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Understanding Ireland's Economy

Caoimhghin Croidhein
Latest update: 06 - 04 - 2020

A collection of tables, graphs, quotes and comments (with a
minimum of unexplained jargon) covering aspects of the Irish economy such as:

Tax Revenues

Tax Revenue 2011 - 2012



In 2012 the Irish government received 4.2bn in corporation tax and 15.18bn in income tax.




Advanced Tax Agreements (ATAs)


Glanbias 1bn Luxembourg move to cut its Irish tax bill
(The Irish Times)

More than 340 firms got tax deals from Luxembourg, leaked documents show

Irish food multinational Glanbia has put more than 1 billion into companies in Luxembourg that have no employees but serve to reduce its tax bill here.

The companies are the subject of advanced tax agreements (ATAs) negotiated with the tax authorities in Luxembourg and feature in 28,000 pages of leaked documentation from PricewaterhouseCoopers (PwC) in Luxembourg detailing ATAs with multinational companies around the globe.

The leaked documents have been shared by the Washington DC-based International Consortium of Investigative Journalists (ICIJ) with more than 40 media groups around the world, including The Irish Times.

The leaked documents show how Pepsi, Ikea, FedEx and 340 other companies secured tax deals from Luxembourg, allowing many of them to slash their tax bills while maintaining little presence in the tiny European Union member state.

The material also shows how foreign multinationals use Ireland as part of Luxembourg- based structures that reduce their corporation tax bills in the Republic and elsewhere.
Transactions covered by the ATAs include cross-border loans that create interest costs that can be charged against tax outside Luxembourg but which create relatively tiny tax charges in Luxembourg.

The Organisation for Economic Co-operation and Development has noted in a recent report on global tax change that $1,987 billion went into Luxembourg special-purpose entities companies that often have few if any employees as part of global financing and tax planning structures. Most of the money came straight back out again.



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Tax Revenue 2012



In 2012 the Irish government received 11% of Tax Revenue in Corporation Tax and 41% of Tax Revenue in Income Tax.


Tax Revenue 2013

Corporation Tax Rates around the world

Eurozone Statutory Tax Rate (%)



"Irelands headline tax rate of 12.5 percent is the lowest in the Eurozone.

At the higher end are Germany, France, Greece and Spain with statutory tax rates at 35 percent. Ireland comes in at the bottom.

The average tax rate is 30.4 percent (data for Cyprus, Estonia, Malta and Luxembourg are not available)."



Eurozone Effective Tax Rates (%)


What are 'Effective Tax Rates'?

"Effective corporate tax, like effective income tax, is the rate which is paid once reliefs, allowances, exemptions and depreciation is taken into account.

The average corporate tax rates over 30 percent statutory falls to 18 percent effective.

For example, France falls from over 35 statutory percent to 14 percent effective nearly a 50 percent fall. France is below the Eurozone average."


Effective EU Corporate Tax Rates (%)



"Leading US senators push Irish government to fully tax Apple, Google etc.

Ireland's days as a tax haven for American tax companies, such as Apple, Google and Facebook, may soon end if US senators get their way.

The chairman of the Senate Permanent Subcommittee on Investigations, Carl Levin (D-Mich.), and Sen. John McCain (R-Ariz.) are again attempting to curtail the Double Irish and Dutch Sandwich tax-avoidance scheme (in which American-owned companies use Irish and Dutch subsidiaries to funnel profits into low- or no-tax jurisdictions)

The proposed policy change would move Ireland a step closer to fully charging companies its official 12.5 percent corporate tax rate. Loopholes frequently lower the tax rate to around 3 percent.

The US government is losing tens of billions of dollars at a time when we are revenue-constrained, worrying about the deficit, cutting spending you know, we need all the money we can get, said economist Bruce Bartlett, a former domestic policy adviser to Ronald Reagan.

The Double Irish utilizes loopholes in US and Irish tax laws to move profits of US multinationals from Ireland to jurisdictions with zero corporate-tax rates, such as Bermuda.

The so called Dutch sandwich shifts profits in Ireland through the Netherlands en route to Bermuda.

The Post reports that Audit Analytics notes that major US companies pumped up their offshore earnings by 15 percent last year to a record $1.9 trillion by posting profits outside the US and avoiding a huge tax bill."


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Petrol Taxes


Petrol Taxes

Ireland is world's fourth most expensive for petrol

[A] report, by Louth accountants, UHY Farrelly Dawe White, also found that Irish diesel prices are the fifth highest in the world.

It costs about 139 to fill the tank of a Ford Transit with petrol in Denmark; in Ireland, it costs about 128. The cheapest place to buy petrol is the United Arab Emirates (UAE) followed by Malaysia, Mexico and the US. It costs 27 to fill up a tank with petrol in the UAE, 37 in Malaysia, 52 in Mexico and 55 in the US.

Taxes account for almost 60 per cent of the cost of filling up the tank of a Ford Transit with petrol in Ireland, compared to about 13 per cent in the US. There are no fuel taxes in China or Malaysia.

A typical Irish driver pays about 2,754 a year in fuel and 1,652 of this is tax.

A spokeswoman for the Department of Finance said fuel prices are driven by several factors "including the price of oil on international markets, exchange rates, production costs and refining costs".


Tax hikes drive price of petrol and diesel up European league table

A survey of 27 countries carried out this month by the Automobile Association (AA ) found that drivers in Norway pay the most for a litre of petrol 1.92 despite owning all the North Sea oil off their shores.

They are followed by the Netherlands (1.86), Italy (1.81), Sweden (1.77) and Greece (1.72). Poland had the cheapest fuel at the forecourt, charging its drivers just 1.32 a litre, closely followed by Latvia (1.34), Estonia (1.36) and Luxembourg (1.37).

Our nearest neighbours in the UK pay slightly more, forking out 1.61 for every litre they buy. Ireland is in 12th place. The price of petrol and diesel crept upwards at the pumps this month for the first time since last September.

AA corporate affairs spokesman Conor Faughnan said: "We used to have the cheapest petrol in Europe in 2008. But since October that year, the various government taxes have added 23c onto a litre of petrol."

"In countries like Norway they have higher fuel taxes, but they don't have the full range of motor taxes we have, such as VAT, insurance levy, Vehicle Registration Tax, tolls, motor tax. We have them all."


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Water Charges



The Government Should now Come Clean on Water Charges

November 05, 2014
Michael Taft, Research Officer, UNITE the Union

I admit I cant let this issue go but such is the misrepresentation, partial information and deliberate obfuscation being put out in the debate that it goes beyond a narrow calculation. It actually reveals a Government determined to hide the facts in pursuit of a policy which caused over 150,000 to demonstrate last weekend.

Yes, Im talking about water charges but specifically about the estimated impact on the deficit if water charges were removed. And now Dr. Tom McDonnell over at the Nevin Economic Research Institute has done his own sums and they mirror what I had previously calculated here.

The Government is claiming that removing the water charges would cost 800 million (this was run out again on Morning Ireland today). Is this correct? No. Lets look at how the Government is obscuring the real numbers and see if we can find the right ones. If this gets a little number-dense please stay with it for it is about more than just abstract calculations; it is about how the Government is treating this issue and the public at large. All numbers are approximate and rounded. I have produced a summary table below.

First, the total cost of water service provision is 1.3 billion (700 million in current spending and 600 million in investment).

Second, the Government is committing 500 million from the Local Government Fund to Irish Water. This is on the books; that is, this is counted as government expenditure.

Third, this leaves a saving to the Government of 800 million.

So far, pretty clear. The Gvvernment's argument seems to stack up. But, no, this is not the case. Because the Government is losing 250 million in revenue. This is the amount collected through commercial water charges on businesses This used to Government coffers. Now it belongs to Irish Water.

So the Government gains 800 million savings on the expenditure side but loses 250 million on the revenue side. This leaves a saving of approximately 550 million. This is pretty much the same number that Dr. McDonnell arrives at: 527 million.

Ok, so we have sorted that out. The actual cost of removing water charges would be 550 million yes? No, that's not it either. Because the Government is spending money as part of the move to water charging spending that wouldnt exist if there werent the charges. Dr. McDonnell states that he doesnt factor these in. So lets do that. There are three expenditures:

First, Social Protection is increasing subsidies to the Household Benefit Package and recipients of the National Fuel Allowance scheme to offset the cost of their water bills. This will cost 66 million.

Second, a water tax credit scheme is being introduced. This will cost 40 million.

Finally, the cost of providing free water allowanced for children is on the books; that is, it is counted as government expenditure.

Social transfers in kind include such items as free travel on public transport, fuel allowances and the child-based free allowance related to water charges.

How much does this cost? The Government doesnt say. But we can estimate. There were approximately 1,170,000 recipients of Child Benefit. Each one of these children should be receiving a free water allowance of 21,000 litres per year. On the basis that this will cost 102 per child, this brings the total cost to 119 million. But this is just an estimate so lets be conservative and round it down to 100 million.

When we add up these costs Social Protection subsidies, tax relief and free water allowances for children it comes to 200 million. This will cost the Government.

When we subtract these expenditures from the 550 million net savings to the Government from moving Irish Water off the books, the bottom-line savings is between 300 and 350 million. Heres the summary table.

Water Deficit
So the Government claims removing water charges will cost 800 million. But when we factor in the lost revenue (commercial water charges) and additional expenditure (Social Protection subsidies and tax cuts), the net cost will less than half that: between 300 and 350 million.

Why is this so important? Because it shows that if water charges were removed, the impact to the deficit would be miniscule (0.16 percent of GDP). This would still leave the Government well below the deficit target. The Government is refusing to listen to people not because it would undermine their deficit target but because . . . well, you supply the answer.

The Government can claim its numbers are right but only if they ignore the losses and additional expenditure. This is highly misleading. They do not refer to net costs; they do not refer to the net impact on the deficit. This is no way to debate public finances.


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Wealth Taxes



The growing concentration of income

Why gross income inequality matters
Cormac Staunton

Gross income inequality is the inequality of incomes from the market - including wages, self-employed incomes and investments. When we look these incomes in Ireland over a period of time we see a growing concentration of income in the Top 10%, and in particular the Top 1%.


During the period of economic growth from the early 1990s, the share of income earned by the Top 10% in Ireland rose, meaning that the vast majority of people, the Bottom 90% of the population, lost a proportional share of the national income. The Bottom 90% share of national income fell from 71.4% in 1975 to 63.9% in 2009.





Irish Congress of Trade Unions
Growth is the Key: Pre-Budget Submission [Oct 2011]
Page 13: Wealth Taxes

'wealth being defined as current value of all assets'


Irish Statute Book
Wealth Tax Act, 1975
'private non-trading company means a company whose income in the twelve months preceding the valuation date consisted wholly or mainly of investment income'


A NEW LEVY on the wealthy and minimum taxes for high earners are among the measures called for in a pre-Budget submission from the Irish Congress of Trade Unions.
An annual one per cent tax on all wealth above 2million including the value of houses above 1million could take in around 500million a year for the State, according to the document.



Claiming Our Future has outlined a menu of proposals to generate badly needed revenue to protect mid to low incomes, minimise cuts to public services and create jobs.

These include:
a) a levy on assets and property worth over 1 million
b) high net worth Irish citizens paying their dues here so that the number of tax exiles decreases
c) eliminating tax breaks for those with high incomes so that they pay their fair share
d) a levy on financial transactions over significant amounts (known as a Tobin tax) and
e) a higher tax rate on incomes over 100,000.

The revenue to be generated from a wealth tax on assets worth over 1 million could generate between 500 and 600 million alone per annum. Tax expenditures in the main benefit the highest paid.  80 per cent of pension reliefs go to the top 20 per cent of earners.  

Property-related tax expenditures also disproportionably benefit the most well off.

Tax expenditures like these effectively mean average and low earners subsidise high earners.  Changes in tax expenditures in the area of pensions and property related reliefs could save the exchequer in the region of 1billion.


Minister Noonan said that between 52 million and 312 million a year could be brought in each year with a higher income tax rate of between 42 per cent and 47 per cent for people earning over 100,000.


Tax Revenue 2013

Local Property Tax brought in 318 million in 2013.




Corporation Tax

Corporation Tax for Accounting Period 2008 in million:


The Revenue is notified of trading profits of 65 billion. Yet it only receives a mere 3.9 billion in tax. This represents an effective tax rate of six percent. In other words, companies pay less than half the official tax rate.


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Poorest 10% of households pay higher proportion of income in tax than richest 10%
New research on the total amount of tax Irish people pay finds that the poorest 10% of households pay a larger share of their income in tax than the richest 10%. 

