Baling Out The Irish

[edcayton]

Does anyone understand this? Apparently we will lend(although probably not get back) them money to repay debts they can't afford to repay so that they can carry on buying lots of stuff that we make(what do we make?) that they clearly can't afford.

Can anyone explain this in terms that I can understand, 'cos the telly and wireless have failed to do so.

 

Ed

[PhilH]

I don't believe there is any altruism in this - I would bet a whole 10p that the government has decided it's cheaper for the UK to do this rather than let them go under when we would lose even more money in lost trade etc.

[Andy Y]

Phil's on the money.

 

If the Irish economy suffers too much more jobs in Northern Ireland could be affected in particular. If their banks get deeper in the mire it will spread more ripples through our (and the rest of Europe's) banking system. If the UK, EU and IMF did nothing the potential drag on recovery could be more damaging than the bail-out.

 

Let's keep the topic as apolitical as possible please.

[BoD]

I'll do my bit by having a couple of Bushmills

 

(I never was any good at geography).

[oggy1953]

I thought we as a country were skint, hence the cuts. So where has this few Billion come from ?

[Foulounoux]

We have too many links with Ireland to let it founder

 

 

Hence even though we havnt got the money letting Ireland founder would cost us more

 

Not only the commercial banks RBS et al having big links to Irish banks but also the Post Office card account is run by an Irish bank.

 

I believe that whatever we lend to Ireland is safe - we have enough assets we can seize if necessary

 

In effect for us Ireland is a special case but should we bail out the next 3 to fail - Portugal,Spain,Italy then that would be a different matter

 

But as part of the IMF we will inevitably pay our share for a problem caused by a scheme (euro) we are not part of.

Interesting that the likes of Nissans CEO who banged on for years as to us being in the euro has become rather quiet of late

I also have heard that contrary to the impression given the UK also contributes to part of the EU fund.

 

I have always believed that a better way would have been first a common currency that would have given countries the flexibility to deal with differing situations and then once the issue shad been identified countries could have elected to go to a single currency.

 

 

 

Colin

[Ozexpatriate]

Does anyone understand this?

 

Ed

Ed, I ask only because you initiated the "Speeling, punct'uation and handwriting" thread, I presume you mean: "Bailing out the Irish"?

 

Though I suppose you could mean to imply (or is it infer , someone will surely tell me) that they are sinking, in which case a good "baling out" would be eminently suitable.

[Leicester Thumper]

Ed, I ask only because you initiated the "Speeling, punct'uation and handwrititng" thread, I presume you mean: "Bailing out the Irish"?

 

Though I suppose you could mean to imply (or is it infer , someone will surely tell me) that they are sinking, in which case a good "baling out" would be eminently suitable.

 

After all the place is an Island surrounded by water, so in a geographically logical sense.... yeah you could get away with a country 'sinking'

[Tony_S]

... but also the Post Office card account is run by an Irish bank.

 

About a month ago I had a letter from the Post Office that they were transferring the card (in my case a pre-loaded $ card) that was managed with an Irish Bank to a UK bank.

[RhBBob]

There are certainly a few fascinating facts about banking history between the UK and Ireland.

 

The introduction of the Punt (fore-runner of the Euro) was largely ignored by the population for the first few years of it's life; indeed it was possible for some years after to initiate a Bank Giro Credit from Ireland to the UK , despite the exchange rate and the two different currencies. It may still be possible, for all I know - I retired from the Black Donkey many years ago. Many of the Irish simply didn't believe that they had a separate currency ....and some thought I was joking about the name.

 

The year-long strike of Irish Banks, back in 19?? was a real humdinger where thousands lost thousands more when the system returned to 'normal'.

 

The retail monetary activities are better known - the cross-border purchasing of vehicle fuel and other commodities, dependant upon tax rates and prices.

 

Yes, our only land barrier with another sovereign state produces much amusement. And a Mr G. Adams wants to move down there

 

Bob

[APOLLO]

Well I have done my bit for Ireland today. Bought 4 boxes of Guinness (for Xmas !!) from Asda, 2 boxes of 10 for £15 (40 cans for £30)

 

Really the whole banking affair, worldwide is a sick joke.

 

Quite simply, we the west don't make much of anything anymore, (model trains included) - all (or at least far, far too much) production, and hence wealth, is in the far East. Our biggest asset bubble (housing) has just burst. No wonder the west is broke. I can't see any ways out, either.

 

God help us when peak oil kicks in, petrol gas and electricity barely affordable now !!

 

Sod it, I'll crack open a Guinness !!

 

Cheers, Brit15

[Guest Max Stafford]

Phil's assessment is pretty spot on as UK-Eire trade is a really big part of our own economic portfolio.

 

As a commentator on R4 noted this morning though, there is also a strong emotional connection when you think of the huge numbers of British people with ancestral Irish connections. One half of my mother's family were Irish immigrants who came to Scotland in the mid 19th century and my dad's mother was from the north.

 

I'd wager an awful lot of us on here have connections of that nature and although that has precious little to do with economics, don't underestimate the influence it has on the debate.

 

Dave.

[57xx]

About a month ago I had a letter from the Post Office that they were transferring the card (in my case a pre-loaded $ card) that was managed with an Irish Bank to a UK bank.

