8 billion quid!!

Tonymufc

It was announced today that Britain will lend Ireland £8 billion quid in order to help them get out of the financial sh1t. Am I the only one to think where the hell, after all the cuts that have been announced, do we have the money to lend the Irish £8 billion quid? :shock:

fast as fupp

yes theyll just cut more oiks jobs

el_presidente

The whole global system is screwed. Ireland owes RBS €77bn (€16,000 for every man woman and child of Ireland's population). So us lending them 8bn is an attempt to shore up RBS (and Lloyds) again. But of course lending money to someone who is broke, so they can pay back the money you've already lent them, doesn't really work.

The entire global system is already screwed and it's getting close to the end game now. Advise your children to learn Chinese or teach them to live off the land.

rick_chasey

Britain spends similar amounts on Nuclear decomissioning (to put it into some context) and ultimately, if Ireland collapses and the subsequent costs that causes elsewhere, it'll hurt the UK economy more than the bailout will.

Anonymous

The government aren't lending them money they have.

They're simply going to borrow the money themselves at 2.5-3% interest then re-lend the same money to Ireland charging them 5%, so in theory we make money, as long as they pay it back.

This is a good deal for Ireland as at the moment they can't borrow money for less than 8%.

Also in theory they should actually have to use the money, the idea is the fact they have the money will be enough to build confidence so they can continue as they were before.

Now whether it's are responsibility to help or not is a different matter.

rick_chasey

RichardSwt wrote:

The government aren't lending them money they have.

They're simply going to borrow the money themselves at 2.5-3% interest then re-lend the same money to Ireland charging them 5%, so in theory we make money, as long as they pay it back.

This is a good deal for Ireland as at the moment they can't borrow money for less than 8%.

Also in theory they should actually have to use the money, the idea is the fact they have the money will be enough to build confidence so they can continue as they were before.

Now whether it's are responsibility to help or not is a different matter.

I don't think it's quite that simple somehow...

Pross

The danger though is surely that those lending us the money will realise that we are passing it on to a less reliable source and consequently charge us more in the first place?

The truth is we NEED Ireland to get some stability as they are a big source of income (they spend over £3k per person on British goods and services each year and are a bigger user of our products than China).

jibberjim

Pross wrote:

The danger though is surely that those lending us the money will realise that we are passing it on to a less reliable source and consequently charge us more in the first place?

Obviously it would increase our risk and so the rates we'd be charged, but not that much borrowing another 8bn isn't that much. So it's unlikely to change the UK rate much because there's still the confidence that it would be repaid even if the Irish completely defaulted.

Anonymous

Rick Chasey wrote:

RichardSwt wrote:

The government aren't lending them money they have.

They're simply going to borrow the money themselves at 2.5-3% interest then re-lend the same money to Ireland charging them 5%, so in theory we make money, as long as they pay it back.

This is a good deal for Ireland as at the moment they can't borrow money for less than 8%.

Also in theory they should actually have to use the money, the idea is the fact they have the money will be enough to build confidence so they can continue as they were before.

Now whether it's are responsibility to help or not is a different matter.

I don't think it's quite that simple somehow...

I'm sure your right, I can't pretend I know much about international finance. But people seem to think the UK has this big stash of cash we're lending from and we don't.

rhext

If we don't, they'll just end up defaulting on their bank loan guarantees, and we'll take the hit anyway via exposure of UK banks in Ireland (eg RBS). At least this way we stand a chance of being repaid and even making a small profit. After all, we didn't bail out banks in Iceland - but how much taxpayer's money did we lose through all the local authorities who kept their funds on deposit over there?

And anticipating the cry of 'why should we use taxpayers money to bail out bankers at all?', we're not bailing out bankers, we're bailing out a banking system. The problem is that if we allow some large financial institutions to go under there's a risk that they'll take the rest of the financial system down with them. No point worrying about using taxpayer's money to bail out institutions if the consequence of not bailing them out is that the very concept of money becomes meaningless. Great for anarchists, but perhaps not so great for the rest of us.

neiltb

so right now they owe 77bn (taken from above, no further research), you lend them 8bn in the hope that that you have a chance of being repaid?

so when it goes ar$e up, the damage is 85bn + interest instead of 77bn + interest.

Is it hoped that the EU will continue to float failed economies to protect the Euro and provide money ad lib? what happens when that well goes dry?

look at it another way, a freind of yours borrowed 77 quid and admitted he can only pay 20, would you give him another 8?

Jez mon

neiltb wrote:

look at it another way, a freind of yours borrowed 77 quid and admitted he can only pay 20, would you give him another 8?

a) it utterly depends on the friend

b)It's not as simple as that though is it...

If your friend was about to go bankrupt, needed that money to keep his head above water and (for whatever far out reason) you risked loosing everything if your friend went bankrupt, then we are slightly closer to the situation

verylonglegs

el_presidente wrote:

The whole global system is screwed. Ireland owes RBS €77bn (€16,000 for every man woman and child of Ireland's population). So us lending them 8bn is an attempt to shore up RBS (and Lloyds) again. But of course lending money to someone who is broke, so they can pay back the money you've already lent them, doesn't really work.

The entire global system is already screwed and it's getting close to the end game now. Advise your children to learn Chinese or teach them to live off the land.

Is it the Republic that owes RBS or Northern Ireland or a mixture of the two. I read quite a few various facts and figures about who owes what, some along the lines of what you say and others saying it is mis-reported and the majority of the loans were in Northern Ireland...it is a very muddy picture indeed.

