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ORGANISATIONS REPRESENTING Irish businesses and financial institutions have welcomed the deal announced yesterday by Taoiseach Enda Kenny on the IBRC promissory note.
In the Dáil yesterday, Kenny said the promissory notes, which would have totalled almost €48 billion in lifetime costs, are gone. The first payment on the now government bonds will be due in 2038 with the final payment being made in 2053.
IBEC, the group representing Irish business, said the deal was “better than expected” and that it will allow growth and inflation to reduce the real cost of servicing this debt over time.
“This deal will help give consumers and businesses the confidence to plan and invest for the future, and will have a positive effect on jobs and the economy,” Cheif Executive Danny McCoy said.
While Chambers Ireland joined IBEC in its view that the deal would rebuild investor and consumer confidence, it said that Croke park negotiations should now be the government’s top priority.
The Irish Hotels Federation said it expects to see a boost in consumers’ ability to spend in the local economy, which will also have an impact on tourism.
Ireland’s position in the financial markets also appears stronger with Danske Bank Markets saying it expects to see “very strong positive comments from the international ratings agencies and would see significant upside ratings potential from Moody’s in particular”.
While most TDs embraced the announcement, many in opposition criticised the deal which they said would increase the cost of the bailout and will see young people paying the debt back for generations.
Yesterday Sinn Féin President Gerry Adams said: “The fact is that any young person lucky enough to get a job in the economy today will be paying this debt for their entire working life.”
“Today Fine Gael and Labour turned a €28 billion promissory note into a sovereign debt for the state which could reach up to €60 billion,” he added. “The government’s approach will tie this bad debt to citizens for decades to come – our children and grandchildren will have to pay billions.”
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Financial institutions welcome a deal that copper-fastens the socialisation of the losses of financial institutions. Forgive me for not jumping up and down with excitement.
Indeed,………….. a similar headline would read. ” murderers welcome deal to reduce mandatory sentences for murdererers”. Well, they haven’t won back my vote, that’s for certain.
Next all night discussion….
Topic: Past, present and future pay packages of political officials.
How to reduce political official’s salary, benefits and pensions to reasonable level that befits the size of our country, the wealth of our country, the international realtive responsibilities, and GDP.
The ordinary people will still face more austerity in the next two budgets at least. Then they have property taxes and water charges to deal with. It therefore changes nothing for them. Telling people that because of this deal, cuts will be less severe is little consolation. Businesses can make long term plans, but a person with nothing doesn’t have that luxury.
@ Marlon, another astute and insightful comment.
But was not the deal simply a way of ensuring the preservation of enough public expenditure capacity to pay these magnificent salaries and munificent pensions. It is life for today and foist most of the liability on to the next generation which will be more poorly paid generation. I can’t afford to pay you but in 2038 and after, my son and daughter will pay you back.
The generation of which I am a member too a lot and have left our debts to the next generations.
Why would the next generations rationally wish to stay in Ireland if they are able to make a future outside of Ireland.
It is the moral quality of the deal which offends me and this morning I see stories of 20 billion saved! Stuff and nonsense from a delusional people ruled or governed by grand illusionists. I despair
Exactly! Well said.
That was directed @ Rodrigo.
Peter and Ridrigo I agree whole heartedly.
Furtermore, I’m amazed that our lenders aren’t outraged at how our political and government officials compensate themselves…
I know for a fact… I wouldn’t give a penny! If I saw a begger on Ha’ Penny Bridge dressed in shiney sharp runners, nice new jeans, a warm jumper and slick cool leather coat with an empty Starbucks Cup asking for spare change.
I am no fan of our political class. And definitely don’t agree with how they’re runnning our budgets.
But am I the only one who has no major problem with what they are paid?
They invest huge effort and money and time into getting elected, they work all the time. They have to pretend to like b*llshit local issues just to get elected. They have to get destroyed every day by basically half the people they meet in the streets no matter what side of the fence they are on.
Whoever says they should be doing it for love of the country, sure charities aren’t run for love of the charity, they’re run by high paid competent people. And those jobs have a lot less negatives involved. If I was to do their job, and do it well, I’d want to be paid a fair amount.
Now entitlements, the way they get pensions while in office and when they’re so young. Fair enough. But their pay seems fair to me…
Hi Conor,
I agree with you to some degree. Our Political Officials do work hard, do have a difficult position and are always disliked by someone.
Their pay is at par with American Federal Politicians (President, VP and Secretary), German Prime Minister and British Prime Minister. I would argue that our international influence isn’t as strong at this time. This is not to say that Ireland couldn’t be an International Power House… But we are not there yet.
So I would suggest that, when our politicians weld international influence like the American President, British Prime Minister and German Prime Minster, then they should be compensated accordingly.
Additionally, how many jobs do you know of that people get such large benefits for on the job training?
Finally…. We can’t afford it.
I still don’t know if this is a good or a bad thing… I guess time will tell
I really think this is the best we could get out of an impossible situation.
No payments on the principal sum for 30+ years, by which time inflation will have taken a massive chunk out of it.
