Sunday, December 5, 2010

Economics 5/12/10: Default, debt and 'Rescue of Ireland' deal

Today's Sunday Independent article on inevitability of default, with comprehensive figures on the impact of the IMF/ECB/EU deal for ordinary Irish households and the levels of our indebtedness. Link here.


Georg R. Baumann said...

Constantin said:
The real tragedy of last week's 'rescue' package for Ireland is that by forcing on to our shoulders the entire burden of banking sector debts, the troika has virtually assured the destruction of the very fabric of this economy that represents the only hope for our recovery.

The Ueber-Civil-Servant Jean Claude Trichet will be honored with the International Charlemagne Prize in Aachen, the ʻKarls Preisʼ, for his achievements towards Europe. You could not make it up!

The Charlemagne Prize was awarded since 1950, some recipients:
1969: The European Commission
1999: Tony Blair
2002: The EURO
2008: Angela Merkel
2011: J.C. Trichet

kencc said...

Probably I'm not thinking straight but I find it difficult to understand why the all of the ECB/EU/IMF package should add to the total private plus Exchequer debt of 430bn to result in a total of 497bn. Then further add another sum to underwrite bank bondholders in future resulting in a total of 560bn. Although overall debt will increase to cover budget deficits, simplistically I would have thought that, as and when private debtors become bankrupt, then the debt amount would be deducted from the private debt total and added to the Exchequer debt total with no increase in the overall total, i.e. simplistically, the overall total would be 430bn plus budget deficits for funding normal Govt business.