[Closed] These £7bn loans to the Irish Republic by UK Gov't - eh?

Apart from being the same amount saved from the austerity cuts, it safeguards the boni of British bankers as if the Irish banks fall so will the British.

also we export around 15 times that amount to ireland every year, if their economy goes tit's up so does ours

+1 simon. They're one of our biggest export markets. If they don't buy stuff, we can't sell it.

Ay, I get that. But why the hell do we need to lend them it? Surely the last thing you do when you're skint is loan people money.

Or is it simply a case of logic has no place here.

it's also the UK's 5th biggest trading partner. About £15bn worth of exports to the ROI from the UK last year.

But why the hell do we need to lend them it?

Because on the open market, the Irish are not able to borrow money without incurring a punitive rate of interest. Us loaning them cash at 5% is better for them and by extension us, than them having to pay nearly 9% to commercial lenders.

Forgive me if I'm wrong, but doesn't it mean that we're more likely to make money by continuing to export there, plus a nice bung in the shape of interest on the loan?

Surely the last thing you do when you're skint is loan people money.

Doesn't that depend on the interest rates of your own debt compared to the interest rate of the loan. Could be a good earner.

Just a few month's ago Scotland aspired to be another Ireland, now Ireland want to be like Scotland

🙂

To put in into context the UKs deficit (the amount of money we borrow) was £10.4 bn alone in October.

So in the grand scheme of things it's just a token gesture.

Who the hell do all these skint countries (like ours) actually owe money to?!

I've exported many 1000s of tonnes of spuds to Ireland in the past. They know a fine potato when they see one!

They're one of our biggest export markets. If they don't buy stuff, we can't sell it

Because on the open market, the Irish are not able to borrow money without incurring a punitive rate

Nothing like avid capitalists bailing out other avid capitalists when the excesses of their system means they go belly up whilst preaching to us about cuts and how this very same system will save us

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I'll sign up for anything

uplink - Member
Just a few month's ago Scotland aspired to be another Ireland, now Ireland want to be like Scotland

It was only a few years ago Osborne was suggesting the UK follow the Irish model.

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I'll sign up for anything again!! 😛

If they default we will just take the republic then we can form a united Ireland......

rootes1 - good point. i've not heard anyone mention the union and the politic stuff in the north with regard to this. this is about oh so much more than just having somewhere to export goods to, i wonder if it's about the UK having a show of strength over the republicans.

all IMHO of course 🙂

i wonder if it's about the UK having a show of strength over the republicans.

I haven't heard anything that funny in days. Any more nuggets like that?

as if the tories would do such a thing 😮

Question
Where did we get the £7bn from?

Answer
We haven't got it, we're borrowing it.

Question
So that's like me borrowing money from the bank, to lend to a customer to hopefully) buy my products?
And what happens if they spend it elsewhere, or buy more from me and neither pay me for what they bought, nor pay back my loan?

Answer
You're f***ed

Now remind me again why we (how have control over both our banking and our currency) ought to be getting involved in Ireland/Euro?

Edit - and its not the 'governments' money, but ours!

uplink - Member
Just a few month's ago Scotland aspired to be another Ireland, now Ireland want to be like Scotland

What? Have they oil to steal?

I would like to know how we can afford to wage a war, lend bi££ions to the Irish, and yet we cannot afford to educate our young.

Us loaning them cash at 5% is better for them and by extension us, than them having to pay nearly 9% to commercial lenders.

And according to the BBC news we can borrow it at 1.5% to lend to them at 5%. Sounds like a good deal to me as long as we get it back.

The tories run the country for the super rich only.

so waging war and lending money are in their interests, but paying to educate your kids isn't.

This sounds awfully like the ridiculous borrowing/lending money-go-round that got the entire world into this mess in the first place...

Have they actually accepted this direct loan offer from the UK?. Every Southern Irelander I've ever met hates us with a historical deep seated passion, not us as individuals, but 'Brits'. I just can't imagine any one of them willing to stomach [s]a hand out[/s] financial assistance directly from the UK.

So the Irish government has now collapsed with a general election due in January.

