Ireland

[Kinky Melinky]

Well folks, take a photo because I rarely venture into the Current Events forum. As some of you may know I moved from Ireland to London in 2008. I did this for a number of reasons, one of the main ones being that I wanted to get out and make myself in a city less effected by the recession before things got God awful in my homeland.

Expectedly so, Ireland has sank even lower into the mire of financial, economic and political chaos since July 2008.

Living in London I tend not to see just how bad things are back home, but a recent video clip of Alan O'Brien on Monday night's Frontline show barking at host Pat Kenny brought home the sad truth that you lads are going through the shit right now. If it was bad in July 2008 it's even bleaker as we head into Christmas 2009.

Bear in mind I am coming from the layman angle and haven't the foggiest notion about economics and politics. What I do have a grasp on however is the social aspect of all of this. I can see families on the breadline and by God I know what it feels like to not know where tomorrow's meal is going to come from. I can grasp the emotion of rage at our country's leaders despite not knowing where it all went wrong politically. I've noticed an ever increasing number of Irish people turning up at my local boozer in Camberwell fresh off the boat. One such lad is a highly qualified architect who made the move 2 weeks ago to join his brother in London. Others that accompany him are in building, sales, engineering and one of the boys is in the pub game. I reckon that's a pretty good cross section.

So in the opinion of the Irish posters on this website, where do you feel the problem lies and how to you believe a turn around is made possible ?

(I realise these are big questions but there ARE brains on this site believe it or not)

 

[WeasteDevil]

The problem is in my mind the serious mismanagement of the economy on the fiscal level and the joining of the Euro giving your monetary control away. The economy then exploded and there was nothing to control the massive growth and the massive inflation that went with it. Losing 10,000 jobs say in a single factory in the UK isn't a massive problem for a country with the population size that the UK has, hell, the population of Birmingham (or rather the west Midlands) alone is almost the same size, but when you are in a country with the population of Ireland, the economic impact is far larger. You can scale that as you wish.

 

[Kinky Melinky]

Something I was thinking about. Like I say I'm no economist, but lets go backwards; all the way back to the basic human needs.

We need food. We need clothes. We need Shelter and we need healthcare. If anyone can add to the pile of basic human necessities be my guest.

From what I can see in the goods industry you have a chain from origins all the way up to the consumer. The net value worth at origins is going to be considerably different to what the consumer ultimately pays. This is to be expected. As Ireland currently stands however, the net worth of home grown goods at the origins point Vs the price a consumer pays is in stark contrast. This is why it's so fecking expensive when you visit Ireland !

Bearing this in mind and considering that this also stands for the basic necessities, nobody can expect say.......Diagio (to use a common example) to drop their prices so that suppliers can buy cheaper off Diagio and sell to the pub owner at a cheaper rate so that the public can purchase a beer for €3.20 instead of €5.80. The reason being is that Diagio's overheads are too high, and I'm assuming that a large portion of their overheads go to pay their staff.

.....Forgive me if I am off the mark here by the way. This is only a shot at how i am thinking. Like I say, I'm a layman when it comes to this.

You cannot lower staff wages because the basic necessity costs of living are too high. Managing to live in Ireland costs too much money, so wages have to be at a certain level so that a decent standard of living in sustainable.

However, if food, clothing, shelter and health care were at a reasonable price it would be easier for companies like Diagio to justify wage slashes. By slashing wages there is a greater margin for profit thus creating an opportunity to lower their sales prices. The suppliers come in and buy barrels of Guinness for a much lower price and sell it on to the pub for a lower price. It means that even though a publican has dropped his price to €3.20 for a pint he is still making the same % profit, and this profit is enough to sustain himself with the lowered price of basic necessities.

What if every industry sector took on this template. It's never going to work like clock work I realise, but in theory would this actually work ?