ShutUpLegs

Increasing taxation on people working will soon repay that amount of money.

Frank the tank

el_presidente wrote:

The whole global system is screwed. Ireland owes RBS €77bn (€16,000 for every man woman and child of Ireland's population). So us lending them 8bn is an attempt to shore up RBS (and Lloyds) again. But of course lending money to someone who is broke, so they can pay back the money you've already lent them, doesn't really work.

The entire global system is already screwed and it's getting close to the end game now. Advise your children to learn Chinese or teach them to live off the land.

Lend me a tenner and I'll give you that eight quid I owe you. :roll:

neiltb

Jez mon wrote:

neiltb wrote:

look at it another way, a freind of yours borrowed 77 quid and admitted he can only pay 20, would you give him another 8?

a) it utterly depends on the friend

b)It's not as simple as that though is it...

If your friend was about to go bankrupt, needed that money to keep his head above water and (for whatever far out reason) you risked loosing everything if your friend went bankrupt, then we are slightly closer to the situation

but their is doubt that the situation is fixed, when do you admit defeat?

Crapaud

<intermission>

Apple boss Steve Jobs is to buy Ireland to solve the country’s debt problem. It will be rebranded iLand.

</intermission>

nolf

UK and Ireland get a good deal, by borrowing at 3.5% and lending at 5%, we make 1.5%.

It will only have a marginal affect on the UK credit rating, because 7bn is only a small proportion of UK govt debt, so if Ireland completely defaulted, it wouldn't have a significant impact.

The 1.5% the UK gets to keep by acting as an intermiediary to Ireland, is the fee for the UK accepting the risk of Irish default.

It's could be a good idea. The justification for the bailout is that it's a temporary cash measure, to keep things going until budget cuts allow Ireland to cut the budget deficit to below 0.
There's a risk that it'll lead to Irish reliance on short term liquidity measures, using them as long term financing solutions. If they do, they're screwed...

Anyway Europe's paying most of it. Britain accepts little risk.

Valy

Crapaud wrote:

<intermission>

Apple boss Steve Jobs is to buy Ireland to solve the country’s debt problem. It will be rebranded iLand.

</intermission>

Win.rar

el_presidente

nolf wrote:

It will only have a marginal affect on the UK credit rating, because 7bn is only a small proportion of UK govt debt.

Correct! the UK currently owes £845.8 billion so what's another 7bn between friends. It's growing at 10bn a month anyway. Still I am sure we can pay it back soon enough, gaining 1.5% margin from eire will help no end.

http://www.statistics.gov.uk/cci/nugget.asp?id=206

Scrumple

I had a cup of tea this morning.

takethehighroad

Apparently, and this is pretty heavy hearsay here, we were 75 minutes from going completely bankrupt in August 2008.

Source: The friend of the assistant to Mervyn King

Crapaud

TakeTheHighRoad wrote:

Apparently, and this is pretty heavy hearsay here, we were 75 minutes from going completely bankrupt in August 2008.

Source: The friend of the assistant to Mervyn King

Are you sure it wasn't an episode of Spooks?

el_presidente

TakeTheHighRoad wrote:

Apparently, and this is pretty heavy hearsay here, we were 75 minutes from going completely bankrupt in August 2008.

Source: The friend of the assistant to Mervyn King

Wouldn't surprise me in the least.

The government admitted they were 4 hours away from closing the cashpoints (and by extension all switch payments etc) which might have caused some small panic... I continue to be amazed this was not a bigger story in the media.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6227403/HBOS-and-RBS-came-within-hours-of-collapse-says-Mervyn-King.html

The question is what has fundamentally changed?

kafkathedog

sorry if this makes me sound like an idiot (which I probably am) but who does everyone owe money to?. Which countries don't owe money? I haven't heard of many that don't.

We can't all owe money surely, its ridiculous

el_presidente

kafkathedog wrote:

sorry if this makes me sound like an idiot (which I probably am) but who does everyone owe money to?. Which countries don't owe money? I haven't heard of many that don't.

We can't all owe money surely, its ridiculous

Every government owes money to bondholders. These are other governments, corporations, banks, pension funds etc.

Every government owes money because it is borrowed against the future i,e, future earnings.

This CIA list is all public & private debt. UK no 2!!

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html

Cressers

So when do we stop this madness? When Portugal or Spain are the next dominoes to teeter? Or when the contagion spreads to france or Germany?

el_presidente

Cressers wrote:

So when do we stop this madness? When Portugal or Spain are the next dominoes to teeter? Or when the contagion spreads to france or Germany?

could be coming sooner than you think. Euro is down 1c against the dollar already this morning, events are moving more quickly

rick_chasey

Cressers wrote:

So when do we stop this madness? When Portugal or Spain are the next dominoes to teeter? Or when the contagion spreads to france or Germany?

I think France and Germany are in strong enough positions not to fear contagion.

It's not madness, it's damage management.

tarquin_foxglove

Amount to be loaned to Ireland: £7bn
Amount estimated to be paid as 'City Bonuses': £7bn

I think I see a solution...

priory

I thought we should have offered the whole 77billion.
In previous centuries we have spent much more in money and blood to aquire tenuous influence over southern ireland.
This way we can buy it and they would be grateful.
Of course it could go a bit sour when we want to get our money back in taxes but too late then.
And who doesn't want to help out the irish? Half of them live in england anyway.
When I last looked a substantial porti0n of british forces seemed to have the irish accent.