Seem a good enough deal to me
Brave prediction at a time when some experts are predicting protracted deflation. I suppose that we can tell ourselves that inflation will devalue the repayment and salve our consciences about what we have done to the next generation. Already we know that they will not be paid as well as this generation was.
I am over 60. For me it is mildly good news but we have mortgaged our birth right and shunted this liability on to the future generation, having caused the problem in the first place by having a Regulator which was a lap dog not a watch dog.
Fine bunch we are.
The significant number for Irelands fiscal finances and our national economy is the revised interest rate.
There is a net annual saving of €1 billion per annum. This takes some pressure of the adjustments required for the next three budgets. Secondly the pressure is of the near term PSBR. This will facilitate an earlier return to the bond markets and an exit from the bail out mechanism. Finally, the monies due under the new bond can, if circumstances require be pushed out to infinity. The Government may, if circumstances dictate, issue new bonds to meet the maturity of the one just created.
All in all an excellent start to restructuring and regaining control over our finances. Now for the other bank debt. Next step…..ESFM.
Cliff
While inflation will erode the value of the debt any economic growth will also reduce the real cost of repaying the sum. Combined, the debt will become insignificant over such a long period.
It is interesting to note that Sinn Fein either don’t understand this concept or are lying in all of their public posturing of the past twenty four hours.
Are we surprised?
I can’t see how the hotel federation believes this will encourage people to spend more.The agreement might see overall less than expected being taken from peoples pocket in the next budget,but there is no plan to give back anything.
Does it encourage them to spend less?
David sorry now but thats a stupid comment.There is several more austerity budgets to come maybe not as harsh but there still coming.An agreement was reached but lets stop the spinning before we all get dizzy.The country is debt to the tune now of 167 billion with a further 30+ billion of private and household debt.
It’s about confidence Norman. There are people out there who could spend but haven’t because of uncertainty. Confidence for the domestic market is the lifeblood. This will help…
O Reilly it might encourage those that have money, but those same people had money on Monday and they know even with this agreement they will be paying alot more late this year and next year in property taxes and water taxes.That hasn’t changed.
BTW has anyone in government adressed the 1 billion we will save and the Trioka veiws as a “windfall” to be applied to the natiobal debt?
Really, O’Reilly! Do you like paying debts of private corrupt institutions, If so? You might like to pay my debts, If I get a good arrangement on them. If not, stop cheerleading this deal like it was our debt and incurred by us! The budgets won’t change, but protests and strikes will increase from now on!
It is all about confidence lads.
Because without that the trick won’t work!
Stephen
Our Democracy has spoken and the deal is done ! Anything of the nature you’re talking about , such as protests and strikes are likely to disrupt the economy and cause a worsening of the States position.
What’s your end game Stephen?
Is this all to advance the Hard Left and make yourself feel important? Or is this the only way that you see yourself and your pals being able to express yourselves?
This whole thing seems like a confidence trick.
The main thing we the Irish people fully expect of this government is that the €1 bn in savings will directly benefit us and not go into the black hole. This whole deal is another kick the can down the road exercise as there hasn’t been any debt write down
How on earth can we spend more….when we have sod all left at the end of the week…..??
Triona
Try cutting down on your use of the Internet or mobile phone.
The neo-cons don’t view it that way. They see the “peasants” having an obligation to socialize their corporate debts. Hence why the business class support this deal – they are voters for Fine Gael. Enough said.
They’re not neo-cons they’re mo-rons. How could a conservative support the state propping up bad businesses with public funds? It goes totally against the basics of liberal economic thinking!
hi richard maybe u could cut out internet all together and do us all a favor
Just heard Gilmore enjoying his easy ride on RTE 1. We deserve everything we get. Our journalists are cowards, are politicians are drunken criminals who have now put the lid on the greatest fraud ever inflicted upon an economy.
The Irish collectively are sheep.
Your complaining RTE gave a government minister an easy time,your shocked?
When the agreement was before the Dail what was RTE showing? it was left to TV3 and they don’t even get a euro from our tv licence.
Not shocked, just in a state of perpetual disgust. As a commentator Vincent Browne appears very much on his own and try as I might I just can’t for the life of me reconcile with the Irish medias generalized acceptance of what they perceive on our behalf as a deal.
It’s not a deal, they swapped a promissory note for sovereign debt. It beggars belief that a great majority of our so called intellectuals endorse what our drunken elected representatives rammed through the Dail.
Our journalists historically have and continue to endorse this maniacal approach to the management of our children’s heritage. I think that in itself is a crime for which a price must eventually be paid. It’s just that we as a people consistently end up paying for it in full, on their behalf.
The top 5% have filled their pockets yet again and the Irish media is there once more to help finish the job.
Not shocked. I’m livid, disgusted, appalled and pissed off enough to wish a plague of the most insidious kind on all their houses. They certainly visited one upon mine.
I love the analogy the government keep using to justify the deal as if we were children;
“If you borrow a 100 euro now would you want to pay it back next week or in 30 years” etc to explain the inflation aspect..
They are wrong by the second word “you”..