 

[Ramshock]

The problem is in my mind the serious mismanagement of the economy on the fiscal level and the joining of the Euro giving your monetary control away. The economy then exploded and there was nothing to control the massive growth and the massive inflation that went with it. Losing 10,000 jobs say in a single factory in the UK isn't a massive problem for a country with the population size that the UK has, hell, the population of Birmingham (or rather the west Midlands) alone is almost the same size, but when you are in a country with the population of Ireland, the economic impact is far larger. You can scale that as you wish.

I always thought one of Irelands biggest problems was a small population, like you say larger populations can absorb a job loss of say 10k. I wonder with a larger and more varied workforce would Ireland be in a better financial footing

 

[Decotron]

An economy based on inflated property prices and the associated taxes.

 

[Kinky Melinky]

In my opinion companies wouldn't be pulling out of Ireland if overheads weren't so high. If Salaries for middle fecking management (given the job to delegate because they've been in a company long enough not to be in an ego bruising role, but they're not good enough to be senior management) weren't up in the 45k - 50k mark and running costs weren't so high maybe companies like Dell wouldn't be letting people off to begin with

 

[Kinky Melinky]

An economy based on inflated property prices and the associated taxes.

But that means nothing to me, and probably a large % of Irish posters on here. If you could I would appreciate it if you explained your sentence in apples and oranges.

One of the reasons I feel Irish people don't stand up in unity is because so many Irish citizens simply do not understand the problem and don't want to appear stupid by asking questions.

 

[nickm]

In the past, you'd have devalued your currency to make your high labour (and other) costs more competitive. (Which is in effect what the UK has done). Now you are in the Euro, you cannot do that.

One of your problems is that you have been, and remain locked into a system that takes no account of Irish economic circumstances. It helped cause an out of control boom on the upside, and now it's helping to cause an economic depression on the downside.

 

[Kinky Melinky]

Sounds like a high grade line of Cocaine

 

[Eyepopper]

A government seemingly incapable of instigating any sort of reform particularly when the public sector and social welfare are accounting for 2/3s of public spending doesn't help either.

 

[utdalltheway]

how does that spending stack up against other countries of similar size?
bear in mind that Ireland doesnt have a big military machine to feed either so maybe that spending is actually in line?

one thing I've always disliked about Ireland though is that cars and expensive goods like that, cost a lot more than in the UK. None of them are made there so it's not the labour costs, so it must be the govmnt duties that drive those costs up. those feckers are on the take big time and it's high time they were brought to account.

 

[Kinky Melinky]

Obviously my initial post is purely based on ideals. Human emotion doesn't come into it, but sadly as we all know human emotion plays a massive part in the reality of all of this; namely greed. It's like what utdalltheway has pointed out. Greedy little fingers in positions of power who for so long weren't made accountable.

You know something, I'd love to know exactly how much money has been stolen from the Irish public since the 1970's. I'd love to see a detailed report accounting amounts and naming names. You can be guaranteed that the people involved not only know one another, but are linked in some form to the same area of expertise.

The rich get richer and the poor get poorer. The people with the most amount of money in Ireland are in the smallest percentage and more often than not pay the least amount of tax pound for pound

 

[dRNk SAnTA]

The downsides of being in the euro are being overblown. We aren't the only small country in the euro, and every eurozone country has had low interest rates for the past decade. The difference for Ireland is that fiscal mismanagement by the Irish Govt has given us one of the the deepest recessions in the world.

And the most forgotten point is that the reason we haven't gone the way of Iceland (i.e. every individuals savings and pensions gone down the toilet) is because we've had the European Central Bank pouring money into Ireland keeping us afloat.

In the UK the govt has devalued their currency by printing money - an option not available to Ireland. This has cut the value of the pound by 30%. This has upsides in that it has made the UK cheaper relative to other countries - and makes the UK export industry more competitive. But it has also robbed every single person in the UK of 30% of their wealth. Every single persons wages and savings are now 30% less valuable in real terms.