When income tax and indirect taxes such as VAT are included in the calculations the study conducted by the Nevin Economic Research Institute finds that:
  • The poorest 10% of households pay just over 30% of their income in taxes - mostly in the form of indirect taxes levied on the things they spend money on.
  • The richest 10% spend 29.5% of their income on tax - mostly in the form of direct income tax.
The combined tax burden produces a u-shaped graph, with the bottom and top of the income distribution paying most, and those on lower middle incomes paying least.
The research was conducted by Dr Michel Collins, a former member of the Commission on Taxation.  It highlights the importance of Government thinking more broadly when considering changes to taxation.  The whole system needs to be addressed when changes are being made, not just the income tax system.




Our Own 1 Percent

So what about our own home-grown 1 percent?  How much wealth do they own wealth that translates into economic and political power?  The Credit Suisses Global Wealth Data Handbook 2011 (not yet available free on-line) can give us an insight as they estimate the concentration of wealth holdings in the top percent deciles.




Irish concentration of wealth is one of the highest in the EU-15.  28 percent of all wealth housing and financial wealth is owned by the top 1 percent of adults.  Thats a lot wealth for a handful of people.
While Credit Suisse uses US $ in their tables, we can take their proportions to estimate how much this means in Euros and cents.  They estimate that financial wealth makes up 47 percent of all wealth.  Using CSO data, we therefore find the following:
  • The Top 1 percent is made up of approximately 36,000 adults. 
  • This group owns approximately 130.2 billion.
130.2 billion.  Just take a moment to reflect on that.
[Pause for quiet reflection on the amount of wealth owned by 36,000 adults in Ireland]
On average, this means that every adult in the top 1 percent owns 3.8 million.



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A wealth tax for Ireland: The Sinn Fin proposal

The state operated a wealth tax from 1975. However while the initial legislation was quite strong, the Fine Gael Labour government of the day bowed to pressure and included a large number of exemptions in the final act.

As a result the yield was low. The legislation was repealed in 1978.

The ESRI study produced a detailed research paper into the design and operation of the wealth tax in 1985. The report said that, Opponents of the Wealth Tax argued that it had detrimental effects especially on investment, but there is no convincing evidence to support this contention.

However the study also concluded that the cost of administering the tax was exceptionally high. The most effective way to avoid this key concern of the ESRI report is to make any wealth tax self-assessed.

What Assets Are Included?
All income and savings
Stocks and shares and all other financial products in public companies
Shares in private non-trading companies
Second and subsequent homes including holiday homes
Personal possessions including art, cars, boats, planes, jewellery, gold

How much would Sinn Fins wealth tax raise?

In a Dil debate in 2011, Minister for Finance Michael Noonan estimated that a French-type wealth tax implemented here would raise between 400million and 500million in a full tax year. Since then the French government has strengthened the legislation underpinning their wealth tax and expect the annual yield to double.
Based on data from the Central Bank, the CSO and Capgemini World Wealth Report, Sinn Fin has estimated that a wealth tax could bring in up to 0.5% of GDP or 800 million in a full tax year.





Moving the Faberge egg abroad is why wealth tax won't work

A levy on the super rich often only scares away the people who create jobs and wealth

Here in Ireland, Sinn Fein has often called for a tax on the super rich and Francois Hollande has introduced one in France creating tax exiles out of well-known French citizens such as Gerard Depardieu, members of the Peugeot family or Chanel's owners.

Earlier this year, the Bundesbank and the International Monetary Fund joined the fray when they both called for some sort of one-off wealth tax in countries, like Ireland, which effectively went bust. Indeed, in the Cyprus bailout there really was a one-off tax on anybody with substantial bank savings; a precedent likely to be repeated in future bailouts.

Capital in the Twenty-First Century, the unexpected US bestseller by Thomas Piketty is only the latest in a long line of economic tracts to offer some sort of intellectual argument underpinning wealth tax.

In the last century, wealth taxes were also popular with economists as varied as Joseph Schumpeter and John Maynard Keynes although the latter changed his mind in later life.




Ireland's top tax rate just 'nonsense', says Piketty
Nobel-tipped economist argues for redrawing tax based on 'real' wealth

His solution is steeply rising taxes on wealth and high incomes. The top rate on earnings above 2m a year could reach 80 per cent, with different high rates at 500,000 and 1m a year. He blames low tax rates he includes the 52 per cent rate in Ireland for the explosion in top salaries for bankers and senior executives.

"If you're paying 50 per cent, it is well worth getting a 1m pay rise. If 80 per cent is going to go on tax, it changes the whole situation.
"That was the ratio in Britain when it had taxes of this level in the Sixties. The USA also did it in the Thirties, although continental European countries never went that high.
"The extraordinary thing from my data is that the share of wealth belonging to the top 10 per cent in France is the same as it was before the Revolution. It is as if the ancien regime had never come to an end."

But he is shocked that the Irish top rate kicks in at below-average earnings.
"That is nonsense. You have to be very careful about the marginal rate that you apply to particular incomes," he said.

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(Deposit Interest Retention Tax)

DIRT rates 2008 - 2014


What is DIRT?

"Deposit interest retention tax (DIRT) is a form of tax on interest earned on bank accounts in Republic of Ireland that was first introduced in the 1980s. In Ireland, income from any source is reckonable for taxation purposes.

The Revenue Commissioners believed that the large majority of interest earners were declining to report it and that the most efficient method to collect at least the basic rate tax would be to deduct it at source. After PAYE, it was Ireland's second experience of a withholding tax.

DIRT is deducted at source by financial institutions. The rate of DIRT (since Jan. 2013) is 33% up until the 2014 budget which it now stands at 41%, except where interest cannot be calculated at least annually and cannot be determined until it is paid, in which case it is 36%."

"Deposit Interest Retention Tax (D.I.R.T.), at the rate of 33% (from the 1st January 2013) is deducted at source by deposit takers (e.g. banks, building societies, Credit Unions, Post Office Savings Bank, etc.) from interest paid or credited on deposits of Irish residents.

The above D.I.R.T. rate was:

30% for the period 1st January 2012 to the 31st December 2012
27% for the period 1st January 2011 to the 31st December 2011
25% for the period 8th April 2009 to the 31st December 2010
23% for the period 1st January 2009 to the 7th April 2009 and
20% for the period 1st Janury 2002 to the 31st December 2008

DIRT tax on savings interest to rise to 41 per cent

Oct 15 2013

"The measure means those saving money will have to hand 41 back to the state for every 100 in interest they accrue.

FINANCE MINISTER MICHAEL Noonan has confirmed an increase in the rate of annual DIRT tax applied to savings interest, from 33 per cent to 41 per cent.

It means those saving money will have to hand 41 back to the state for every 100 in interest they accrue.

Aimed at convincing people to spend money rather than sit on large sums, the move has been criticised by accountants Grant Thornton which says is may encourage people to try and evade the payment:

The DIRT tax on savings has now gone from 20 per cent to 41 per cent in a short period of time, partner with the firm Peter Vale said.

Whilst the move may encourage people to stop hoarding cash and invest in more productive assets, it also increases the likelihood of greater non compliance in terms of returning details of interest income to Revenue."


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Productivity 1998 - 2012



"Preliminary data from the US Bureau of Economic Analysis (BEA) on majority-owned foreign affiliates of US firms show that in 2010 (latest available), Irish-based firms reported net income of $95.6bn and a payroll count of 98,500, which gives profits per employee of $970,000.

In one recent year, the profits per employee at US-owned companies in Ireland were at $970,000 while the corporate tax paid in Ireland was about $25,000 (19,000)."


Multinational Profit Per Employee 2009
(MNC - Multi National Corporation)



"Ireland is not just a league-leader, it is off the chart.

MNCs here make more than four times the profit per employee than the average of the other EU-15 countries reporting (no data for Belgium or Greece).

No wonder more and more multi-nationals are making Ireland their home.

It should be noted that this Eurostat data does not include the financial sector, so the massive profits being made in the IFSC are not included. Nor does the above include taxation."



Labour Productivity Levels in Europe 2012



"The labour productivity level of Ireland is one of highest in Europe. OECD, 2012."


Multinational Profit Per Employee 2009
(MNC - Multi National Corporation)


"In the Manufacturing sector, MNC profitability in Ireland is nearly 10 times that of MNCs in other countries.

In the Information & Communication, the ratio is more than three-to-one."


Multinational Profit Per Employee 2009
(MNC - Multi National Corporation)


"In each of these sectors particularly retail and transport MNC profits in Ireland significantly exceed the average of other countries.

Only in two sectors the Professional & Scientific and Accommodation is MNC profit in Ireland lower than the average of other EU countries. These two sectors, however, are relatively small, making up less than two per cent of the turnover of all MNCs in Ireland."


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'Forbes names Ireland as best country for business'

Colin Gleeson Thu, Dec 5, 2013,

"Article in influential US magazine says economic downturn has made Ireland more attractive.

Ireland has for the first time been named as the best country for business in rankings carried out by renowned US financial magazine Forbes.

Ireland has moved up from sixth position in the influential rankings last year. The rankings are determined by grading 145 nations on 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance.

Each category is equally weighted and the data comes from published reports from the following organisations: Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, World Bank and World Economic Forum.

In an article announcing the results of the rankings, Forbes describe Ireland as having been devastated by the recession and in receipt of an 85 billion bailout to prop up the banking system.

Despite these economic troubles, Ireland still maintains an extremely pro-business environment that has attracted investments by some of the worlds biggest companies over the past decade, says the magazine.

Ireland scored well across the board when measuring its business friendliness. It is the only nation that ranks among the top 15 per cent of countries in every one of the 11 metrics we examined to gauge the best countries, says the article.

Ireland ranked near the very top for low tax burden, investor protection and personal freedom.

The article quotes Moodys Analytics economist Melanie Bowler who specialises on Ireland. She says Ireland has continued to attract direct foreign investment despite its problems.

She highlights the educated workforce and 12.5 per cent corporate tax rate as big draws for companies, as well as the language factor. You want to have a common language if you are setting up operations in Europe, she says.

Dublin has already established itself as a location for multinationals, so it has the necessary infrastructure for other companies to easily move into the country and set up shop.

The article in Forbes also says the States recent troubles have made it more attractive for companies moving in.

Nominal wages fell 17 per cent between 2008 and 2011, which helped keep labour costs in check. Unemployment remains stubbornly high a recent 12.8 per cent providing companies a large labour pool to pick from.

There are now more than 1,000 overseas companies with a presence in Ireland and they employ 150,000 of the nations 1.9 million workers.

New Zealand placed second in the rankings down from first place last year while Hong Kong completed the top three.

Minister for Jobs, Enterprise and Innovation Richard Bruton said the finding by Forbes was a testament to the hard work and innovation of Irish businesses and workers.

Speaking from Indonesia where he is attending the World Trade Organisation ministerial conference, he said: It is the latest in a range of indicators which shows that the environment for business here is steadily improving, and shows that the hard work and sacrifices of so many people are yielding tangible results in terms of international competitiveness and the jobs we so badly need."

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Expenditure: Current / Capital


What is Current Expenditure?

Current expenditure is recurring spending or, in other words, spending on items that are consumed and only last a limited period of time.

They are items that are used up in the process of providing a good or service.

In the case of the government, current expenditure would include wages and salaries and expenditure on consumables - stationery, drugs for health service, bandages and so on.


What is Capital Expenditure?

Capital expenditure is spending on assets.

It is the purchase of items that will last and will be used time and time again in the provision of a good or service.

In the case of the government, examples would be the building of a new hospital, the purchase of new computer equipment or networks, building new roads and so on.


What is Gross domestic product (GDP) ?

Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time.

GDP per capita is often considered an indicator of a country's standard of living.



Gross Current Expenditure 2012


In 2012 the Irish government spent 52bn on Gross Current Expenditure.


Gross Current Expenditure 2012


Capital Expenditure 1997 - 2012
[Table 1.6]



"Table 1.6 shows annual capital expenditure by the state from 1997 to 2012.

The peak in capital expenditure was in 2008 when 9bn was spent and has fallen to under 4bn in 2012 representing a fall in capital expenditure of 56%.

Capital expenditure was reduced by a further 0.55bn in Budget 2013 and an additional 0.1bn in savings via capital expenditure is planned for Budget 2014."

Capital Expenditure peaked in 2008 but has been in decline since due to cutbacks.

Irish Government income and expenditure,
2010-2015 (scenario), bn

Major income and expenditure items,
2005-2015 (scenario), bn

 DSFA = spending by the Dept of Social & Family Affairs
GVC refers to Gross Voted Current expenditure
GVCap refers to Gross Voted Capital expenditure
(All spending by the Government is either gross or net, voted or non-voted and current or capital.)


What is Voted and Non-Voted expenditure?

Voted expenditure is essentially the money allocated to government departments and offices. Non-voted expenditure is money that is spent under specific legislation and does not require a separate vote.


What will Irelands government finances be like in 2015? A five-year view on the Budget
22 Dec 2009 [Ronan Lyons]

"What will Irelands government finances look like in 2015, though? Will we be back in Maastricht territory, with a Budget deficit of less than 3%? What about our national debt? And how tough will the next five Budgets be? To understand that, its necessary to go right back to basics with Irelands finances.

