StatusIreland

When the government announced their budget, earlier than usual in October 2008, they predicted that we were in for some tough times. A levy here, a cutback there and a prediction that we would need to borrow €4.8 billion to run the country in 2009. Ouch!

The Agency that monitors this borrowing is the National Treasury Managment Agency and about 10 weeks after the budget was announced they have issued their end of year results. They have stated that the €4.8 billion will rise to €13 billion. As a result the national debt now stands at €50.7 billion.

The National Debt/GNP ratio increased from 23.3 per cent at end 2007 to 32.5 per cent at end 2008.

While Ireland’s national debt is still considered fairly stable and manageable the question remains how the government could make a prediction of €4.8 billion only for that figure to balloon so drastically in such a short space of time.

What other predictions and assumptions are they relying on? How will the inevitable gulf between prediction and actual fact impact the nation? Will they be able to sort out the banks? Will they be able to sink the public sector bloat boat? How will the Lisbon treaty be handled, again? How do they help small businesses who are struggling? Is our manufacturing and export sector doomed due to high costs and weakened pound/dollar? What about rising crime rates? What about…. everything?

It’s January 1st and we’re screwed already!

Finance, Jobs, ireland budget, financial crisis, lisbon treaty, National debt, National Treasury Managment Agency, NTMA, public borrowing

Banks will be getting an early Christmas present with the news that the government has announced a €10billion recapitalisation programme.
http://www.rte.ie/business/2008/1214/bank.html
The government hopes to make credit more easily available to “individuals and businesses in the real economy. This initiative will help to foster and encourage the flow of funds to the economy, and limit the impact of financial market difficulties on businesses and individuals. “.

The governments decision may receive a mixed reception from the public, shareholders of credit institutions and businesses but it must be seen as a brave and needed move by a government that has been less than decisive in their dealings to date.

The €10billion will be funded through the National Pensions Reserve Fund or otherwise. On September 30th 2008 the outturn of the National Pensions Reserve Fund was -17.3% since January 1st 2008. The monetary value of the fund stands at €18.7bilion.

Finance, ireland banks, economy, financial crisis, national pension reserve, recapitalisation

Great visual guide illustrating the buildup to the US government bailout. Originally from here

Finance bailout, financial crisis, visual guide