph:
The 'Bord Snip Nua' Report (of the 'Special Group on Public Service Numbers & Expenditure'), published by the Irish Government on July 16th 2009 identified savings in Exchequer non pay areas of €5.3 billion in a full year. These, once implemented, could have the potential of slowing down the clock by a third. However, the 'Bord Snip' cuts would, in themselves, still not be sufficient, as the Irish state remains on a trajectory of borrowing almost €20 billion a year. However. an across-the-board public sector pay cut of 15 to 20 per cent, IN ADDITION, to the non pay cuts outlined in the Bord Snip (McCarthy) Report, as outlined below, would, in conjunction with large cuts in state capital expenditure projects in the Public Capital Programme, be enough to effect a stabilisation of the Irish fiscal trajectory, and a slowdown in the Debt Clock to a sustainable level.'The need for supply side-focused tax cuts in Ireland's Budget in December' (Op-ed article in the November 2009 Edition of Finance Dublin)
'The three pillars of an Irish economic recovery’ (Op-ed article in the October 2009 Edition of Finance Dublin)
and on:NAMA and the Irish Taxpayer
'Moral Hazard’, NAMA & the Irish taxpayer' (Op-ed in the August 2009 Edition of Finance Dublin)
Potential Impact of the McCarthy ('Bord Snip') Report
(See the full statement on the 'Special Group on Public Service Numbers & Expenditure' Report Here).
The NTMA publishes historical data for the national debt Here
(The NTMA debt total for September 30th of €70,754 million compares with figures it published for the three earlier months of €69,290 million for August 31st 2009, €67,009 million on July 30th 2009, and €65,278 million on June 30th 2009).