For example, we all know that the Government will take in just 34bn this year while spending over 60bn, right? Wrong! Those figures are net figures, it turns out. To go back to basics, we need to look at the gross figures, i.e. count receipts such as PRSI and health levies as part of income, as opposed to netting them off against government expenditure. Doing that, total receipts for 2009 come to just over 50bn, while total expenditure will top 76bn.

By coincidence, total receipts for 2005 were also just over 50bn, giving us an appropriate year to compare ourselves to. The distinction between gross and net turns out to be an important one, because it reveals how the Governments funding sources have changed.

Whereas PRSI, other levies (such as the health levy) and what is classed as non-tax revenue brought in about 10bn in 2005, Budget 2010 estimates that these sources will bring in over 17bn a staggering 70% increase. (The governments income going up? Now, theres a headline you wont read in the papers!)

Meanwhile, indirect, direct and other taxes (other includes stamp duties and capital taxes) have fallen during the same period from just under 40bn in 2005 (they actually peaked in 2007 at 47bn) to about 32bn in 2009 and 2010.

It is in expenditure, however, where the real changes have occurred. In 2005, instead of 69bn, total expenditure by the Government was 51bn. To repeat, whereas the Governments total income next year will be the same as in 2005, expenditure will be more than one third higher.

Of the 18bn increase in spending, half has come from gross spending on social welfare. Most of the remaning increase (a further 7bn) has come from other current expenditure areas, most notably health and education.

Its worth pointing out that all the money spent on social welfare and the vast majority of the money spent on health and education goes in the form of someone elses income."

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Expenditure Trends 1997 - 2013
Current and Capital



"Gross voted public expenditure for the period 1997 to 2013 is summarised in the table above. The figures represent all current and capital spending by Government Departments and some of their agencies, including spending from the Social Insurance Fund, but does not include non-voted spending directly from the Central Fund such as debt-servicing costs.

All figures are actual outturn figures, apart from the figures for 2013 which are in line with the Revised Estimates published in April 2013, and the 2012 figures which are the provisional outturn figures as also published in the Revised Estimates in April 2013. The year-on-year percentage variations are also shown."

Gross Public Expenditure peaked in 2009 but has been in decline since due to cutbacks.

"Both the Fianna Fil and Fine Gael-Labour governments have set out to severely curb the spending of the public sector. A glance at any of the leading newspapers or other media demonstrates that there is an overwhelming consensus that public spending must be cut. Implicitly, and often explicitly, an unsustainable level of public spending is held to be the cause of the current crisis.

That this nonsense has such traction in the public debate tells us more about the society in which that debate is being conducted than about the economy itself. Prior to the crisis, the level of public spending was 36.7 per cent of GDP in 2007, nearly 10 percentage points lower than the euro area average of 46 per cent."



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Underlying General Government Balance 2007-2016 Forecast
[Table 1.7]



"Since 2008, the public finances have come under increased strain due to a collapse of tax revenues and an increase in expenditure on social transfers and debt servicing costs.

Table 1.7 depicts the deterioration of the underlying General Government Balance (i.e. excluding once-off bank recapitalisation costs) from a small surplus in 2007 to a large deficit of -11.5% in 2009."


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Social Transfers: Insurance/Assistance


What are Social Transfers?


Social Insurance Transfers 2007 - 2012


Social Assistance Transfers 2007 - 2012


Here we can see the relative increase and decrease of the values of Pensions, Benefits and Allowances between the years 2007 - 2012.

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'Half of Ireland's population on welfare'




'Irish Budget 2014: Half of Ireland's population on welfare'
By Michael Hennigan
Sep 2, 2013

"Half of Ireland's population is on welfare and when recipients of child benefit, farmers dependent on public subsidies which are effectively welfare, accounting for 81% of average farm income in 2012; legal services costing the state about a half billion euros annually; public payments to doctors; a raft of corporate welfare schemes and the public service itself, [...] in Ireland there is a shining example of the halfway house known as [...] dependency on the State.

This year, the Department of Social Protection will spend over 20.24bn on its entire range of schemes, services, and administration. At the end of May, there were 1.476m people receiving a weekly payment in respect of 2.283m beneficiaries. In addition, some 614,000 families were in receipt of the monthly child benefit payment.

The CSO estimated that the total population was at 4.593m in April 2013."


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Gross Fixed Capital Formation


What is Gross Fixed Capital Formation?

Gross fixed capital formation (formerly gross domestic fixed investment) includes land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings.


Gross Fixed Capital Formation 1970 - 2011
(in $s)


Decline from $66bn in 2007 to $22bn in 2011.


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Gross Fixed Capital Formation 1995 - 2012
(in Euros)



"Across the OECD, the decline in investment (gross fixed capital formation) accounts for 99 per cent of the total loss in output during the recession.

In the Irish economy, investment has fallen throughout the recession and is now 27.6 billion lower than prior to the recession.

Since GDP has fallen by 27.7 billion, the entire slump is driven by the collapse in investment. [...]

Therefore, the private sectors investment strike is responsible for the Irish depression."

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Business Investment Rate

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National Debt /
General Government Debt

 National Debt of Ireland
Ireland Debt Clock


What is the difference between National Debt and General Government Debt (GG Debt)?

National Debt differs from the General Government Debt (GG Debt, which is the standard measure used within the EU for comparative purposes.

General Government Debt includes the National Debt as well as Local Government debt and some other minor liabilities of Government.



Irish Debt 1923 - 1942

Irish Debt 1980 - 2010

Irish Debt as % of GDP


General Government Debt 2007 - 2016



High GDP ratios predicted for 2014 - 2016 period.



General Government (GG) Debt and
National Debt 1990 - 2012



In 2012 the  General Government debt was 192.5bn, up from 47.2bn in 2007.


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Projected General Government Debt 2012 - 2016



In 2013 the Irish government expects the General Government debt to reach 205.9bn, 124.1% of GDP.



General Government (GG) Interest and
National Debt Interest 1990 - 2012


In 2012 the Irish government spent 15.5% of Tax Revenue on National Debt interest.



National Debt 1995 -2013

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National Debt interest 1995-2013


Ireland Debt Clock
(2 October 2014)


Interest per year:



Interest per second:

Citizen's Share:

Debt as % of GDP:

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Budget Deficits

"Underlying" deficits 2007 - 2015

underlying deficits (deficits excluding direct payments to banks)

[Underlying Balance = Primary Balance + Cash Interest + Promissory Note Interest]



'Budget deficit third biggest in EU at 13.5bn'

Tuesday, October 22, 2013
By Geoff Percival

"Irelands budget deficit for 2012 has been revised upwards from 12.5bn to just over 13.5bn making it the third largest in the EU.

The new figure means that the deficit represented 8.2% of GDP rather than the 7.6% estimated back in April. According to the CSO, the revision arose mainly from Government revenue from mobile phone licence sales being initially recorded for 2012, rather than for 2013.

While the 8.2% figure is higher than first anticipated, it is still a vast improvement on the 2011 deficit of 21.36bn; which amounted to 13.1% of GDP. Furthermore, it was still better than the 8.6% of GDP target set by the troika for 2012.

Final annual data, published yesterday by Eurostat, the EUs statistical agency, showed only Spain and Greece as having a higher budget deficit than Ireland last year. While Spains jumped from 9.6% of GDP to 10.6%; Greeces actually lowered from 9.5% in 2011 to 9% for last year.

While 15 member states saw their deficits improve last year, one remained stable and 12 saw a worsening. Sweden, Estonia, Luxembourg and Bulgaria had the lowest deficits ranging from 0.2% of GDP to 0.8%. Britain recorded a deficit of 6.1% of GDP; down from 7.7% in 2011. Germany, meanwhile, was the only EU nation to deliver a government surplus. Seventeen member states had deficits higher than 3% of GDP.

Eurostat also noted that as of the end of 2012, the lowest ratios of government debt to GDP were recorded in Estonia, Bulgaria, Luxembourg and Romania; with the highest observed in Greece, Italy, Portugal and Ireland (117.4%, up from 104.1% in 2011). The eurozones deficit stood at 3.7% of GDP, with the EU, as a whole, 3.9%.

The Governments official deficit target, for 2013, has been set at 7.4% of GDP, with some commentators suggesting it should marginally beat that.

Irelands strategy in the past couple of years has been to under-promise and over-deliver on its budgetary targets, a trend that we believe is likely to be maintained in 2013. Despite the fact that the risks to the Governments economic growth projections are clearly to the downside at this juncture, we still think that come end-December the budget deficit out-turn as a percentage of GDP will once more be lower than the 7.4% figure officially targeted, as the Department of Finance has allowed itself plenty of leeway. Our forecast is for a marginally lower figure of 7.3%, said Alan McQuaid of Merrion Stockbrokers."

"The Dept [of Finance] is forecasting a general government budget deficit of 12.65 billion in 2013, or 7.5% of GDP, below the expected budget deficit of 13.3 billion or 8.2% of GDP for 2012. The decline in the budget deficit would be more pronounced in 2013 but for the fact that sizeable interest payments totalling almost 2 billion begin to fall due on the Promissory Note Programme. This will boost the budget deficit by 1.1% in 2013.

In its Medium Term Fiscal Statement published last month, the government projected that over 5 billion of further fiscal consolidation measures will be required in 2014 and 2015 to reduce the budget deficit to under 3% of GDP by 2015. These will consist of additional spending cuts of some 3.3 billion and tax increases of 1.8 billion."


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2012, the year when interest repayments became 50% of the deficit borrowings...


If we look at Gross Current Expenditure 2012

Gross Current Expenditure 2012

above we see a total of 52.13bn. We see the same

Expenditure Trends 1997 - 2013


above in Expenditure Trends 1997 - 2013. In the same table we see Capital expenditure, 3.7bn added to the 52.13bn get total expenditure of 55.83bn.

Now we add the total income received, 36.65bn [see Tax Revenue 2011 - 2012

Tax Revenue 2011 - 2012

above], to the negative amount spent.

-55.83bn [spent] +
36.65bn[tax income] = -19.18bn [the Deficit]

According to "Underlying" deficits 2007 - 2015

"Underlying" deficits 2007 - 2015
underlying deficits (deficits excluding direct payments to banks)
[Underlying Balance = Primary Balance + Cash Interest + Promissory Note Interest]

the underlying balance in 2012 is -13.5bn. If underlying deficits (deficits excluding direct payments to banks) then the difference between -19.18bn and -13.5bn = -5.68bn, then presumably 5.68bn was given to the banks.

If the -13.5bn 'underlying' deficit in 2012 was made up of -6.8bn [Primary Balance] and -6.7bn [Cash Interest] then we can see that interest repayments grew to become 50% of the deficit compared to 2008 when the Primary Balance was -10.8bn and the Cash Interest -2.4bn.

In other words, as we borrow money to cover the deficit, then a larger and larger percentage is being borrowed just to pay the interest on the debt.

If we look at the deficit figures projected for 2014 we can see that all the money to be borrowed, 8.3bn, is to be spent on interest repayments.

In 2015 it is projected that all the money borrowed, 5bn, will pay for some of the interest repayments with tax revenue covering the rest.

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Banks / Bonds / Promissory Notes


What is a Promissory Note?

A promissory note is a legal instrument (more particularly, a financial instrument), in which one party (the maker or issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.

Implications for Promissory Notes

The Irish Times Oct 10, 2013
'Promissory note law could involve limitless public monies'
Note in favour of EBS provides Minister can adjust sum paid upwards or downwards, court told

"The Minister for Finance used powers under a 2008 emergency law to create a promissory note in 2010 which can be adjusted to allow for the payment of possibly limitless amounts of public monies, the High Court was told today.

John Rogers SC said the promissory note issued in favour of the Educational Building Society, under which 250 million was paid to the Society earlier this year, provides the Minister can adjust the sum to be paid either upwards or downwards and permits the creation of very significant, possibly limitless liabilities for the taxpayer.

The sums involved were certainly not predictable when the note was created in June 2010, he added.

Mr Rogers was continuing his arguments on behalf of United Left TD Joan Collins in the continuing hearing of her challenge to the making of promissory notes in 2010 in favour of Anglo Irish Bank, EBS and Irish Nationwide Building Society as part of the 31 billion capitalisation of those institutions.

Ms Collins argues the making of the notes, under the provisions of the Credit Institutions Financial Stabilisation Act 2008, which he said appeared to have been emergency legislation, was unlawful because it involved the Minister appropriating public monies for expenditure when, under the Constitution, such appropriation was solely a matter for the Dil.

The State denies the claims and argues the TDs case is based on a fundamental misunderstanding of the relevant constitutional provisions.

The court has heard, following the liquidation of Irish Bank Resolution Corporation (formerly Anglo) last February, that the 25 billion promissory note issued to that bank was exchanged for Government bonds due to mature after periods of between 25 and 40 years.

