The Irish Economy

I was looking at Pat Kenny's " Frontline " Programme last night. It was dealing with the forthcoming budget and the need to achieve dramatic cuts with respect to Government expenditure. As things stand the deficit will be about €20 bl. with revenue set to exceed €60 bl. and tax revenue not much more than €40 bl. So this gross excess of expenditure over income is clearly not sustainable and therefore needs to be controlled. The audience was largely made up of public and private sector workers arranged in two separate groups. However it quickly became apparent that they were simply unable to address the overall financial issue. Everyone seemed completely locked into their own particular perspectives made even more rigid by a perceived sense of injustice with respect to the present situation. Therefore there was no appetite anywhere for either a reduction in Government expenditure or alternatively for further increased taxation (as a means of closing the gap). Based on the...

As I write, more information has been provided by the Government on the proposed NAMA rescue plan. For example we now know that the total value of loans transferred to the Agency will be €77bl. (including €9bl. rolled up in interest). Against an estimated current market value of €47bl., NAMA will be offering €54bl. So on the face of it this would represent a premium to the banks of €7bl. However much of these calculations are very questionable. If we exclude the interest the remaining value of the loans would be €68bl. To then suggest that these loans would have a current market value of €47bl. seems to me far too high. (The Government claims that the actual value of property against which these loans were issued is in fact €88bl. due to developers commiting the remaining €11bl. of their own funds. However I would remain highly sceptical that this actually is the case!) Therefore the true premium in payment to the banks is likely to much higher than €7bl. So as many critics suggested, ...

Here in Ireland we are preparing for a second vote on the Lisbon Treaty and as we are the only country in the EU required to hold a referendum on the issue its outcome may exercise a considerable effect on the overall development of Europe. The background to this Treaty (also referred to as the Reform Treaty) is quite complex. The European Union has been rapidly growing in recent years with 12 new members (from Central and Eastern Europe) joining since 2004. Obviously this poses new difficulties with respect to effective administration. So several changes with respect to key institutions e.g. Council of Europe, the Commission and EU Parliament are proposed. Also it has been deemed timely to now collate and also amend the growing legislation that has been accumulated since the founding of the Union. So in many ways the Reform Treaty is designed to act as a statement of what has already been achieved in the EU whilst providing the framework for effective progress in the future. Sta...