Ireland is in a mess but we still have a couple of things going for us: a strong export industry and a relatively low national debt. If we were to leave the euro it would damage our export industry since we now export hugely to the eurozone, and it would increase our national debt over night because all of the debt would remain in euro while we move to a new Irish currency.

On the fiscal side of things, the difference between what the government is taking in and what it is spending is so huge. Sadly there are going to be brutal cuts.

 

[Red Hand Devil]

Ireland has had the biggest gap between the wealthy & the poor in the EU for many a year. The Government would have you believe that the Country is on average - Middle-Class & that poverty isnt a factor for Lower-Classes!

The simple fact of the matter is that 5% of the population own 40% of the Country's wealth, yet it is the 95% who will be hit hard following the Budget due next month.

This 5% are those that have benefitted the most during the boom years, yet when the medicine is to dished out - the only folk forming a queque will be those who fear the worst & most of their problems through no fault of their own!

Housing repossession orders are now daily. Banks were bailed out by the Government - who's gonna bail out the ordinary worker that is hitting hardtimes?

The Government have increasingly driven a wedge between themselves & the 95%, because our present Government is one of big-business orientation & you'd have to ask - who actually runs the Country of Ireland when the debts incrued by the banks are bought by the Government for €50+ Billion - yet we are told that the Government need to cut Public Spending in the next Budget by €4 Billion or we're fecked!

Cost of Banking Bailout = €50+ Billion

Cost of mismanagement of Irish Economy by the Government & Banking Institutions = Priceless

 

[Team Brian GB]

The downsides of being in the euro are being overblown. We aren't the only small country in the euro, and every eurozone country has had low interest rates for the past decade. The difference for Ireland is that fiscal mismanagement by the Irish Govt has given us one of the the deepest recessions in the world.

It is a major instigator, whilst most economies in the eurozone had seen anaemic to modest growth from 2000-2008 whether they be big or small Ireland's economy was booming out of control. Though as you are a country of only 4million the European Central Bank has to ignore you and look at how to solve the inadequacies of the German economy and her 82million people and very high unemployment. You needed quite high interest rates to keep your economy from getting overheated yet precisely because you were a small economy in the eurozone you recieved very low interest rates which fanned the fire. If it wasn't so easy to get a line of credit in Ireland these past ten years as it should have been if you had fiscal control then it wouldn't be so severe a situation in Ireland as it is today.

There is one other country in the eurozone that like Ireland would have benefitted from higher interest rates - that being Spain, who today is on the verge of 20% unemployment.

 

[Legend16]

not being able to devalue our currency is a major issue. added to that the lack of imagination in the solutions that are currently being bandied about is worrying. right now we are being told by the wankers who got us into the shit that the only way out is to prop up the same system. more recently I've been reading about other solutions and things like allowing the banks to fall to allow for a new start in a year or so seem more imaginative and dynamic.

I dont trust the guys who are telling us nama is the only show in town. I believe there is a coalition of common interests that are rooted in conservatism and weighted in favour of protecting others interests. make no mistake the system as we know it has failed. I want to hear people talking about alternatives to it. right now we are being asked to plug it up to a very expensive life support system. Perhaps we should be pulling the plug.

 

[iSparky]

its hard to see it ever getting better here, thats one of the reasons i am moving to london myself, plus i never really planned to stay here anyway but thats a whole different matter. Our governments strategy in the last two budgets has been clear, massive cuts in the public sector and tax the living shit out of everything. We need a new government purely to have new and fresh ideas, i cant listen to cowen waffleing on about his mandate to govern, that mandate is gone after a vote of no confidence in the government and also how his government was exposed to us about how they spent freely in the boom time now the average tax payer is paying the price. Its clear from the local elections where FF now stand in peoples minds and at the moment they are on borrowed time.

