Central Bank assessment of fiscal compact

[Greengoddess]

Ireland will reach a European Union target of achieving a structural budget deficit of 0.5 per cent of gross domestic product in 2020, according to a paper published by the Central Bank today.

The so-called EU fiscal compact budget rule is "relatively more binding in the Irish context than the debt rule," which requires debt in excess of 60 per cent of GDP to be reduced at an average one-twentieth per year, according to the paper by Laura Weymes and Colin Bermingham, economists at the Dublin-based bank.

Ireland would need an annual 3.6 per cent primary budget balance, which excludes debt interest payments, between 2016 and 2020 to reach the structural budget target, they said.

The economists expect that Ireland will be in compliance with the debt rule before it is expected to come into force in 2019.

They aso say that there uncertainty around these projections are high.

An understatement I would think. There is of course, never any comment on the morality of them.

[Captain Con O'Sullivan]

Nice of them to plan how Ireland will pay odious debt into the future. My vote would be that we default towards the end of the tax year in 2015 and start again in 2016.

No better date. We could usefully spend the time between now and 2015 preparing for a structured default.

No one can stop us doing that. It would be a hell of a bargaining chip on the odious debt in itself.

We can be quite open and straightforward about it. Calculate how much crooked banks and bondholders have cost the state and are projected to cost the state and charge the ECB that amount by way of planned structural default in 2015.

[PaddyJoe]

Eight more years of austerity? Well, we're the star pupil in the class so obviously everything is working as designed.

Viviane Reding ‏@VivianeRedingEU
I am impressed by Ireland http://bit.ly/PCQ7mv
https://twitter.com/VivianeRedingEU

[Greengoddess]

This is one of the scariest things I have read recently. Quoted in Krugmans book from Mathew Yglesias

"It’s interesting to try to think about the incentives facing Greek Prime Minister George Papandreou. Normally you would think that a national prime minister’s best option is to try to do the stuff that’s likely to get him re-elected. No matter how bleak the outlook, this is your dominant strategy. But in the era of globalization and EU-ification, I think the leaders of small countries are actually in a somewhat different situation. If you leave office held in high esteem by the Davos set, there are any number of European Commission or IMF or whatnot gigs that you might be eligible for even if you’re absolutely despised by your fellow countrymen. Indeed, in some ways being absolutely despised would be a plus. The ultimate demonstration of solidarity to the “international community” would be to do what the international community wants even in the face of massive resistance from your domestic political constituency.
My guess is that even if Brian Cowen turns out to have permanently destroyed the once-dominant Fianna Fail, he has a promising future on the international circuit talking about the need for “tough choices.”

[Greengoddess]

I notice today that the Tainaiste is saber rattling about the debt. I hope it continues , but I relation to the default suggestion above , if any of us were to say that we would be accused of virtual treason. Look want happened to Keaveney. I would not like my constituents to feel that I was doing that but the rhetoric is inevitable .

[Dr. FIVE]

This is one of the scariest things I have read recently. Quoted in Krugmans book from Mathew Yglesias

"It’s interesting to try to think about the incentives facing Greek Prime Minister George Papandreou. Normally you would think that a national prime minister’s best option is to try to do the stuff that’s likely to get him re-elected. No matter how bleak the outlook, this is your dominant strategy. But in the era of globalization and EU-ification, I think the leaders of small countries are actually in a somewhat different situation. If you leave office held in high esteem by the Davos set, there are any number of European Commission or IMF or whatnot gigs that you might be eligible for even if you’re absolutely despised by your fellow countrymen. Indeed, in some ways being absolutely despised would be a plus. The ultimate demonstration of solidarity to the “international community” would be to do what the international community wants even in the face of massive resistance from your domestic political constituency.
My guess is that even if Brian Cowen turns out to have permanently destroyed the once-dominant Fianna Fail, he has a promising future on the international circuit talking about the need for “tough choices.”

We have a lot of evidence for this.

[Dr. FIVE]

Eight more years of austerity?

better make that fifteen so.