What If Ireland was Declared Bankrupt

J

jpeast

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Hi

With all the doom and gloom going on the tv, radio etc i was just wondering what would be the cost to ordinary people of ireland if the country was declared bankrupt.

After listening and watching things over the last few days my o/h wishes we didn't buy our house few months ago and used the money to emigrate is he wrong??

Would there be a cost to you and me worse than it is now???
 
Just to tag a question onto the OP.

People worry about the safety of deposits if the country does go bankrupt - would the same logic apply to debt? You could lose your deposits, could you also lose your debt?
 
Ireland declaring itself bankrupt would be like a mortgage holder with negative equity here declaring himself bankrupt.The mortgage holder is still liable by law to pay his debts. In Irelands case we may be bankrupt but we can still service our debt, even as that debt increases.Our politicians have made it clear that the bond holders and those that lend money to the state are sacrosant and the burden will be placed on the irish people.
 
It is likely that the IMF would step in before we actually default.

They would take charge of our finances and reduce public service pay and pensions and social welfare payments by around 40%. Our public health system and schools would be slashed. It wouldn't be long before we realised how good they actually were, in retrospect.

There would be a lot of social unrest but we would get over it.

I presume that the the IMF would have to do something about our national debt as well e.g. postponing payments or doing some sort of settlement.

At the moment, the international bond markets charge 4% more for Irish government bonds than German government bonds. This suggests that default is unlikely but more likely than the German's defaulting.
 
Would An post savings be accessible in the event of the country going bankrupt?

thanks
 
It is likely the government would raid them to pay for the politicians perks and expenses and salaries.It is called the pecking order
 
I would doubt it. All bets would be off at that stage.
 
brendan burgess said:
it is likely that the imf would step in before we actually default.

They would take charge of our finances and reduce public service pay and pensions and social welfare payments by around 40%. Our public health system and schools would be slashed. It wouldn't be long before we realised how good they actually were, in retrospect.

There would be a lot of social unrest but we would get over it.

I presume that the the imf would have to do something about our national debt as well e.g. Postponing payments or doing some sort of settlement.

At the moment, the international bond markets charge 4% more for irish government bonds than german government bonds. This suggests that default is unlikely but more likely than the german's defaulting.
Click to expand...

+1
 
Brendan Burgess said:
It is likely that the IMF would step in before we actually default.
Click to expand...

Isn't it the EU really now, some sort of fund they have both put together. The Greek example seems to be the agreed formula. You get gaurunteed funds at 5% but with an austerity package so just a tougher version of what we are doing in conjunction with EU now. It saves the Euro but still trashes the reputation of the country?
 
So Basically for the ordinary person;
1)My Kids will suffer
2)My Parents in retirment will suffer
3)My Friends & Family on the dole will suffer
4)I'll end up paying more taxes.

I can live with 3 & 4 just about, but 1 & 2 especially 1 i'll probably wish we had left.
 
Brendan Burgess said:
It is likely that the IMF would step in before we actually default.

They would take charge of our finances and reduce public service pay and pensions and social welfare payments by around 40%. Our public health system and schools would be slashed. It wouldn't be long before we realised how good they actually were, in retrospect.

There would be a lot of social unrest but we would get over it.

I presume that the the IMF would have to do something about our national debt as well e.g. postponing payments or doing some sort of settlement.

At the moment, the international bond markets charge 4% more for Irish government bonds than German government bonds. This suggests that default is unlikely but more likely than the German's defaulting.
Click to expand...

This would be the chaotic version. But there is the ability for Ireland to approach default proactively. First the budget needs to be balanced, primarily through reducing employment in nonessential services. No need for higher taxes or lower pensions, or disgruntled nurses and guards. Then Ireland can approach debtors and re-organise existing debt with partial default, or to use the politically correct term debt restructuring.
Argentina defaulted in 2001/02 in a relatively organised way and at the time it was declared to be the end for the country. While it certainly was not a cake walk, the country quickly recovered and investment returned.
There is no easy solution to Ireland's debts, but the fact is that they are approaching unmanageable levels, that will have a serious impact on the prosperity of our children and their children. The short term pain of default will be far outweighed by the long term gain of a lower debt burden. It wouldn't be easy, but if you're facing a problem as big as Ireland's debts, the worst thing is to just remain in denial and let things happen.
 
Pope John 11 said:
Are you referring to the postal savings
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Can we please discuss this further? If Ireland 'defaults' or the IMF/EU steps in, what will happen to:

1) deposits in Anglo or INBS, BoI and AIB
2) deposits in An Post (certs & bonds)
3) deposits in NIB, Ulster & other non Irish banks, e.g Rabo. Nationwide, Investec
4) public service pay & jobs?

Slim
 
To answer OPs question, I dont think anyone will declare Ireland bankrupt.
At least it wont happen that way.

Right now, We are heavily dependant on foreign borrowings to finance the very large deficit in our economy. We are also dependant on foreign borrowing to pump billions into the banks. Its quite conceivable that a day will come when our 'country risk' becomes so great that the external money sources will dry up and no one will want to lend Ireland any more money.

When that happens the only source of funding will be either the EU and / or the IMF. We know from the Latvia case and some others that these
lenders of last resort will probably agree to lend us money but with
savage conditions attached. Demands to get public spending under control
as a condition of loans granted will definitely be there.

I dont believe that there is any political party in this country willing to slash public sector spending by the necessary 30%, 40% or 50%. (the Croke Park deal refers!) It will take intervention from the EU or the IMF to sort it out while our political heroes sit on the side lines pointing fingers at each other.

I cant see any other conclusion to this mess...........

By the way I dont believe that intervention by the IMF will mean that
personal bank savings will disappear down some dark hole. I wouldnt panic on that front
 
well in argentina they frooze the citizens accounts and changed all dollars (even if different currency) divided by 3 on top off that they implemented a 30% tax... bottom line dont keep money in irish banks...
 
Brendan Burgess said:
At the moment, the international bond markets charge 4% more for Irish government bonds than German government bonds. This suggests that default is unlikely but more likely than the German's defaulting.
Click to expand...
I am not sure about that Brendan. On a purely mathematical basis it suggests the chances are quite high. 4% over 10 years is 40%. But that assumes 100% loss on default. More likely there would be a restructuring or a reduction and the actual loss would be much less than 100%. This suggests that the markets think the chances of some sort of default in the next 10 years are much higher than 40%, maybe 80%.

Against that, markets are very risk averse at the moment. That means that if they see, say, a 20% chance of loss they may want an 80% premium to compensate for taking the risk.
 
Trichet has made it quite clear that a eurozone country will not default - the solidarity of the EU was emphasised again in his interview in the FT yesterday. the alternative for us is that the IMF come in, and take control of our budgetary process, making massive cuts that no amount of union wailing or street demonstrations will do anything to reverse. It will be a nightmare for all of us.
 
Brendan Burgess said:
Our public health system and schools would be slashed. It wouldn't be long before we realised how good they actually were, in retrospect.
Click to expand...

Is it possible the health budget can be slashed any further? we already have a third world public health system.:(
 
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