I've been afraid of this topic rearing its head! Only coz i don't really understand anything to do with economics or money or business. I'm afraid i'll sound clueless. Anyway, it looks to me like Ireland is being forced to take money from the EU - not because they care about us - but because they want to ease market fears over the euro currency. Ulterior motives, and apparently at a very high cost to us...will they insist we raise our Corporation Tax? They've been dying to raise it for years. And if that happens our major incentive for attracting overseas business will disappear. I knew we shouldn't have got too involved in the EU! Edit: all the above suggests i blame the EU for our current problems. Of course i don't! The way the Common Market/Euro works means our economy is no longer independent so our woes affect others. And the EU will use our current troubles for their own ends. Obviously the main blame of what has transpired lies squarely at the feet of Fianna Fáil and the way they, as main government party for the past 15 years, have allowed our prosperity spiral out of control leading to this massive and crushing fall. The way they are clinging onto power, in brazen defiance of democracy (by-elections anyone?), is sickening.
I think the EU has no option but to intercede as otherwise the markets will refuse to lend to Ireland and this would have a serious impact on the stability of the euro. If the euro fails - the European experiment fails with devastating cost. We could all lose everything. There is no point complaining about Ireland's membership of the EU at this point - we should be grateful some organisation is available to try and sort out the mess. My main concern is that FF will attempt to blame the IMF/ECB for the cuts that HAVE to be made - they had no problem blaming Lehmann Brothers for the initial collapse. I think FF are trying to make it look like they are playing hardball with Europe to preserve their delusion of being in control, when Europe imposes cuts -FF will then blame them. The sad thing is given the level of tribal party loyalty in this country the FF base will 'believe' them. We need to reform the republic and the impetus has to come from the people as the Political Parties sure as shite arn't leading the charge for any significant reforms - I recently read the Labour Party's policy document for the reform of government - long on aspirations short on details. Perhaps Europe will insist on reform...it may be our only hope.
While I agree to some degree with your comments here, I think we mustn't forget it was the people running the Banks who were reckless and lied to the government about the real state of their finances. Not only did the lie and lie, but the effectively blackmailed the government into rash judgement re the survival of the banks. Poor Dev must be turning in his grave!
Which they have convinced themselves is a land powered by renewable sources, lit by energy saving lightbulbs, everybody cycles everywhere, grows their own food and makes their own clothes from start to finish.
So the Government have gone from "we have our debts funded to mid 2011" to "ah thats a great plan we'll take the money cheers". I'm baffled by this Government at the best of times. Our low corporate tax will be demolished after this making any attempts to bring businesses into the country very hard, much to the delight of France and Germany who've been wanting us to raise it to "normal" EU level for years. The raising of the Corporate Tax will set the country back decades in terms of economic growth. This is something Biffo and the lads need to play hardball with but we all know they won't.
I am wary of multinationals as the main means of funding our economy - I think we need to invest in native firms otherwise we run the risk of the multinationals pulling out when it suits them regardless of our corporate tax rate. Look at Ford,Dell etc - it took Cork a long time to recover from Ford's withdrawal and Dell's move to Poland has devastated Limerick. We have a very high cost of living which leads to the need for high wages . The government are looking to lower the wage cost without a concurrent fall in the cost of living (e.g. 5% increase in electricity is a government initiative). Our high streets are becoming indistinguishable from any English high street while the likes of Zara, GAP, Debenhams, Marks are charging more for their products then we would pay in the UK. I remember them claiming this was due to the cost of shipping -yet they charge UK prices in NI. They can justify the extra costs due to higher overheads here and their profits are leaving the country. We need to invest in our own economy and insure what little money there is in circulation remains here - not leaving to pay the shareholders in multinationals be they manufacturing or retail.
I see all the large corporates are quietly withdrawing their funds from the main Irish Banks over the last few weeks! Private individuals such as ourselves, will be the last people to be told if your Bank is going bust. I have withdrawn my savings and bought silver. The Banks are shit and cannot be trusted anymore to look after our money deposits. Teri_Rose
I've been thinking about how we could lower the cost of living - one way would be dealing with the amount of indirect taxation - mainly VAT. We have a very high VAT rate which pushed the cost of commodities up resulting in a chain reaction where people need a higher income to afford food, clothes, fuel etc. I reckon cut the VAT rate by 50% across the board - yes, this would lessen the amount the exchequer takes in BUT it would encourage people to spend and get the retail sector moving - meaning more VAT paid albeit at the lesser rate plus (hopefully) an increase in employment and therefore an increase in income tax plus a growing sense of job security (one of the reasons people are not spending is they fear for their jobs so are building up a fund to support themselves in the even of unemployment).