Mr Rogers argued today, given his sides claim the promissory notes are illegal, those bonds cannot be valid.

Because the action raises important constitutional issues with implications for the entire basis of the States funding, it is being heard by a three-judge court comprising Mr Justice Peter Kelly, Ms Justice Mary Finlay Geoghegan and Mr Justice Gerard Hogan.

The hearing continues."


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What are Government Bonds?

A government bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date.

Government bonds are usually denominated in the country's own currency.

Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds, although the term "sovereign bond" may also refer to bonds issued in a country's own currency.

The terms on which a government can sell bonds depend on how creditworthy the market considers it to be. International credit rating agencies will provide ratings for the bonds, but market participants will make up their own minds about this.

Sample Bond: 'IE0006857530' issued 11 May 1999

Treasury Bond    Issue Date         Maturity Date      Coupon Date       ISIN Code
4.6% 2016             11 May 1999      18 Apr. 2016        18 Apr.                   IE0006857530

National Treasury Management Agency
4.60% Treasury Bond 2016
Issue to take place on 11th May, 1999
See Overleaf for Conditions
ISIN Code: IE0006857530
National Treasury Management Agency
10th May, 1999


The principal and interest of the above bond, which is issued under the authority of the Finance Act, 1970 and other statutes, will be charged on the Central Fund.

Purpose of Issue: The proceeds of the issue will be used for general financing purposes of the Exchequer.

Trustee Status: The bond is an authorised trustee investment and trustees may invest in the bond even if the price at time of investment exceeds the redemption value of 100 per cent.

Taxation: Interest on the bond will be paid gross without deduction of income tax or any other deductions or withholdings.

In general, where the holder of the bond is an Irish resident taxpayer, the interest element payable on the bond is assessable to income tax, whereas any gains arising on disposal of the bond are exempt from capital gains tax. However, where the bond holder resident in Ireland is dealing in Government bonds as part of a trade, he/she is assessable to income tax or corporation tax, as the case may be, in respect of the interest element and also the gains arising on disposal or on redemption of the bond.

Section 43 of the Taxes Consolidation Act, 1997 provides that the bond and the interest payable thereon is exempt from all Irish taxation so long as it is shown that the bond is in the beneficial ownership of a person not ordinarily resident in Ireland. However, where the bond is held by or for an Irish branch or agency of a foreign financial concern, interest and gains on such stock will be chargeable to tax.

Individual purchasers should note that, where the bond is the subject of a gift or inheritance, the conditions for exemption set out in Section 57 of the Capital Acquisitions Tax Act, 1976, as amended by Section 40 of the Finance Act, 1978 are met.

In addition, the execution of instruments for the issue and the transfer of the bond will be free of Irish stamp duty.

Interest: Interest on the bond will be paid annually on 18th April. The first interest payment will be made on 18th April, 2000 and be at a rate of 4.2732%. Interest payable will be calculated in accordance with the actual / actual day count convention.

The interest payable on each interest payment date will be based on the balance in the account (s) on the register maintained by the Central Bank of Ireland, as at close of business on the preceding business day.

Principal: The principal of the bond will be repaid at par on 18th April, 2016.

Account: It is a condition of this bond that registered holder(s) shall nominate an account in a credit institution linked to the European System of Central Banks Payment System (TARGET) into which all dividend/redemption payments will be made. Details of the account to which such payments are to be made must be provided to the Central Bank of Ireland (as Registrar) on the appropriate form, which is available from the Bank, by close of business (5.00pm) on the day of registration of the holding. Holders must notify the Registrar of any change in account details through completion and lodgment of a further copy of the form.

Registration and Transfer: The register of holders of this bond issue will be kept at the Central Bank of Ireland. Stock Certificates shall not be issued. Transfer of ownership will be evidenced by book entry in the register of holders held by the Registrar in any sums which are multiples of one cent.

Stock Exchange Listing: The bond will be officially listed on the Irish Stock Exchange.


Same Sample Bond: ['IE0006857530'
issued 11 May 1999]
26 November 2013

Irish Government Euro Denominated Bonds Outstanding Tuesday 26 November 2013

Daily outstanding report [

Bond Title                      Bond Type   ISIN                         Maturity Date   Outstanding (m)
4.6 Treas Bnd 2016     FRB                IE0006857530      18-Apr-16           10,168.45

[FRB = Conventional Fixed Rate Bullet Bond]

What is an ISIN?
An International Securities Identification Number (ISIN) uniquely identifies a security. Its structure is defined in ISO 6166. Securities for which ISINs are issued include bonds, commercial paper, stocks and warrants. The ISIN code is a 12-character alpha-numerical code that does not contain information characterizing financial instruments but serves for uniform identification of a security at trading and settlement.


Government Bonds 2011 - 2013


At end June 2013 55% of Government bonds are owned by non-residents.

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Current Bonds 3 Year Debt Summary 2013/2014/2015


Year  Bank Bonds [Promissory Notes  +Gov Bonds  + IMF/EU  = Total/Govt Debt]  Govt Deficit   Total


3,100,000,000 6,100,000,000


9,100,000,000 14,500,000,000 40,973,468,897
2014 5,879,626,024 3,100,000,000 8,200,000,000


11,300,000,000 10,400,000,000 27,579,626,024
2015 11,649,122,967 3,100,000,000 3,600,000,000 6,700,000,000 13,400,000,000 6,800,000,000 31,849,122,967



Thursday, 27 December 2012
THE DIRTY DOZEN w/e Dec 30th 2012
"Final week of 2012 and boy, was it a good year to be bondholder in an Irish bank. The last of the 20+ billion will be paid out this Friday, Dec 28th, a bond of nearly 40 million, unsecured, from Bank of Ireland - more very happy failed punters cashing in at our expense. I wonder, whatever happened to that much trumpeted separation of bank and sovereign debt agreed to last June?

Anyway, Happy New Year to you all, though that much is already guaranteed for those whose bonds 'mature' in 2013, 17bn in total in 2013. Add that to the 9bn in government bonds that fall due in 2013, throw in the projected budget deficit of 14.5bn and lads - we'd better get down to work. That's a hell of a lot of additional debt on top of the debt we already have, don't ye think?"



"1 billion notes"

   Back to Top [1 October 2012]

'AIB repays 1 billion to unsecured bondholders today'
More than 18 billion has been repaid to bondholders by state-owned Irish banks this year.

"BAILED-OUT ALLIED Irish Banks (AIB) will today repay 1 billion in unsecured debt to senior bondholders.

In a move effectively financed by the State, the money will bring to more than 18 billion the amount that Irish banks have repaid to bondholders this year as a result of the bank guarantee introduced in 2008.

It is the last payment that is due to AIB, which is 99.8 per cent owned by the State, this year but there will be a number of other payments made to unsecured bondholders in State-0wned banks before the end of the year.

Another 2 billion is due to bondholders before the end of the year in Anglo Irish Bank, Bank of Ireland, EBS building society, and Irish Life and Permanent. A further 17 billion will be handed over next year.

Protesters from Sinn Fin and the Campaign against Household and Water Taxes are due to demonstrate against the bond repayment in Dublin later today.

Independent TD Stephen Donnelly, who has been heavily critical of bondholder repayments, has been handing out 1 billion notes at Dart stations in Dublin today in a bid to highlight the issue.

The notes, which were produced in conjunction graphic designer Con Kennedy, feature Finance Minister Michael Noonan on the front and a brief note explaining what is happening on the back."



EU / IMF Programme Summary


"The Government agreed, on 28 November 2010, to a three-year 85 billion financial support programme for Ireland by the EU and IMF. The States contribution to the programme will be 17.5 billion while the external support will amount to 67.5 billion.

The external support under the programme comprises:

22.5 billion from the IMF Extended Fund Facility;
22.5 billion from the European Financial Stabilisation Mechanism; and
22.5 billion from the European Financial Stability Facility (17.7bn) and bilateral loans from the United Kingdom (3.8bn), Sweden (0.6bn) and Denmark (0.4bn)."

The Irish people will be paying back EU loans until 2042 and IMF loans until 2023


'What the IMF EU Bailout for Ireland means in detail!'

"The facility will be made up as follows:

35 billion to support the banking system;
10 billion for the immediate recapitalisation and
25 billion will be provided on a contingency basis.
50 billion will be provided to cover the financing of the State."

For more specific details of what the IMF EU Bailout for Ireland means in detail see:


Total Bonds Issued by Irish Banks 2007 - 2010



"Prior to the guarantee in September 2008 the quantity of bonds was beginning to decline.  This continued up until the summer of 2009 after which there was a stabilisation, and even a slight increase, in the bonds in issue. 

By April 2010 there was 111 billion of bank bonds (actually 6 billion more than in September 2008), but by the end of 2010 this had fallen to 64 billion a drop of over 47 billion.  Most of this money was fully repaid."


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Holders of Bonds Issued by Irish Banks 2007 - 2010

(Irish Residents, Other Eurozone Residents, and Rest of the World Residents)




"So who got the money?  The Central Bank breaks the total down by Irish, Other Eurozone and Rest of the World residents.

The biggest drop has occurred for bondholders from the rest of the world which stood at 74 billion in August 2008 and has dropped (or been repaid) by such an extent since the guarantee was introduced that it is now down to 20 billion. 

A drop of 54 billion since August 2008.  As late as last August there were 41 billion of bonds held by rest of the world residents but there was a reduction of 17 billion in September."



Bonds Held by Irish Residents 2007 - 2010

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"Irish residents have seen their holdings of Irish bank bonds rise from 25 billion at the time of the guarantee to 45 billion in April 2010.

Since then, these too have fallen and were down to 33 billion by December [2010].

The proportion of bond held by Irish residents has been rising since the guarantee was introduced and now stands at just over 50%. Are we going to burn ourselves?

Since the guarantee holdings of Irish bank bonds by other Eurozone residents has fallen from 17 billion to 10 billion. This would hardly leave a ripple on the European banking system.

This would similarly apply to the 20.5 billion held by residents of the rest of the world. Non-payment of the 33 billion owed to Irish residents would be far more significant."



Domestic ownership of Irish government bonds rises from 28% to 48% since 2012
By Finfacts Team

Domestic ownership of Irish government bonds rises from 28% to 48% since 2012
By Finfacts Team
Aug 13, 2014 - 3:01 PM

The domestic ownership of Irish government bonds rose from 28% at end 2012 to 48% in June 2014 and the biggest factor was the Central Bank's 2013 deal on the promissory note debt of ex-Anglo Irish Bank (renamed IBRC) -- see NTMA profile here - - the 2013 IBRC Promissory Note repayment (non-cash settlement) resulted in 25bn of long-dated Government bonds being issued to the Central Bank of Ireland on liquidation of IBRC.

The Central Bank said today that outstanding government bonds stood at 113.21bn in June 2014, with 11% due to mature in less than three years. At end-June 2014, resident holders held 47.7% of long-term Irish government bonds. resident credit institutions and the Central Bank of Ireland, account for 91% of resident holdings.

At the end of 1999, over 70% of Irish bonds were held by domestic investors with the balance in the hands of overseas investors. At end 2011 78% of Irelands MLT securities were held overseas according to the NTMA - the debt agency.

The resident non-bank financial sector reported holdings of 2.76bn in June 2014. The holders within this sector were predominately other financial intermediaries at 1.13bn (Chart 1).

32% of outstanding Government bonds will mature within the next 5 years. 27% of resident holders fall under this maturity category, while the equivalent ratio for non-resident holders is higher at 37%. Furthermore, 30% (or 17.7bn) of long-term bonds held by non-resident investors will mature from 2023 onwards (Chart 2).


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EU economics commissioner Olli Rehn
and Finance Minister Michael Noonan


What is the 25 billion 'backstop'?

'Noonan to meet Troika after Budget to discuss bailout exit'

12 October 2013

"FINANCE Minister Michael Noonan has hinted that Ireland might not have to apply for a precautionary credit line when it exits the bailout.

The Government has already indicated it might look for a 10bn credit buffer to guard against market shocks.

But Mr Noonan told the Fine Gael national conference the National Treasury Management Agency (NTMA) has built a 25bn fund which can act as a significant buffer after Ireland exits the bailout.

"If we never borrowed another bob, we're cash-funded into 2015," Mr Noonan said.

He was echoing similar comments made by EU economics commissioner Olli Rehn this week, who said Ireland might be able to exit the bailout without a precautionary arrangement.

Mr Noonan said he will start consulting with the Troika after the Budget on how to manage Irelands exit from the bailout.

Countries who have exited IMF Programmes have had follow up programmes or backstop arrangements to ensure a return to the markets at very little risk, he said.

Ireland is fortunate that the NTMA has almost 25 billion in cash balances as we return to the market so we have a backstop already in place."