Well the crises which Ireland is experiencing right now was predicted [i]exactly[/i] two months ago in an article in the Guardian :

[url= http://www.guardian.co.uk/business/2010/sep/23/ireland-austerity-budgets-comment ]Ireland's austerity measures show us how not to do it[/url]

Quote :

[i]"Writing in the Sunday Telegraph in April, Liam Halligan contrasted Ireland's "mature, responsible approach to fiscal consolidation" with the UK's "weak-willed approach". By taking the deficit seriously, Ireland was winning the respect of the bond markets, leading to lower long-term interest rates. They, in turn, would lay the foundation for economic recovery.

George Osborne, David Cameron, Nick Clegg and Vince Cable bought this argument, which is why Britain had an emergency budget within six weeks of the election and is about to experience the deepest cuts in public spending since the 1920s. Despite the wobbly state of the global economy, the coalition government at Westminster believes the Irish were right to take their medicine early.[/i]"

All those countries who insist on strictly adhering to the failed neo-liberal model are digging themselves into a deeper hole. Whilst those who have ditched the failed neo-liberal model and are now pursuing the proven Keynesian economic model, are experiencing growth and are riding out the global crises, for example most Latin American countries.

Still, as long as the Tories, the LibDems, New Labour (and yes New Labour is still alive), and all of the right-wing newspapers, say There Is No Alternative, then I guess There Is No Alternative.

Because to admit that the neo-liberal model has failed, would be to rob the rich and powerful of their ability to make vast wealth at the expense of ordinary people. A right which they won and have cherished ever since Thatcher first came to power. And not one which they are not likely to give up without a fight.

and Latin American countries are a shining example when you're talking about the rich and powerful making vast wealth at the expense of ordinary people.

Back in the old days, when a country got into trouble, the IMF would come along and:

(a) lend them some money
(b) demand cuts in government spending
(c) demand a devaluation

(c) meant that the county would become competitive again, and also meant that foreign investors would share some of the pain.

Ireland though is only getting (a) and (b). How is this supposed to work?

I think point c really shows the inherent risk in trying to apply a single currency across a diverse and very different range of states.

as sasid above, we borrow at 1.5%, loan to Ireland at 5%, that's 3.5% return on 8 billion, or about 250 million. Not a bad return for "helping out a neighbour"

[i]as sasid above, we borrow at 1.5%, loan to Ireland at 5%, that's 3.5% return on 8 billion, or about 250 million. Not a bad return for "helping out a neighbour" [/i]

A bit like lending money to a neighbour, who you'd seen spend, spend, spend for the last 10 years... are you happy they are lending money that YOU are going to be paying interest on for the rest of your (and probably your kids) lifetime?

I thought that most of it was going to the banks to help prop up their capital ratios and restore confidence in the banking system which would then lead to a return to growth.

A run on a bank's core capital would see it pull lots of lending and lead to a downward spiral growth.

So, the money is not a direct fiscal stimulus.

As I understand it:

1)We bailed out our banks, so we own most of RBS etc.
2)Our banks own various Irish banks, and also other Irish banks owe them hundreds of billions.
3)If Ireland goes bust, our banks lose hundreds of billions, which thanks to the way our banks failed, means that we as a country lose hundreds of billions.

So, we loan Ireland (and Irish banks) the money, in the hope that they won't spunk it away on champagne and hookers and big bonuses, and will rather spend it on not going bust, and then our banks won't go bust, which means we won't go bust.

Meanwhile bankers in UK banks have got massive bonuses because except for the bits of the bank with massive potential losses from Ireland / Europe etc. The rest of the bankers have made some easy money out of all the bailouts and currency problems round the world. Ignoring the fact that they have massive liabilities to dodgy countries that might bite them in the future, and are already only not bust due to massive state intervention, because that is in another division and completely unconnected oh yes.

Joe

B.A.Nana - Member

and Latin American countries are a shining example when you're talking about the rich and powerful making vast wealth at the expense of ordinary people.

Absolutely.

In recent years there has been a fundamental shift of wealth towards ordinary people at the expense of the privileged few (and the IMF) who benefited so much from the previous Washington installed regimes.

For example, within 4 years of abandoning neo-liberalism and adopting Keynesian social-democracy, Argentina had halved poverty.

So yes, well done for noticing B.A.Nana.