Irish Economy-Storm clouds gather

The CSO says an extra 12,000 people signed on the Live Register in March.
This follows an increase of 8,500 in February. Since December alone the number of claimants has gone up by 30,000

The Exchequer figures reveal that after just three months, tax revenue is €600 million behind Budget day projections and €727 million down on the same time last year. The fact that nearly all taxes are significantly behind predictions (Capital Gains Tax and VAT at €311 million and €253 million respectively) suggests the downturn in the house building sector has now spread across the economy. Fine Gael Enterprise, Trade & Employment Spokesman Leo Varadkar TD has said, "In contrast to previous months, when new arrivals on the dole queue were mostly men, the 12,000 increase in March was split evenly between men and women. This confirms that the housing downturn has now spread from the male-dominated housing sector to the wider economy, discrediting Mr Cowen's assertion that what we are witnessing is simply a 'housing sector adjustment'.

House completions in 2006 were 93,419. Completions for 2007 were 78,027. Brian Cowen estimates house completions for 2008 at 55,000. However it is more likely to be closer to 45,000. Failure to tackle the Stamp Duty issue promptly damaged confidence. Also a 2% rise in interest rates helped to burst the bubble.

With inflation stubbornly high at 5%, high interest rates, rising fuel costs and falling house prices, 2008 is shaping up to be a very difficult year for the economy. According to Fine Gael the cost of Government-regulated services has risen by 45% since 2002 and accounts for one half of all non-mortgage inflation.

The Government has sought to blame external factors. This is only partially true. The Government itself opened the purse strings in 2006 and 2007 and allowed an unsustainable escalation in public expenditure. In 2007 it rose by 13%. This poured petrol on the flames and over inflated economic growth leading to a feel good factor, which enabled the Government to win the 2007 General Election. Now the Government must endeavour to reign in public expenditure at a time when the economy could benefit from a stimulus.
Gradually growth projections for the year have been revised downwards. The country could face an Exchequer deficit of over €6 billion for 2008.

The Telegraph snipes at Ireland and its economy as usual

The following is posted by grumpylarry in the Telegraph

“The Irish it would appear are not as well served by the EMU as they would have us believe. Or could it be that they don't understand money and finance quite as well as they think. In my last blog I highlighted the problems some of their east European labour was suffering due to the downturn in the Irish economy. It would appear that the many of the 'New Irish' now find themselves broke, unable to speak the language, depending on charity to eat, struggling to keep a roof over their head or homeless, and too ashamed to go home. They may well be joined by the native inhabitants of the emerald isle, and this time they wont have the wicked British to blame…”

It is accompanied by a picture from the late 1800s or early 1900s which gives an image of abject poverty. The picture has the caption ”YOU CAN'T BLAME US THIS TIME.” The gloating is based on ignorance.

The Telegraph has never got over the fact that we are an independent people since 1921/22. Of course there are serious problems in the Irish property market. I have documented them from time to time. Nevertheless there is not a scintilla of evidence to suggest that Anglo Irish Bank, AIB or Bank of Ireland face collapse. These banks are robust and quite profitable.

It is a bit rich to listen from lectures from the UK on Irish problems.

Has not grumpylarry heard about Northern Rock, the UK bank that got a £25bn bailout from the British government recently?
Has he forgotten the Lawson boom/bust?

Ireland-Government cut-backs begin to bite

A Winter of discontent is looming in the Irish health service.


Delegates at the Irish Nurses' Organisation (INO) annual conference have passed an emergency motion condemning a ban on recruitment introduced by the Health Service Executive (HSE) earlier this month.
The emergency motion put to delegates in Killarney was in response to cutbacks introduced by the HSE on September 4th in an attempt to reduce a €245 million financial deficit.

Fine Gael Health Spokesman James Reilly TD has condemned the extensive front line job cuts at Sligo General Hospital saying that it was clear that patient care would be adversely affected.
"Cutbacks have been the order of the day since Fianna Fail and the PDs were returned to Government with hospitals in Ennis, South Tipperary, the Midlands and now Sligo particularly hard hit.
"The jobs cut today include 30 nurses and four consultants so once again we are seeing cutbacks hitting front line staff while the bloated bureaucracy within the health service remains untouched."

According to FG TD Joe McHugh:
Fianna Fáil has slashed funding for community childcare groups also. "Under the previous EU-funded programme, all working parents were entitled to funding towards their childcare expenses. But the Fianna Fáil Government has withdrawn this incentive for mothers to enter the world of work. The Government's new scheme penalises working mothers, as only those in receipt of social welfare or family income supplement are entitled to funding. If anything Fianna Fáil, is now encouraging them to go on social welfare."

Funding for rural roads has also been cut. Promises of funding for rural roads undoubtedly contributed to the election of many FF rural TDs. No sooner was the election over than the promise was binned. There is silence from these TDs.

So its hairshirt time once more for an electorate that has given FF a new mandate. On this occasion FF TDs are unlikely to rock the boat. We will have the ritual expressions of concern about cut backs from FF backbenchers. This type of posturing has traditionally served them well when they act simultaneously as Government and Opposition. Vote in the Dail for cutbacks and oppose them locally in the constituencies.

Prior to the election public expenditure escalated out of control as the Government sought a new mandate. It was party time. Now the hangover has set in. The Irish economy resembles a drug addict waiting for the next fix. Unfortunately it is a time for cold turkey .