'The NTMA strategy of hoarding cash'

January 24, 2013 by namawinelake

"The National Treasury Management Agency (NTMA) is presently sitting on a cash mountain of nearly 25bn. It places it on deposit in the Central Bank of Ireland and receives interest at a rate of just 0.1% per annum yes, just zero point one per cent! The 25bn is either borrowed or could be used to pay down borrowings which cost us an average of 3.5% per annum. In other words, this State is sitting on a cash mountain costing us 875m a year in interest and if you deduct the 25m we get from the Central Bank, in net terms this mountain of cash is costing is 850m! Per Year!

Now, there is a reason why the NTMA does keep a cash reserve. Ireland is in a precarious financial position with a general government deficit over 10bn per annum and our deficit: GDP was about 8% in 2012 which is horrendous. And at the end of 2013, the funding from the 67.5bn external bailout from the so-called Troika comes to an end. And we have colossal borrowings which we need to repay previously issued bonds and repayments to the Troika.

So the NTMA calculates that it needs some reserve or buffer. It calculates that if markets know there isnt such a buffer, then those markets will demand higher rates of interest than they otherwise would on new issuance of bonds. Which all seems rational.

So, were buying insurance for the funding of the State which is costing us 850m per annum."

'Ireland needs a new growth engine'

By Colm McCarthy

"The State's debts are already intimidating, approaching 200bn gross, with the risk of further liabilities emerging in the banks and huge unfunded pension liabilities. It is easy to forget that the State owns some financial assets too, mainly a large pile of cash (about 25bn) resting in the accounts of the Exchequer.

The cash, on deposit at tiny interest rates, arises because the government borrows in advance of actual requirements. The cash pile is surprisingly large right now, reflecting bond issues by the National Treasury Management Agency, which pays market interest rates when it borrows but earns substantially less on the funds deposited. This brings peace of mind but at serious cost - if more modest cash balances were chosen, there would be an interest saving running to several hundred million per annum.

It is not irrational to be a debtor while keeping cash on hand, up to a point. The gap between what you pay to borrow and what you earn on deposit is called the negative carry and is now up to three and four percent per annum on some of the cash pile."


Ajai Chopra and an IMF delegation

Ajai Chopra and an IMF delegation pass Anton Rostas from Romania as they make their way to the Central Bank
for crucial talks with the government in Dublin on November 18th, 2010.
Photograph: Peter Morrison/AP

What is the Troika?

"The term Troika, which comes from the Russian meaning 'group of three', was increasingly used during the eurozone crisis to describe the European Commission, International Monetary Fund and European Central Bank, who formed a group of international lenders that laid down stringent austerity measures when they provided bailouts, or promises of bailouts for indebted peripheral European states such as Ireland, Portugal and Greece in the financial crisis."

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What are Capital Markets?

"Capital markets are financial markets for the buying and selling of long-term debt- or equity-backed securities. These markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. Financial regulators, such as the UK's Bank of England (BoE) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their jurisdictions to protect investors against fraud, among other duties.

Modern capital markets are almost invariably hosted on computer-based electronic trading systems; most can be accessed only by entities within the financial sector or the treasury departments of governments and corporations, but some can be accessed directly by the public. There are many thousands of such systems, most serving only small parts of the overall capital markets.

Entities hosting the systems include stock exchanges, investment banks, and government departments. Physically the systems are hosted all over the world, though they tend to be concentrated in financial centres like London, New York, and Hong Kong. Capital markets are defined as markets in which money is provided for periods longer than a year.

A key division within the capital markets is between the primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors, often via a mechanism known as underwriting. The main entities seeking to raise long-term funds on the primary capital markets are governments (which may be municipal, local or national) and business enterprises (companies).

Governments tend to issue only bonds, whereas companies often issue either equity or bonds. The main entities purchasing the bonds or stock include pension funds, hedge funds, sovereign wealth funds, and less commonly wealthy individuals and investment banks trading on their own behalf. In the secondary markets, existing securities are sold and bought among investors or traders, usually on an exchange, over-the-counter, or elsewhere.

The existence of secondary markets increases the willingness of investors in primary markets, as they know they are likely to be able to swiftly cash out their investments if the need arises.

A second important division falls between the stock markets (for equity securities, also known as shares, where investors acquire ownership of companies) and the bond markets (where investors become creditors)."


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'Getting ready for a successful return to the bond markets'

'The NTMAs John Corrigan is cautiously optimistic about Irish plans to tap the market'

One of the key issues facing Ireland post bailout is whether we can achieve regular access to capital markets at sustainable interest rates to enable the Government to continue to meet the day-to-day running costs of the country.

We were locked out of markets in 2010 when the coupon on Irish sovereign bonds became unaffordable and the country was forced into raising 67.5 billion from the EU and IMF via a bailout programme.

Three years on, and the National Treasury Management Agency is poised to re-enter capital markets on a regular basis.

It has already had some success. In January it raised 2.5 billion in a bond that will mature in 2017. The interest rate was 3.32 per cent. In March the NTMA issued a 10-year bond at 4.15 per cent. This was the first 10-year issue by the agency since January 2010, and reflected improved sentiment towards Ireland as the economy continued to repair itself slowly and the country complied with the conditions of the troika bailout.

With Ireland exiting the bailout this month without the safety net that a precautionary credit line might have provided, what are the NTMAs plans to tap the market in 2014?

Agency chief executive John Corrigan says we will have about 20 billion in the kitty by the end of December. In addition, around 800 million remains to be drawn down from the troika early in the new year.

That should keep us going well into the first quarter of 2015, he says.

Bond redemption
Among other things, it will be used to meet a bond redemption in January for just shy of 7 billion.

Next month will see the NTMA reveal its plans for fundraising next year.

Well probably issue between 6 billion and 10 billion [next year], Corrigan explains. Well announce in January what the complexion of that is likely to be. Ideally, it will involve some auctions during the course of 2014 because the challenge is achieving a regular return to the markets on a sustainable basis.

We raised 7.5 billion in the bond markets [in 2013] but that funding was on an opportunistic basis. We sort of jumped out of the bushes when we thought it was right. We need to get into a pattern that shows we have regular access. Thats the key.

The NTMA plans to meet with primary dealers in London this month to gauge their views on Irelands return to capital markets. Its the primary dealers who are dealing with the markets on a day-to-day basis. They know whats likely to travel. If we were to do a syndicated issue in 2014 . . . five or so primary dealers would be drawn from this group [in London].

There will also be trades in short-term treasury bills, or T-bills as they are better known. These are typically 500 million in size with three-month maturities. Corrigan describes them as tactical funding.

Economy crashed
Irish bond yields are currently around 3.5 per cent, below the 4-4.5 per cent level that we would have been paying before the economy crashed when we were an AAA-rated country. This reflects the current low interest rate environment globally. What that tells you is that the bond markets are dislocated for all the reasons that are well rehearsed, he says. So it makes sense to lock in at the longer end [longer-dated debt].

Corrigan is more interested in the spread over German yields, which is about 175 basis points. This is the risk premium attaching to Ireland at present. The spread of 175 over Germany is not for nothing. Its not a risk-free investment.

Will the NTMA move early in the new year to secure funding while interest rates are so low? Well have to wait and see. You have to be very sure-footed. You never say youre going until youre absolutely certain youre going.

A key issue in a successful return to the markets would be a re-rating by Moodys of Ireland to investment grade. In September Moodys changed its outlook on Irelands sovereign rating to stable from negative but stopped short of moving us from its Ba1 sub-investment grade, which Corrigan says would have a number of benefits for us. Were just one notch away.

Its very important. The Asian investors, where we would have had a good following [before 2008], have been largely sidelined by the fact that Moodys has us at sub-investment grade. And there are odd pockets of investors around Europe as well whose mandates from clients would only allow them to invest when the credit rating is investment grade from the three main rating agencies. Thats the typical investment mandate that you have in Asia and the Far East.

The NTMA has been pounding the pavements in the past two months in Asia selling the Irish story to investors. Certainly theres appetite and its the marginal investor that can help your yield . . . so it is important.

Moodys recently moved Portugal to a stable outlook and its eurosceptic view appears to be softening. We see that as a positive, says Corrigan. It wasnt necessarily conditions in Ireland that were holding back Moodys but they had a take on the euro zone as a whole that was sceptical. We would be quietly hopeful.

The NTMA has used Minister for Finance Michael Noonan to help sell the Irish recovery story overseas. He regularly pops up on Bloomberg TV for interviews and attends investor sessions where possible.

Fitch was the first ratings agency to soften its view of Ireland and Corrigan believes the Ministers appearance at a meeting with them in Washington DC helped to seal the deal.

Hes a straight talking man. Thats one of the small-country advantages that we have. Ratings agencies wouldnt normally get access to the finance minister as they would with Ireland.

Its not all honey and jam. The general government debt is estimated to stand at 206 billion by the end of this year or 124 per cent of GDP. The cash interest cost of the national debt this year will be about 7.2 billion, rising to 8.2 billion in 2014.

What are the challenges that could scupper Irelands return to regular market funding?

Theres a lot of uncertainty still remaining in the euro zone, although the white heat surrounding it has calmed down.

We also have to see the unwinding of the quantitative easing in the United States, and we saw a trailer earlier this year of how the market might react if its not handled carefully.

Then we have the [euro zone] bank stress tests towards the back end of 2014. The deferral of the [Irish] stress tests to coincide with the euro zone-wide stress tests was seen as a positive by the investment community because it meant we werent being picked for special treatment. Nonetheless, theres a risk there.

Primary surplus
I dont believe well have an issue accessing the funds. The question is over time to continue to run a primary surplus that will get the debt-to-GDP level down to what is more acceptable to capital markets. Were committed to doing that anyway under the various EU protocols but that would reflect itself then in a narrowing of the spread [with German bonds].

Corrigan has no regrets about the decision to exit the bailout without a precautionary credit line in place.

We didnt need it anyway because if you got a credit line it only applies for 12 months. We have the cash in the bank [for the next 12 months], he says.

Hasnt he changed his tune? After all, only a few months ago he was talking about it being a good club for Ireland to have in its golf bag.

We would have discussed this with investors and with the ratings agencies and they were very relaxed about it. They see us as having been put through the ringer with stress tests and other troika measures.

They see us as having delivered on most if not all of the troika measures and we are in relatively good health.

But we are cautious people and that prompted me to say that it would have been a nice club to have in the bag. Overall, I think were in a good place and have a good story to tell."


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Trichet letter revealed: ECB threatened to stop emergency funding unless Ireland took bailout

Exclusive: Secret letter obtained by The Irish Times shows Brian Lenihan was told to seek bailout


(The Irish Times - Nov 6, 2014)

The European Central Bank (ECB) explicitly threatened in late November 2010 to cut off emergency funding from the Irish banking system, unless Ireland immediately applied for a bailout and agreed a programme of austerity and bank recapitalisation.

The letter from then ECB president, Jean-Claude Trichet, to former finance minister Brian Lenihan marked secret was sent on November 19th, 2010. A copy has been obtained by The Irish Times. Its publication is due to be considered at a meeting of the ECB governing council today.
The letter states that the governing council of the ECB would only agree to provide further emergency liquidity assistance (ELA) to the banks if it received in writing a commitment from the government to apply immediately for a bailout.

It said that the request for financial assistance had to contain a commitment to budget cutbacks and a restructuring of the financial sector.

Also, it said that the restructuring plan must include the provision of the necessary capital to the Irish banking system and that the government had to agree to underwrite the repayment of the ELA to the Central Bank.

ELA was special funding provided to the banks who no longer were able to draw down normal ECB lending. Around 50 billion had been extended to Irish banks at the time with additional funds approved by the ECB the day before.
A failure to continue this funding would have threatened their ability to stay open and provide cash to the public.

Swift response
The letter was sent the day after Central Bank governor Patrick Honohan appeared on Morning Ireland to say Ireland had no option but to apply for support. The ECB letter called for a swift response from the government.
Two days later, on November 21st, the formal application for the bailout was made.

The ECB council was due to consider the publication of the letter today, and it is thought they may also release earlier correspondence.

The ECB would be expected to argue that its financial exposure to Ireland and the risk that the money would not be repaid left it with no option but to try to secure its position. Critics will say that the ECB overstepped the mark in dictating to the government.




EFSM and EFSF Repayment Dates


'Blog: The Troika's leaving, but we're under their thumb until 2034'

"It's often overlooked but the Troika's entry to Ireland - and the terms and conditions of the subsequent Memorandum of Understanding between Ireland and its paylords - followed the negotiation of the national Stability Programme with the European Commission. That's the deal responsible for the 'Four Year Plan' - where the general framework of every Budget until 2014 - was originally mapped out.

That programme - and bear with me here, because this is where the terminology gets bonkers - is because Ireland is currently knees-deep in an 'Excessive Deficit Procedure' (EDP). In short, the gap between Ireland's income and its spending became so pronounced in 2008 and 2009 that the European Commission stepped in to take an overseeing role in how bad we were doing. A slow process

The EU's rules dictate that this happens when the budget deficit (i.e. the gap between spending and income) exceeds 3% of the total size of Ireland's economy. Basically - under treaties Ireland has voted to accept - the Commission gets to hang around and have input into the Budget process until we get the deficit below 3% again. This year it'll clock in at around 7.5%; next year it should be about 4.8%, and all going well we'll make it to 3% in 2015.

