IMF: a huge disappointment

Teatime

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Why are the IMF so ruthless in other countries and so toothless in Ireland?

I am listening to all the political partys and its abundantly clear to me that none of them are prepared to make the harsh decisions we need e.g. political pensions and salaries, public sector numbers etc

I expected the IMF to come in and eliminate waste all round us and take a big chunk out of the budget deficit. But no, we're still borrowing millions every day and making our basket case of a country even worse in the long run.

Are they blind?
 
Probably because the IMF bailout is one part of the overall bailout we are getting. Europe\ECB also providing huge funds so they don't have a remit to make such wide changes?
 
Hi Teatime

I agree that we need to make much deeper cuts.

The 4 Year Plan already had deep cuts in them and that is why I suspect that the IMF didn't impose any new cuts. They were approving our existing plan.

In other countries, they probably had not made the cuts and then blamed the IMF for imposing them.

Brendan
 
I expected the IMF to come in and eliminate waste all round us and take a big chunk out of the budget deficit. But no, we're still borrowing millions every day and making our basket case of a country even worse in the long run.

Are they blind?

The IMF are not here to clean up our act , they are here to balance the books.

Who do you think caused the increases in tax / USC recently. We have not even reached the first quarterly review, give them time.

http://www.merrionstreet.ie/wp-content/uploads/2010/12/EUIMFmemo.pdf
 
wait and see...guys

i was in Latvia the time the IMF came in.all seemed to be going well but 6 months into the loan facility the axe fell.1 in 3 hospitals closed, public pay was cut by 30%,AND 32% of teachers lost their jobs.this had to be done or else the money would be withdrawn.remember the quarterly reviews have to be done 16 times over the next 4 years so it can happen in an instant.considering the starting pay for teachers is 39k in ireland it could be even worse than what happened in lativa.oh one more thing the IMF are the realists,the eu mechanism is delaying what we all know is going to happen anyway.
 
Hi Teatime

I agree that we need to make much deeper cuts.


Brendan

I hear a lot of people say this, and I genuinely don't understand the argument. Before the arrival of the IMF, I saw the rationale for it, and it made sense to cut deeper as we struggled to get market lenders to keep faith with us. Now, we have a four-year funding package and our funders have declared themselves happy with our proposed cuts. So why do some people want to cut ever deeper still? Cuts-overkill can hugely damage an economy.... the IMF/EU (who are risking billions on our plan) have clearly decided that we are near the limit of what can be achieved. Trying to impress them further, and cut deeper, just sounds ideological to me... (I'm not ideologically opposed to cuts, BTW.... I am just wary of the damage that cutting too much, for no apprent reason, will cause)
 
+1 What RIAD BSC has posted.

What rationale is being followed by those who continue to advocate cuts?
You cannot cut your way out of a recession.
You cannot continue to make cuts without causing severe structural damage to an economy.
Jobeless improvements for the balance of payments figures do nothing for the indigenous economy.

The reason we are still in the mess we are in without a real recovery is because our main banks will not lend because they cannot.
Oddly enough one or two of the smaller banks are starting to lend again.
Perhaps they have realised that after two/three years of "taking it" we are all still here, still persisting and "we're not going away, y'know".
People are tired of leaving Ireland - they want to stay here, rear their children here, build this country up again to be one of the best in the world.

We cannot do this by more cuts!!!

We need to grow our economy and our jobs and skills base.
We need to NOT specialise solely in high-tech and smart jobs.
DO those too, but develop a broad-based economy.
In other words, not the Greens blinkered approach.

Otherwise, if we're not producing the goods we require cost-efficiently, and sustainably close to home, we'll be at the mercy of price hikes by those we depend to sell to us .
They in turn will get their chains yanked by the supply chain costs - typically the cost of oil.

Sustainability and competitiveness must be our watchwords, but you can forget about more cuts Brendan, unless you like making people suffer needlessly.
The only people I want to see suffer, and not needlessly, are the people who authored this mess - like the estate agents who talked up the boom and the chairmen of the banks who so badly served their shareholders and in turn the banks' customers.

It is not good enough for politicians to say - "but you put us in to keep the party rolling" - that is mere sophistry, a method by which they seek to disavow both their responsibilities and accountability by blaming the people who put their trust in them.
Because make no mistake, this mess rests on trust and competence - too much of the former on the part of the electorate, and too little of the latter on the part of the politicians and their endless ranks fo "consultants" and "advisors" - more unaccountable faceless drones.
As politicians they had and have a duty to steer the ship of state according to the weather and best charts available, not where some of the passengers might want the captain to take them disregarding storm warnings.
In that latter regard the Vanity Fair piece showing the reception Morgan Kelly's warnings got in the press and the establishment should cause the lot of them to hang their heads in shame. 4th estate indeed!