The reality is;
I didn’t borrow the 100 euro, someone else did and put it on a horse and lost but still want paying.. so No, not next week or 100 years!
All that said it does buy us more time until a new government with guts can find some way of turning this over..
I know I know soverign bond, but anything is possible.
According the newspaper summaries on the radio this morning, they all say it’s a good thing. I guess all the editors are in on the conspiracy as well.
Or they’re all right
If your being selective in what you read your correct,try the FT if you want some objectivety.
Just seen them Paul.
Only the mail going with a negative slant.
The rest seem to think our debt is “gone”.
#gone!Juslikdat!
Course they would, wouldn’t they. Hardly gonna come out and say “ah Jebus that’s a bit rubbish isn’t it”
The picture is kinda funny, – it’s like two foxes congratulating each other, after taking over the henhouse…
Bailed out by taxpayers, of course these businesses are delighted. It’s not our debt, we shouldn’t be paying this!
Those are such great faces for political caricature.
Does greed naturally make people ugly?
@Seamus; only when combined with the intellectual capacity of a dung beetle and the imagination of an amoeba.
Pats on the back and smiles all round for getting a ‘deal’ on a debt that none of us incurred??? I’m kinda confused. Everyone is saying this is great for Ireland and has changed the economic landscape, but hang on…we’re still going to have to pay a ‘progressive’ property tax, progressive water charges (which collectively may be up to €800+ p/a and that’s being optimistic), increased tax for every other service/insurance, police and front line services being slashed and further harsh budgets which have to cut 2 billion. The way our politicians are acting and posing for photos is very poor tastes considering they’ve really achieved nothing in the grand scheme of things!
IT WASN’T OUR DEBT-it would have been a good deal if it was done for our sovereign debt ,if it had been money borrowed to run the country but it wasn’t! It was money lent by speculators who as it was a failed gamble didn’t expect it back..its an injustice on the Irish people-and as our own politicians cannot b trusted-the old cute hoor still alive and well- one would expect some semblance of honesty from Europe ,if they want the respect of its members -but no they just ensnare u too .this is a thundering disgrace ,unjust ,and goes to show small countries with idiots as leaders will never progress .
It just clears the decks for the supplementary budget at the end of the year to cover the mortgage arrears problem.
It won’t work in favour of us as they like to call us, the ordinary people, and yet we end up picking up the tab for all mistakes make, God help us is all I can say.
It would appear to be a very good deal. There are those, of course, who will mock any achievement by this government. Their only aim is the promotion of the bunch of clowns called Sinn Fein. Their response is standard and parrot like and basically contains two words ‘can’ and ‘kick’.
This is an example of Blinkered obedience, by brainwashed supporters! If I get good terms arranged on my debts, will you pay them for me?
Sure is alot of interest to pay! How does 28 billion turn into 60 billion in 27-40 years of payments… it’s either 3.6% percent interest or 8.5% interest.. Which is it or is it the same?! Does 40 years at 3.6 % = 32 billion if so Ireland was shafted! This should have been done 2 years ago but is welcome to ease the budgets! There is now going to be industrial unrest with the unions if they touch or cut frontline pay! INMO, GARDA, SIPTU ETC.! 1 BILLION IN CUTS TO PUBLIC SECTOR PAY IS WAY TOO HIGH! Interest for the promissory notes/liquidation process in 1 Billion.. Coincidence??? Dodgy Gov procedures!
Government, Bankers & Big Business welcome the deal.
What more proof do the Irish Citizens need that this “deal” is bad for the individual?
The Shinners are sick because of the successful conclusion to a terrible problem.
@john
Perhaps you cab answer these questions ,
Why didn,t the gov wait until the legal challenge on the p.notes was completed before taking any steps ??????? and if it was found to be illegal , Ireland could tell Europe we don,t actually have to pay
Was it that the ECB knew full well that they where illegal , and upon the treat of exposure via the supreme court , came up with this plan and forced the gov to push it thru without debate , after all they are the winners here,
They lumber us with an illegal debt ,that now cannot be challenged
The coaltion stays in tact, so europes good little buy stays in charge
And Enda,s ego grows,
Do you genuinely believe this plan was in place weeks ago ……..
What exactly was the iminent risk to Anglo ?
WE HAVE BEEN CONNED YET AGAIN
Basically guys you f.cked up, you trusted politicians. I mean hello, like they have EVER kept election promises, in ANY country? Btw do you REALLY think SF will be better? If so why? Whats the evidence? Personally I dont think there is one political party in the dáil I would trust. Some individual politicians yes, but no party. Forget about it, we’re screwed!
Anything but a progressive deal – it was and is a Sham! It’s an elitist takeover. Our quality of life, services and taxes (house/water/…) will suffer even more. We are hitched to a Giant runaway EU train.
Why give our corrupt politicians our votes when their allegiances are swiftly reneged to the growing EuroBeast??
Lisbon, ESM,….we are sovereign sheep.
Sinn Fein’s economic illiteracy continues. All generations pay debts as all western economies are debt-financed. The issue was one of debt sustainability which this agreement improves.
IBEC dont represent Irish business. It represents most businesses, but not all.
have your say