But all of this means the Commission still gets a hands-on role in scrutinising the shape of Budget 2015 until we get back to the 3% mark. At current rates, that'll mean an eighth successive austerity budget with adjustments of around 2.5bn.

And it's not over there. That 3% rule I just mentioned? Those goalposts were moved last year.

The Fiscal Compact (approved in a referendum last year) essentially requires every member state to limit their deficit to just 0.5% of the size of their economy. Ireland will get a few years' grace but we'll have to fall into line with that total by 2018 or 2019 at the latest. That means another three years of belt-tightening after 2015 before we're aimed at the new goalposts.

And wait: that's not even the half of it. Did you know you moved the goalposts?

Earlier this year the EU adopted the latest In a series of new rules on financial control, known as the 'two pack'. Its most potent symbol is the fact that the Budget is now announced in October, so that the European Commission has two months to scrutinise the figures.

Part of those rules dictate that countries emerging from an EU-IMF bailout have to open themselves to a little bit of extra scrutiny. In the EU's own words:

Until they have paid back a minimum of 75% of the assistance received, they will remain subject to new enhanced surveillance. This is to ensure a successful and durable return to the markets as well as fiscal sustainability, to the benefit of the individual Member State concerned as well as the euro area as a whole.

And this is the killer. If you go to the NTMA [National Treasury Management Agency]
website you'll see a list of the loans we've got from the two European bailout funds so far. Noting the repayment date for each (and adding seven years to each of the EFSM [European Financial Stabilisation Mechanism] repayment dates, because they haven't yet finalised the extention to the repayment period), this is the schedule we get for the EU side of things: [see table above].

The line I've shaded in is the important one. If Ireland stopped borrowing from the EU this instant, and went back to the market of its own volition, it would take until September 2034 to repay the requisite 75%.

And even then, because of the other two-pack rules, the Budget will forever have to be sent to Brussels for its final sign-off before it can be put into action.

So we might be saying goodbye to the Troika today... but we'll be welcoming the European Commission for further scrutiny for another two decades at the very least.

Best not roll up the red carpet just yet."


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National Pension Reserve Fund
spending on AIB, Bank of Ireland and IL&P

[IL&P (Irish Life and Permanent), Irish Bank Resolution Corporation (IBRC)]

"30.7 billion in promissory notes of which two installment payments have been made (or one made and one kinda-sorta-maybe made depending on your point of view) with many more to come.

20.7 billion from the NPRF has been invested in acquiring ownership stakes in AIB and Bank of Ireland.

11.4 billion of additional exchequer resources have been spent on IBRC, AIB and ILP [Irish Life and Permanent]."


Irish Bank Resolution Corporation (IBRC)

The Irish Bank Resolution Corporation (IBRC) was the name given to the entity formed in 2011 by the court-mandated merger of the state-owned banking institutions Anglo Irish Bank and Irish Nationwide Building Society.

Formed on 1 July 2011, following a High Court order on the application of the Minister for Finance Michael Noonan, the Irish government drove through overnight legislation to liquidate it in February 2013.


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What Is Irelands Bank Debt?
Karl Whelan June 2012

"The figure of 64 billion has been widely circulated as the cost of bailing out Irelands banks. The answer [from Michael Noonan] contains a handy table [above] and it shows the total figure at the slightly-lower 62.8 billion. Of this, 34.7 billion was supplied to the institutions that comprise the IBRC, while the other 28.1 billion was spent recapitalising and acquiring full ownership of AIB/EBS and Irish Life and Permanent and acquiring preference shares and a minority ordinary shareholding in Bank of Ireland.

IBRC was recapitalised with 30.7 billion in promissory notes and 4 billion in exchequer resources. 20.7 billion from the National Pension Reserve Fund was used to acquire preference and ordinary shares in AIB and Bank of Ireland. Additional exchequer resources were used to spend 4.7 billion on AIB and 2.7 billion on ILP."

Summary explanation for AIB, Bank of Ireland and IL&P (Caoimhghin Croidhein)

20.7 billion from the National Pension Reserve Fund was used to acquire preference and ordinary shares in AIB and Bank of Ireland plus additional exchequer resources were used to spend 4.7 billion on AIB.

[20.7bn + 4.7bn = 25.4bn]

The government invested 25.4 billion in acquiring the shareholdings in AIB and Bank of Ireland currently held by the NPRF [National Pension Reserve Fund].

Additional exchequer resources were used to spend  2.7 billion on IL&P (Irish Life and Permanent).

[25.4bn + 2.7bn = 28.1bn]


The Irish government has invested 28.1 billion in bank shares [June 2012]


"AIB, Bank of Ireland and Irish Life and Permanent

The government invested a combined 25.4 billion in acquiring the shareholdings in AIB and Bank of Ireland currently held by the NPRF. The NPRFs latest set of accounts [1st Qtr 2012] values these holdings at 9.36 billion. Those accounts dont break down the valuations between the two banks but these [NPRF] accounts from 2011:Q3 value the holdings at 9.6 billion, of which 7.1 billion is allocated to the ownership of AIB. The book value of equity in AIB at the end of 2011 was 14.6 billion. Given weak operating profits and ongoing loan loss writedowns, the NPRF valuation looks highly optimistic.

The government also own Irish Life and Permanent, which had equity with a book value of 3.5 billion at the end of 2011. Given the banks serious ongoing problems, Id be surprised if it had a market value much above zero.

So the Irish government has invested 28.1 billion in bank shares that are likely worth less than 9 billion now."


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Cost of European Banking Crisis 2007 - 2011
( million)

Cost of European Banking Crisis 2007 - 2011
(% of GDP)

Cost of European Banking Crisis per Capita
2007 - 2011 ()


How much has Ireland paid for the EU banking crisis?
Ireland has been declared a special case by Angela Merkel and these figures show exactly why, writes Michael Taft.

[Jan 2013]

"Yes, theres wee Ireland up at the top, just edging out Germany for the dubious title of spending the most on the banking crisis. 41 billion to date according to the Eurostat accounting data (this doesnt count the billions ploughed into the covered banks from our National Pension Reserve Fund as this was not counted as a cost to the General Government budget).

The European banking crisis is just that a European crisis. But as we know, this has not been addressed at European level. Rather, the cost has been delegated to individual countries regardless of their size or ability to pay. For instance:

Ireland makes up 0.9 percent of the EU population
The Irish economy makes up 1.2 percent of EU GDP

Ok, were small. So how much of the entire European banking debt have we paid?

The Irish people have paid 42 percent of the total cost of the European banking crisis.

The European banking crisis to date has cost every individual in Ireland nearly 9,000 each. The average throughout the EU is 192 per capita. I really dont know what you can say after that.

But if are still paying nearly 9,000 each while the remainder of the EU pays only a fraction of that, then it is no deal at all; just a re-arranging of euro notes a lot of euro notes on the decks of a sunken ship."


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Shareholders and creditors to pay for banks' mistakes, not taxpayers

The Bank Restructuration and Resolution directive sets new rules for all 28 Member States to put an end to the old paradigm of bank bail-outs, which cost taxpayers' hundreds of billions of euros in the crisis. For the first time, it enshrines in binding rules the principle of bail-in so that shareholders and creditors pay for banks' mistakes, not taxpayers. Any additional funds exceptionally required will come from the banking sector itself in the shape of specially set up resolution funds.

Banking Union:
We want bail-in of creditors and investors to be applied in the same way to all banks

According to Dutch MEP Corienn Wortmann-Kool this will create a resolution process that would treat banks equally regardless of country they were based in. We want bail-in of creditors and investors to be applied in the same way to all banks irrespective of the member states these banks are located in, she said using the example of Ireland as compared to larger states such as Germany and France.

While the plan agreed in December would have meant that a French or German bank, for example, with a large fund behind them would have been able to implement a moderate bail-in, an Irish bank with a smaller national fund would be forced into a deeper bail-in, leading to higher funding costs, she said.



Dan White: Be prepared for more economic stress as banks are put to the test

Published 29/04/2014|14:34

The dire condition of many of Europes major banks is one of the key roadblocks to any economic recovery in the Eurozone.

It isnt just the Irish banks which are stuffed to the gills with bad loans.
This is a continent-wide problem one that if it isnt addressed could blow the single currency apart.

So what are the chances of any of the Irish-owned banks failing the stress tests?
In 2011 all three, AIB, Bank of Ireland and Permanent TSB, passed.
Why should it be any different this time?

Well, when considering the stress tests the important thing to remember is that, while they are being dressed up as being utterly impartial and objective, the reality is of course very, very different.

It is utterly inconceivable that one of the really big Eurozone banks, Germanys Deutsche Bank, Societe Generale in France, Santander in Spain or Unicredit in Italy, will be allowed to fail.

The political and financial consequences of one of the big boys having to go cap in hand to their governments for extra capital simply dont bear thinking about.
This means that it aint going to happen no matter how many bad loans are found to be lurking in their balance sheets.
However, if the stress tests are to retain any shred of credibility then some big(ish) names have to be seen to fail.
Now call me a cynical old so-and-so but is it beyond the bounds of possibility that one or more of the Irish banks would be marked down?
After all, someone has to be made an example of.
From an EU perspective failing one or more of the Irish banks would help give the stress test results some much-needed credibility while not endangering the stability of any of the really large Eurozone banks.
But if, for example, either AIB or Bank of Ireland were to fail a stress test such an outcome would almost certainly shatter confidence in Ireland making it, at the very least, far more expensive for the government to sell bonds to investors on the international financial markets.
With the government having already borrowed 210bn on our behalf, an increase in the interest rate which we pay on our bonds is the last thing we need.

So will the Irish banks pass the stress tests?

Between them the Irish-owned banks have over 30bn of mortgages that are either in arrears and/or have been restructured on their books and at least a further 15bn of non-performing loans to SMEs.

Throw in other lending, credit cards, overdrafts, personal loans etc., and the total of distressed loans climbs to well over 50bn.

Wall Street Shadow Banking: You Cant Taper a Ponzi Scheme: Time to Reboot By Ellen Brown

Among those hot topics was the runaway shadow banking system, defined by Investopedia as The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions. Examples given include hedge funds, derivatives and credit default swaps.

Conventional banks also engage in shadow banking. One way is by using their cash cushion as collateral in the repo market, where they can borrow to invest in the stock market and other speculative ventures.

the derivatives pyramid has continued to explode under its watch, to a notional value now estimated to be as high as $2 quadrillion.

One reason rates are unlikely to be raised is that they would make the interest tab on the burgeoning federal debt something taxpayers could not support. Higher rates could also implode the monster derivatives scheme.

Michael Snyder observes that the biggest banks have written over $400 trillion in interest rate derivatives contracts, betting that interest rates will not shoot up. If they do, it will be the equivalent of an insurance company writing trillions of dollars in life insurance contracts and having all the insureds die at once. The banks would quickly become insolvent.

Worse, our deposits would get confiscated to recapitalize them, under the new bail in scheme approved by Janet Yellen as one of the Feds more promising tools (called resolution planning in Fed-speak).


The European Union financial transaction tax (EU FTT)

The European Union financial transaction tax (EU FTT) is a proposal made by the European Commission to introduce a financial transaction tax (FTT) within some of the member states of the European Union initially by 1 January 2014, later postponed to 1 January 2016. The tax would impact financial transactions between financial institutions charging 0.1% against the exchange of shares and bonds and 0.01% across derivative contracts, if just one of the financial institutions resides in a member state of the EU FTT.

The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU. It would cover 85% of the transactions between financial institutions (banks, investment firms, insurance companies, pension funds, hedge funds and others). House mortgages, bank loans to small and medium enterprises, contributions to insurance contracts, as well as spot currency exchange transactions and the raising of capital by enterprises or public bodies through the issuance of bonds and shares on the primary market would not be taxed, with the exception of trading bonds on secondary markets.

Irish Congress of Trade Unions
The Case for a Financial Transaction Tax: A Fair and Substantial Contribution from the Financial Sector
November 2012

There is plenty of evidence that small transaction taxes will not only make this sector pay its contribution, but will reduce the risk of the recurrence of economic
crises based on speculative bubbles. At the heart of the argument is the power the financial sector has to ruin the productive sector of our economy; casino capitalism versus productive capitalism.


EU financial transaction tax plan at risk of withering and dying
By Ann Cahill - European Correspondent - 6 May 2014

The future of the financial transaction tax, which 11 EU countries have said they will adopt, is uncertain as finance ministers meet today.

Ireland has said it is not interested in the tax unless all 28 member states are ready to adopt it, but is among the countries complaining about a lack of transparency among the 11 espousing it.