Good job you reminded me about that, I was about to go on a spending splurge for bike parts from the US (my PO card has no charge for foreign currency transactions) in the hope I wouldn't have to repay it.

 

 

 

[porkie]

I thought we as a country were skint, hence the cuts. So where has this few Billion come from ?

 

Well said oggy.......

[Oldddudders]

Many years ago a friend, sadly now long-departed, had an Irish newspaper headline which read

 

"Sinking Punt Threatens Economy"

 

To many of us, a punt is a rather simple type of boat......

[skipepsi]

As I understand it the Irish goverment decided not to let any of their banks go broke so they have propped them up at a cost they now realise they can not continue with. A small contribution from Britain is intended to make sure British banks like RBS don't lose the billions they have invested in Irish banks. To put it in numbers our goverment is lending the Irish goverment about £7 billion whereas the Irish banks owe RBS £88 billion

[Guest Dutch_Master]

But as part of the IMF we will inevitably pay our share for a problem caused by a scheme (euro) we are not part of.

Well, that's quite obvious yes. Because if you were, you'd have known that it's not the Euro at fault, it's the politicians who are to blame that the currency is now so weak. If the politicians back in 2000 (or even earlier) hadn't deliberately wanted to include, at not matter what cost, several southern European countries who's finances back then, and for a long time before and after that, were known to be 'dodgy' at best, the Euro would be strong and a refuge for all those seeking relief from the USD, GBP and some Asian currencies. Incidentally, most Euro-zone countries who are jeopardising the currency are also net-receivers of EU subsidies... I have great difficulty believing the two are not related, by any stretch of imagination...

[34theletterbetweenB&D]

...Quite simply, we the west don't make much of anything anymore, (model trains included) - all (or at least far, far too much) production, and hence wealth, is in the far East. Our biggest asset bubble (housing) has just burst. No wonder the west is broke. I can't see any ways out, either...

Actually the west makes a huge and diverse range of goods and services, not so much of the banging bits of metal into shape nowadays, more of the rather intangible activity that goes on in offices, that includes provision of a significantly easier way of life that most of the rest of the world would like to have too. Two hundred years ago, the miracle of industrialisation propelled the west from largely agrarian labour camp to global economic dominance. But this is a dynamic process and it is the turn of other people to bang the metal about and raise their economic prosperity. Eventually the whole world looks like the west does now - manufacturing is becoming ever more efficient and will hardly be visible in the mature state - most people will work in offices doing less tangible stuff which somehow makes prosperity.

 

That's not to say that the going will always be easy. Unfortunately, nobody actually knows how to manage the total process, there are significant areas of guesswork. For all the highly trained economists employed by governments and banks, the situation is clearly not in control, and it is uncomfortable. But it is a whole lot better than sending in a group of heavies to steal someone else's livelihood to better our own lot. As for the Irish, who (in global economic terms) are our cousins living in the detached house next door, this sort of loan (barely enough to support 50,000 civil servants for a year) is a symbolic vote of confidence. Helping out a neighbour who is temporarily in real trouble, even when your own state isn't too clever, is what friends do.

[Horsetan]

Ed, I ask only because you initiated the "Speeling, punct'uation and handwriting" thread, I presume you mean: "Bailing out the Irish"?

 

Though I suppose you could mean to imply (or is it infer , someone will surely tell me) that they are sinking, in which case a good "baling out" would be eminently suitable.

 

....or given that Ireland still has a substantial agricultural economy, "baling" (as in hay bales, etc.) would be appropriate!

[Edwin_m]

Advice for the Irish Gov't:

 

If I were you, I wouldn't start from here.

[Ozexpatriate]

....or given that Ireland still has a substantial agricultural economy, "baling" (as in hay bales, etc.) would be appropriate!

Yes ...

 

Balefully we bale out the punt, heavily laden with bales, while the bailif waits for us to bail out our cousins before a dire bale is wreaked upon them in their financial torment and bale.

 

And that's not even using the obsolete definitions. See bale. (By the way, do people in Britain use jail yet, or is it still gaol? Reply here, lest you hijack this thread.)

[Guest Max Stafford]

OK another analogy. You live in a semi-detached house. Your neighbour's is on fire.

Is it in your interests to help him fight the fire...?

 

Dave.

[Ohmisterporter]

OK another analogy. You live in a semi-detached house. Your neighbour's is on fire.

Is it in your interests to help him fight the fire...?

 

Dave.

 

The analogy used by President Rooseveldt at the time of Lend-lease. Put out the fire now, pay me for the hose later.

 

As far as I can make out we (UK) are borrowing the money to lend to Ireland because we have a better credit rating than them. They will pay us back when things improve over there. That's if they don't put it all on an Irish outsider in the Cheltenham Gold Cup.

 

Geoff.

[edcayton]

 

 

As a commentator on R4 noted this morning though, there is also a strong emotional connection when you think of the huge numbers of British people with ancestral Irish connections. One half of my mother's family were Irish immigrants who came to Scotland in the mid 19th century and my dad's mother was from the north.

 

 

 

 

That being the case, I'd expect our US cousins would want to dive in.

 

Ed

[Oldddudders]

That being the case, I'd expect our US cousins would want to dive in.

 

Ed

They certainly did so on an individual basis when it came to supporting a well-known para-military organisation in that island!