Lisbon was passed because people are now shitting themselves and rightly so, look at the mess we are in and we have the likes of cowen, kenny, ryan ect making more money than the US president. and as for those rte cnuts saying their wages are none of our business well im sorry but as long as we pay the tv licence that helps pay your wages it is our fecking business.

cnuts

 

[Red Hand Devil]

its hard to see it ever getting better here, thats one of the reasons i am moving to london myself, plus i never really planned to stay here anyway but thats a whole different matter. Our governments strategy in the last two budgets has been clear, massive cuts in the public sector and tax the living shit out of everything. We need a new government purely to have new and fresh ideas, i cant listen to cowen waffleing on about his mandate to govern, that mandate is gone after a vote of no confidence in the government and also how his government was exposed to us about how they spent freely in the boom time now the average tax payer is paying the price. Its clear from the local elections where FF now stand in peoples minds and at the moment they are on borrowed time.

Lisbon was passed because people are now shitting themselves and rightly so, look at the mess we are in and we have the likes of cowen, kenny, ryan ect making more money than the US president. and as for those rte cnuts saying their wages are none of our business well im sorry but as long as we pay the tv licence that helps pay your wages it is our fecking business.

cnuts

Well fecking said Sparks

 

[sammsky1]

Something I was thinking about. Like I say I'm no economist, but lets go backwards; all the way back to the basic human needs.

We need food. We need clothes. We need Shelter and we need healthcare. If anyone can add to the pile of basic human necessities be my guest.

From what I can see in the goods industry you have a chain from origins all the way up to the consumer. The net value worth at origins is going to be considerably different to what the consumer ultimately pays. This is to be expected. As Ireland currently stands however, the net worth of home grown goods at the origins point Vs the price a consumer pays is in stark contrast. This is why it's so fecking expensive when you visit Ireland !

Bearing this in mind and considering that this also stands for the basic necessities, nobody can expect say.......Diagio (to use a common example) to drop their prices so that suppliers can buy cheaper off Diagio and sell to the pub owner at a cheaper rate so that the public can purchase a beer for €3.20 instead of €5.80. The reason being is that Diagio's overheads are too high, and I'm assuming that a large portion of their overheads go to pay their staff.

.....Forgive me if I am off the mark here by the way. This is only a shot at how i am thinking. Like I say, I'm a layman when it comes to this.

You cannot lower staff wages because the basic necessity costs of living are too high. Managing to live in Ireland costs too much money, so wages have to be at a certain level so that a decent standard of living in sustainable.

However, if food, clothing, shelter and health care were at a reasonable price it would be easier for companies like Diagio to justify wage slashes. By slashing wages there is a greater margin for profit thus creating an opportunity to lower their sales prices. The suppliers come in and buy barrels of Guinness for a much lower price and sell it on to the pub for a lower price. It means that even though a publican has dropped his price to €3.20 for a pint he is still making the same % profit, and this profit is enough to sustain himself with the lowered price of basic necessities.

What if every industry sector took on this template. It's never going to work like clock work I realise, but in theory would this actually work ?

Very astute analysis for somebody who claims not to be an economist!

You are correct in assuming that a major cost of all manufacturing and services is labour cost. And that the cost of labour in the UK and Ireland is higher than most other countries. That is why goods manufactured in these Islands is so expensive.

As the technology gap has diminished in many categories (like electronics, clothing etc), so countries with lower labour costs have been able to provide the same goods at much cheaper cost. In fact, these countries have gotten so good, they can provide the goods at a much cheaper cost ...

Look at the cost of clothing in Spermarkets, a whole new phenomena that did not exist less than 10 years ago and yet the clothes are far cheaper now than before. likewise, shoes, cutlery, furniture etc.

Indeed, only the cost of housing has increased and that is because the land is scarce in the UK and yet its desirability is increased.

I understand your point on going 'back to the beginning' ... but companies already have and what happens is that the jobs get exported out of the UK ... call centres being another example!

 

[iSparky]

Well fecking said Sparks

indeed

and now the governments latest plan to make money from the world cup has gone down the shitter, i mean that plan falls apart if we are not there

 

[VidaRed]

ireland are planning to leave the eu over football issue.