There are reports of huge rows among the countries that have said they want to adopt the Robin Hood tax, including France, Germany, Italy, and Spain.

One EU source said the disputes had become so significant that, while the whole project would not be withdrawn, it was in danger of being quietly forgotten and allowed to wither and die.

It is the first tax issue and the third EU initiative being promoted under the enhanced co-operation initiative that allows a number of member states to go ahead and agree a measure between them.

Efforts to have all countries adopt a financial transaction tax failed when put forward by the European Commission in 2010, while the UK last week failed in its challenge in the European Court of Justice to prevent the 11 countries continuing proceedings. The yes side has been accused of holding secret meetings and negotiations, claims that will be discussed at todays meeting.

There is huge tensions, according to a source. It is without doubt a file that has attracted some of the most bitter discussions and suspicion among member states.

German chancellor Angela Merkel and French president Franois Hollande set a deadline of this month before the European elections for an agreement that would see a 0.1% tax on all transactions, including on hedge funds and high-frequency trading.

If it is going to happen now there needs to be some kind of agreement it needs some political momentum if it is to go ahead, said the source.

Three of the countries already have a financial transaction tax while the others are considering introducing their own; Portugal has agreed that its government can create one if it wants.

The danger now, according to some, is that the enhanced co-operation initiative will be abandoned and each country will introduce their own tax with no harmonisation.

Ireland has a stamp duty of 1% on some transactions but not necessarily on those involving hedge funds and fears it will lose traders if it extend it. It yields more than 200m a year.

According to the European Commission, Ireland would gain more than 500m a year from a financial transaction tax.

Britain, which is vehemently against a financial transaction tax, also has a limited stamp duty. It has said it may return to the courts to challenge any agreement that the 11 counties may reach.



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The 'Celtic Tiger'


Who funded the 'Celtic Tiger'?


80 per cent - UK-sourced funding in Irish domestic banks

13 per cent - US-based funding

5 per cent came from off-shore funding

2 per cent - directly from the euro zone




'How clueless Irish pundits misrepresented Germany'
The Irish Times 16/9/2013 Credit: Derek Scally

"Hibernocentric crisis narrative
That Germans saved and Irish spent in the past decade is one of those sweeping statements rarely challenged from which pundits have extrapolated their Hibernocentric crisis narrative. The Germans were effectively buying the drinks for the Irish, they say, and should thus share the blame, the cost and the consequences for the car now wrapped around the tree.

The trouble is that the financial data to support this argument is at best complex and patchy and at worst far less compelling than you might think.

Last March the Central Bank supplied The Irish Times with previously unpublished data showing that when the music stopped in 2008 it was Britain, not Germany, that was by far the biggest source of funding for Irish banks."

'The money trail . . . How much European, particularly German, money was in the Irish economy when the music stopped?'
The Irish Times 27/3/2013 Credit: Derek Scally

"Banking data is compiled along the "nationality concept", ie attributing data to the country where a bank's headquarters is based. This method does not always take into account the source of the funds being invested nor does it take into account indirect investment. German banks had huge exposure to US and UK lenders who, in turn, were big lenders to Ireland as well as big losers in the sub-prime debt crisis.

Taking all this into account, establishing the origin of pre-crisis capital flows to Ireland is a complicated task. Information is patchy, not everything was collated and not all collated data is publicly available. Pre-crisis banking data for Ireland seen by The Irish Times and Die Zeit indicate that direct euro zone lending to Irish banks before the crisis was unimportant relative to lenders in other locations.

Euro area figures for Ireland show the top three lending locations to pre-crisis Irish banks were, in order, the UK, offshore centres and the US. In 1995, UK funding for Irish banks was 94 per cent of the total foreign funding; by mid-2008 the UK-sourced funding in Irish domestic banks was 80 per cent of the total. US-based funding accounted for 13 per cent in 2008, while 5 per cent came from off-shore funding, where the nationality of investor is not clear. Which leaves 2 per cent of total Irish bank funding directly from the euro zone.

Pre-crisis Irish banks funded themselves in four ways: interbank lending; deposits; debt securities; and other sources. Central Bank of Ireland statistics for August 2008, the month before the bank guarantee, show consolidated bank liabilities of 587.648 billion. (See graphic) Of that total 241 billion (41 per cent) were Irish deposits and securities (long- and short-term bonds). Some 41.5 billion (7 per cent) were euro-area deposits and securities. Meanwhile 225.5 billion (38 per cent) was deposits and securities from the rest of the world, including the UK and US.

Statistics show a rise in euro area funding to Irish banks in the pre-crisis decade and a sharp reversal in 2007. Irish statistics do not give a breakdown of interbank flows between banks in Germany and Ireland, however Bundesbank statistics indicate a growing German investment. In early 2000, German banks had 20 billion invested in Ireland, according to consolidated figures. By the end of 2006 that had quadrupled to 79 billion. By September 2008, the month of the bank guarantee, the level was 135 billion - a 575 per cent increase compared to eight years earlier. Investment declined rapidly between September to October 2010 from 157.5 billion to 78.3 billion. Currently the amount is 51 billion.

The Central Bank of Ireland says Bundesbank data sets relating to Ireland carry health warnings. A law change in 2001 allowed IFSC-based non-Irish-owned banks issue covered bonds which impinge minimally on the Irish domestic bank sector but were still collated in Irish banking data. Thus Bundesbank data relating to Irish banks is, the Irish Central Bank warns, distorted by large capital flows of German banks to and from their IFSC subsidiaries.

Tracking the identity or nationality of bank bondholders is a difficult task. Purchases are anonymised by a clearing house system and bonds change hands rapidly. Consolidated Central Bank figures from August 2008 nevertheless provide an interesting snapshot. Debt securities, including short- and long-term bonds, contributed 107.97 billion to Irish bank financing a month before the bank guarantee. Of this total, one quarter of bonds were in Irish hands, while 63 per cent were held outside the euro area. Euro area banks comprised just 13 per cent of bondholder total.

Of non-resident deposits in August 2008, Central Bank of Ireland figures show that just 10 per cent came from the euro area. Internal CBI statistics indicate that German non-bank retail depositors - private savers - comprised less than 5 per cent of foreign deposits at the Irish peak in 2008.

Blogger Paul Staines caused a furore by publishing a list of what was purported to be Anglo Irish Bank's pre-crisis bondholders. Of the 80 bondholders on the published list - a small subset of the full book - about 30 institutions (37 per cent) are German institutions such as Deutsche Bank and AXA. "It is not a great conspiracy list as it shows representatives of the bond business and has the names of everyone you would expect to be there," says Mr Staines now. The spreadsheets on which he based the published list, he says, show "there was more British money than German [in Anglo], which didn't exactly serve my argument that Ireland was bailing out the euro zone"."


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Employment / Unemployment


Ireland has the second highest percentage of low-paying jobs in the world

IN A NEW research note on inequality, Morgan Stanley economist Ellen Zentner included this fascinating chart showing that, among OECD countries, the United States has the highest proportion of low-paying jobs, with Ireland not far behind.

The 2014 version of the OECD Employment Outlook report cited by Morgan Stanley defines low-paying jobs as those for which earnings are below two-thirds of a countrys median income.

According to the OECD analysis and the Morgan Stanley report, just over a quarter of jobs in the US fell in this low-paying category.

In 2013, the median annual income in the US was $35,080, according to the Bureau of Labor Statistics Occupational Employment Statistics program.

Under the OECDs definition, then, a low-paying job would earn less than about $23,390.

In Ireland, the CSO estimates the average wage to be around 688 a week, or 35,620 a year. This means that anyone earning under 23,641 is classed as low-paid by the OECD.



Foreign Direct Investment (FDI) 2008



Ireland remains the most Foreign Direct Investment (FDI) intensive economy in Europe and IDA has continued to play its part in winning the highest quality investments."

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Employment associated with exports outside of the EU as a percentage of total employment within EU countries (2007)



"In general, the share of employment associated with extra-EU exports tends to be the highest in smaller countries, notably Malta, Ireland (12.2 per cent in 2007), Finland (11.6 per cent) and Luxembourg (11.3 per cent).

Among the bigger economies, it is in Germany that the extra-EU exports made the largest contribution to employment (9.6 per cent in 2007), followed by the UK (8.1 per cent) and Italy (7.7 per cent). In contrast, in Spain this ratio was notoriously lower at 4.1 per cent.

It is in Germany (3.8 million), UK (2.4 million), Italy (1.9 million) and France (1.8 million) that the largest number of jobs depending on extra-EU trade can be found in 2007."

This would also reflect the high dependency of the Irish Government on US multinationals as a source of employment.

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Employment and Unemployment 2007 - 2013

Unemployment rates 2008 - 2013


Ireland and EU: Employment Rate 2001 - 2011
Men and Women



Economic Status of Women 2011

Women's earnings as a % of Men's 1969 - 2011

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Live Register by Age Group 2011 - 2013




"In the year to October 2013 the number of persons aged 25 and over on the Live Register decreased by 16,324 (-4.7%), and the number of persons aged under 25 decreased by 7,336 (-10.5%).

Annual decreases in persons aged under 25 have occurred in all months since July 2010, while the number of persons aged 25 and over have fallen annually in all months since July 2012.

The percentage of persons aged under 25 on the Live Register now stands at 15.8% for October 2013, down from 16.6% in October 2012 and 18.1% in October 2011."




Live Register October 2013


Live Register
Rate 2010 - 2013



"On a seasonally adjusted basis the Live Register total recorded a monthly decrease of 3,700 in October 2013, reducing the seasonally adjusted total to 409,900.

In unadjusted terms there were 396,512 people signing on the Live Register in October 2013. This represents an annual decrease of 23,660 (-5.6%).

This is the first month since May 2009 that the unadjusted Live Register total has been below 400,000."


Rates of Unemployment 2007 - 2011
LTU (long-term unemployed)



More than half are long-term unemployed (LTU rate - out of work for more than 1 year).

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Retail Sales 2005 - 2013



Retail Sales peaked in 2007, declined rapidly until 2011 with some smaller variations to 2013.


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 Imports / Exports

 Imports / Exports 2003 - 2008



Imports / Exports 2008

"Irish exports of goods trade for the year 2008 were 86,218m, 3% down on 2007. Excluding a substantial decline in computers, exports held steady. Computer equipment decreased from 12,577m to 9,322m (-26%), reflecting the wind-down of Dell's Limerick operation and Organic chemicals from 19,641m to 17,853m (-9%).

Chemicals increased from 2,664m to 3,483m (+31%), Pharmaceuticals from 14,749m to 16,704m (+13%) and Professional, scientific and controlling apparatus from 2,109m to 2,779m (+32%).

Goods to Great Britain decreased from 15,002m to 14,302m (-5%) and to Switzerland from 3,251m to 2,555m (-21%). Goods to the United States increased from 15,825m to 16,657m (+5%), to China from 1,989m to 2,323m (+17%), to Malaysia from 694m to 1,062m (+53%) and to Spain from 3,281m to 3,587m (+9%).

Irish merchandise exports are dominated by US-owned firms.

Imports for 2008 were 56,964m, down 10% on 2007.

Computer equipment decreased from 9,277m to 6,754m (-27%). Other transport equipment (including aviation equipment) decreased from 2,605m to 2,169m (-17%) and Road vehicles from 4,575m to 3,183m (-30%).

Pharmaceuticals increased from 2,397m to 2,866m (+20%), Petroleum and related materials from 4,479m to 4,813m (+7%) and Natural gas from 1,039m to 1,378m (+33%).

Goods from China and Hong Kong decreased from 5,169m to 4,224m (-18%), Japan from 1,631m to 1,137m (-30%), Germany from 5,591m to 4,623m (-17%) and Great Britain from 19,508m to 17,882m (-8%). undefined undefined

Goods from Denmark increased from 667m to 1,031m (+55%) and Poland from 268m to 456m (+70%).

In December 2008 the value of exports was 6,772m, up 608m (+10%) on December 2007, while imports were 4,135m, down 959m (-19%).

The seasonally adjusted value of exports in December 2008 was 6,789m, 4% down on November 2008, while imports were 3,868m, down 11%."


Imports / Exports 2006 - 2012


Imports / Exports 2012 / 2013
Apr 16, 2013

"Irish Economy 2013: Preliminary figures for February 2013 indicate a seasonally adjusted increase in exports of 154m (or 2.2%) to 7.00bn from January 2013, according to the CSO. Seasonally adjusted imports decreased by 69m (or -2%) to 3.88bn resulting in an 8% increase in the seasonally adjusted trade surplus to 3.13bn. Comparing February 2013 with February 2012, the value of exports fell by 753m (or -10%) to 6.65bn.

The main drivers being falls in the exports of medical and pharmaceutical products of 309m (or -15%) and 286m (or -18%) for organic chemicals.