With the IMF looking over our shoulders, the gombeen men who ran Irish finance into the ground will have to shape up - proper order if you want to avoid corruption in the land of the mega rich who have little or no accountability.
I only wish the IMF had come in sooner, but you can forget about more swinging cuts or "Indah" might be one of the shortest lived Taoisigh in the history of the state...

Growth not cuts!

ONQ.
 
I agree with most of the above, but the budget deficit must be cut.

Of course nobody likes doing it, of course there must be widespread pain, but the fiscal deficit must be cut.

How you cut it is open to debate.................the mix between tax increases and public exp cuts is open to debate.


But it must fall from over 10% of GDP towards zero.

Any political party who says otherwise is loo-la.
 

Much of the above is true, but the fiscal defict must be cut. Are you suggesting we leave it at 15bn+, over 10% of GDP?
 
I strongly suggesting that we cannot approach dealing with a recession through CUTS!

We need to grow the indigenous economy, create jobs and get the multiplier effect working for us rather than against us.
Why do I seem to be the only one advocating this policy of growth promotion - its the obvious way to go, yet no-one is interested!
And we need to invite a lending bank to come in here an satisfy our economic needs, apply whatever stringent tests are requried to lend - that's a given - but lets get this show on the road again.

And before we make any more cuts, we need some government minister to have a serious talk with retailers.
I saw a "bargain" for sweeties the other day a fiver for two bags. I did a double take. €2.50 a bag is supposed to be a bargain?
Ridiculous!

And that's just typical of prices around at the moment.
How are we supposed to accept getting cut again when costs are still so high?
Someone needs to expose the unconscionably high retail prices we are expected to pay. We are being fleeced.

ONQ.
 


BUT, the fiscal deficit also has to fall!!!!!
 

Actually only half that........


http://blogs.wsj.com/brussels/2011/02/14/irelands-half-bailout/
 

This is completely wrong. The only way you can get out of a recession (or depression at this stage) is by cutting government spending. Every penny that government spends has to be taken out of the very economy that you are saying needs to grow. And you cannot promote growth by taking money out of the economy.
Anybody serious about promoting growth in the private/productive sector has to start with less government burdens on private enterprises. And that means less and not more taxation.
Plugging the budget deficit with borrowing and increased taxation is having exactly the opposite effect!!!
 
Cutting Govt expenditure is not just the only way to get out of a recession. You also have to create the conditions that will support domestic growth.Unless you have a vibrant domestic economy you are on the road to anarchy.With the current level of cuts, there are a huge no. of workers who are very close to the breadline.You will also have to reduce public service costs.Things like ever-increasing local authority charges,hse charges, GP charges, legal charges will have to drop in the region of minimum 30% to make them affordable. The next Gov will include one James O'Reilly who has great plans to cut down the HSE. He was the sole reason we pay huge salaries to Consultants as he played hardball with the DOH & DOF in the late 90s as Sec Gen of the IMO. Now a 20 min consultation with a Consultant will set you back €120 to €150. Crazy charges such as these will have to be dramatically reduced. All this is within the remit of the incoming Gov. if they have the will to do so.
 
In an attempt to get back on topic. I wonder how much of a disappointment the IMF are to the Greeks.
 
You cannot cut your way out of a recession.
In the late 70s and most of the 80s we spent our way to financial ruin and recession. Then we cut fairly savagely and soon after, during the 90s, a period of real economic and productivity growth started. The same happened earlier in the early 80s in the UK. Bill Clinton, despite his beatification by "the left" imposed severe welfare cuts which preceded years of impressive productivity growth. Even the most important of the few examples which Keynesianism uses as evidence - the New Deal - was tempered by an overriding desire to maintain a balanced budget.

Ireland continuing to borrow almost double the entire income tax take every year will lead to economic Armageddon.

Thankfully most of the globally influential voices who, in 08 and 09 called for a Keynesian response to the financial crisis, have changed their tune. Debt is now viewed as the most critical issue facing western economies. And thus more government borrowing to support spending is simply throwing petrol on the fire, to use a cliche.
 
the reasons for high retail charges are costs costs costs.for examle my rates for my small business have increased from 4k to 11 k in 2 years.i am at my wits end.i have cut everything to the bone but yet they still want more .inability to pay to them means bringing me to court.33 million was spent to house clare council staff in their new building.u and i are paying for it through their obscene charges.the 22 staff in planning are siting playing internet poker everyday.being paid.4 billion is the deficit in local government coffers.thats irish government for u.cut cut cut and then we might have some chance out of this econmic quagmire.
 
Trouble is, politicians are a group of people who like to spend other people's money. They don't like to do other stuff.