On an overall basis the EU accounted for 3,845m (or 58%) of total exports in February 2013. The USA was the main non-EU destination accounting for 22% (1,492m) of total exports in February 2013.

Comparing February 2013 with February 2012, the value of imports decreased by 61m (or -2%) to 3,891m. Imports of petroleum, petroleum products and related materials decreased by 128m (or -21%).

Two-thirds of the value of imports in February 2013 came from the EU, with one-third coming from Great Britain. The USA (9%) and China (6%) were the main non-EU sources of imports."

'Value of Irish exports rose to 92bn in 2012 - CSO'

"The value of exports was 92 billion in 2012, a 1% increase on figures from the previous year according to the Central Statistics Office.

Imports were up 1.5% to 49 billion, resulting in a trade surplus of 42.98 billion up 0.2% on 2011.

The United States accounted for 20% of Irish exports during 2012, while Belgium and Britain both accounted for 15%.

8% of exports last year were to Germany.

Meanwhile, Britain was the source of 31% of Irelands imports during 2012. The US accounted for 13%, 7% of imports came from Germany while 6% came from China.

While the overall value of exports increased, medical and pharmaceutical exports fell by 1.9bn, or 7%, during 2012. The value of similar imports also fell, decreasing by 6% to 4.1bn.

Most other export categories saw a rise in value, including a 441m (35%) increase in petroleum exports and a 578m rise in miscellaneous manufactured articles."

'Value of Oil Imports Statistics for Ireland , Year 2013 - In Detail'

"Value of Oil Imports for Ireland in year 2013 is US$ 6.878 Billions. Value is equal to the price per unit of quantity of oil imports multiplied by the number of quantity units.

This makes Ireland No. 49 in world rankings according to Value of Oil Imports in year 2013. The world's average Value of Oil Imports value is US$ 14.94 Billions; Ireland is US$ 8.06 less than the average.

In the previous year, 2012, Value of Oil Imports for Ireland was US$ 6.96 Billions Value of Oil Imports for Ireland in 2013 was or will be 1.12% less than it was or will be in 2012.

In the following or forecasted year, 2014, Value of Oil Imports for Ireland was or will be US$6.67 Billions, which is 3.00% less than the 2013 figure."

"In 2009, the Irish export volume went down to $107.3 billion, from $119.8 billion in 2008. The main exported commodities were:

Machinery and equipment
Live animals
Animal products

Irelands exports partners include:



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Exports 2009

Exports As a Percentage of GDP 1998 - 2012



Jul 4, 2012

"Ireland is the champion of exports in the Euro Zone. Germany takes a good second place and Portugal's economy is also quite dependent on the international trade.

Greece on the other hand has the lowest exports as a percentage of GDP, of the selected countries."


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House Prices


House Prices 1996 - 2011


House Prices Ireland 2000 - 2010

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Mortgage Drawdowns 2005 - 2010

Late Stage Mortgage Arrears

Mortgage Debt 2010 - 2013


There is a slow decline in the overall number of mortgages with an increase of mortgages on Standard Variable Rates and decrease of mortgages on Tracker [ECB] Rates.

"Since peaking at 149 billion at the start of 2009 the amount of mortgage debt issued by banks in Ireland to Irish households has fallen to 126 billion. [...]

All told there probably has been a nominal reduction of around 17 billion in the total amount of mortgage debt owed by Irish households in the past four years.

Separate data from the Irish Banking Federation show that 8 billion of new mortgage debt has been issued to first-time buyers and mortgage top-ups.

It also likely that some elements of the loans to mover-purchasers, re-mortgagers and BTL borrowers would lead to more new debt.

Given the 17 billion reduction in the nominal amount owing and the 8 billion increase from new debt then something around 25 billion of the mortgage debt that existed at the peak Q1 2009 has been repaid.

This is a repayment rate of around 1.5 billion per quarter."

'Cold comfort: Iceland writes 24,000 off every mortgage'

"Hard-pressed Irish homeowners will find cold comfort in the news that Iceland is to write off 24,000 from every households mortgage.

Voters here are used to pre-election party pledges evaporating into the fog of fantasy but, in the land of frost and fire, politicians have proven they can be true to their word.

In Aprils elections, prime minister Sigmundur David Gunnlaugsson said he would introduce sweeping measures to ease the burden of household debt.

And now he has put the countrys krona where his mouth is. The writeoff of 24,000 per mortgage will reduce household debt by 13% according to the governments website.

According to, the government said the debt relief will begin by mid-2014. According to estimates, the measure will cost almost 900m.

That may seem like a slush-fund compared with the oceans of debt faced by many European nations, but bear in mind Icelands population is just over 320,000.

The population has been weighed down by debt since the financial crisis five years ago. The kronas collapse drove borrowing costs much higher.

Currently, household debt is equivalent to 108% of GDP, which is high by international comparison, the government said in a statement.

The action will boost household disposable income and encourage savings, it said.

According to AFP, the debt relief promise has been met with scepticism, with the IMF, and the Organisation for Economic Co-operation and Development warning against it.

The IMF had previously said Iceland has little fiscal space for additional household debt relief, while the OECD had called for the mortgage relief efforts to target only low-income households."


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Mortgage Arrears
Principal Dwelling Houses (PDH)

Mortgage Arrears
Principal Dwelling Houses (PDH)

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'Residential Mortgage Arrears and Repossessions Statistics: Q3 2013'
Central Bank of Ireland

"The number of mortgage accounts for principal dwelling houses (PDH) in arrears, fell from 142,892 (18.5 per cent of the total stock ) to 141,520 (18.4 per cent) during the quarter to end-September 2013.

The outstanding balance on all PDH mortgages in arrears fell by 0.5 per cent during Q3, the first decrease since the series began in September 2009. However, this decrease masks divergent trends between short-term and longer-term arrears.

PDH mortgage accounts in arrears of over 90 days at end-September 2013 amounted to 99,189, an increase of 1,315 on the previous quarter. This increase was driven entirely by accounts in arrears over 720 days with all other maturity categories declining.

The number of PDH accounts in early arrears of less than 90 days declined by 6 per cent during the third quarter, compared to a decrease of 3.3 per cent in Q2.

There was a total stock of 80,555 PDH mortgage accounts classified as restructured at end-September, reflecting a quarter-on-quarter increase of 1.5 per cent. Of these restructured accounts, 78.9 per cent were deemed to be meeting the terms of their current restructure arrangement.

The number of buy-to-let (BTL) mortgage accounts in arrears rose from 39,948 (26.9 per cent) to 40,426 (27.4 per cent) in the third quarter of 2013. However, similar to PDH developments, the increase was driven by longer-term arrears, with the number of accounts in arrears up to 180 days declining.

There were 31,227 (21.2 per cent) residential mortgage accounts for BTL properties in arrears of over 90 days at end-September 2013, up from 30,326 (20.4 per cent) at end-June 2013.

A total of 23,776 new restructure arrangements were agreed during the third quarter of the year. The share of interest only arrangements and reduced payment
arrangements (interest plus some capital) fell further during Q3, to 41.4 per cent from 49.7 per cent at end Q2 indicating a move out of short-term arrangements. Arrears capitalisations and term extension arrangements increased during the third quarter of
the year, and accounted for 20 per cent and 19.2 per cent of total restructures at end
-Q3, respectively.

Legal Proceedings and Repossessions
During the third quarter of 2013, legal proceedings were issued to enforce the debt/security on a PDH mortgage in 1,830 cases. Court proceedings concluded in 361 cases during the quarter, and in 89 of these cases the Courts granted an order for repossession or sale of the property. There were 1,002 properties in the banks possession at the beginning of the quarter. A total of 209 properties were taken into possession by lenders during the quarter, of which 76 were repossessed on foot of a
Court Order, while the remaining 133 were voluntarily surrendered or abandoned.
During the quarter 158 properties were disposed of. As a result, lenders were in possession of 1,050 PDH properties at end-September 2013."


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Private Sector Debt


Private Sector Debt 2009

"Private sector debt levels will increase to 225% of GDP in 2009 - among highest of developed world."

"Irish household debt is also very cheap. About one-third of household debt is in incredibly cheap tracker-rate mortgages. The repayments on these are now far lower than when these loans were taken out between 2005 and 2008. In that time the ECB rate has gone from 4.25pc to 1.00%. The average interest rate on these loans is around 2pc.

Rather than using incorrect figures I would put the level of debt in the Irish economy at the end of 2011 as roughly the following:

Household Debt: 186 billion
Government Debt: 167 billion
Business Debt: 145 billion

This is almost 500 billion and is four times Irelands Gross National Product. This is an excessive level of debt." [25 January 2012]


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Irish Savings


Let us look at "the myths of our allegedly massively high savings rates. All of the data [above] is taken from the IMF WEO database.

Let us rank Ireland's gross savings rate compared to all other advanced economies (higher rank means lower savings rate): [table above]

Contrary to what our Taoiseach and Mr Coveney were saying, Ireland's savings rate in 2010-2014 is estimated by the IMF to be... the 5th lowest in the sample of 33 advanced economies around the world. May be it is the highest in the Euro zone? Oh, no - it is actually the fourth lowest in the Euro zone."


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Personal Spending

Irish Spending


'We spend 11bn less a year than in boom but pay 2bn more tax'

Irish Independent
Aideen Sheehan
Consumer Correspondent
23 August 2013

"IRISH people are spending 11bn less a year than they did at the height of the boom, but are paying 2bn more in tax.

That is a decrease of around 2,500 for every man, woman and child in the country compared with what we spent five years ago.

We are spending far less on food, drink, cigarettes and clothes than we did in 2007 and 2008, new Central Statistics Office figures have revealed.

Yet we are handing over 2bn more in taxes than a couple of years ago around 500 more for every person.

While personal spending peaked at 94bn in 2008, it fell back dramatically to 82.6bn last year, the CSO's National Income and Expenditure 2012 report shows.

Sellers of household equipment took the biggest hit of all as consumers spent only 1.8bn less than half the 2007 figure.

Cars and other transport equipment saw a similar drop in spending to just 2.1bn, but the cost of filling-up and running a vehicle has soared by more than 1bn in only three years to 5.5bn.

We are also spending 1bn a year less on clothing and footwear, with spending on fashion down from 4bn in 2007 to 2.9bn last year.

Households paid 23bn in taxes on income and wealth last year compared with 21bn in 2010.

While we paid slightly more in tax at the peak of the boom, that was at a time when hundreds of thousands more people were working.

Hard-pressed families have also taken a 900m hit in child benefit since 2008, with payments down from 2.9bn in 2008 to 2bn last year.

The amount paid out in unemployment assistance has trebled to more than 3bn during the recession because of growing dole queues.

However, some payments fell steeply, such as disability benefit and domiciliary care payments for children.

The Government also spent 1bn more on old age contributory pensions last year than it did during the boom, with payments rising from 2.8bn to 3.8bn.


Despite austerity, consumer spending has increased very slightly since its low point in 2010.

In particular, we spent 100m more a year on alcohol than we did two years ago, forking out 6.36bn last year in pubs, off-licences and supermarkets.

Spending on food has also climbed, by about 5pc or 61m since 2010, rising to 7.4bn last year.

The amount we spent on home energy and electricity has also soared, by 350m since 2007 to 3.4bn in 2012 as customers have faced a series of price hikes.

And housing costs which includes rent and home ownership are also on the up, rising by nearly 3pc last year to 15.1bn."

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Irish Community and Voluntary Sector



'Facts and Statistics About the Irish Community and Voluntary Sector'

"More than half of the organisations in existence today have been formed since 1986...

Governance and Company Profile

1. 59,600 directors serve on the boards of Irish nonprofit companies. Board membership in the sector is almost invariably unpaid.

2. If an average of eight trustees (for the 3,700 unincorporated charities in the database) is added, this means that up to 90,000 people serve in a voluntary capacity in the governance of the nonprofit sector in Ireland.

3. Of the nonprofit companies currently trading, 70 were incorporated prior to 1950; 3,571 were incorporated between 1950 and 1999; 4,934 were incorporated between 2000 and the first quarter of 2010. Of the recently-established nonprofit companies, many are local development organisations enterprise, partnership and community development companies and many others set up with government funds to deliver local supports.

The Financial Profile of the Sector

4. The total reported income of the nonprofit companies in the Irish Nonprofits Database (upon which these statistics are based) in 2009 was 5.75bn.

5. Reported assets held by the nonprofit companies amounted in 2009 to 3.4bn, of which cash totaled 1.7bn.

6. 951 companies reported a negative asset position, collectively totalling 152m in net liabilities.

7. There is no consistency in the presentation of incoming resources. About half of the nonprofit companies featured in the Irishnonprofits database (upon which this data is based) provide an analysis of the sources of their income, whether from grants, donations, or trading activities, whereas the rest simply report income. This situation will change in 2010 for reasons discussed already. In the meantime, all of the amounts below are certainly an understatement of the true position. Of those nonprofit companies that report the sources of their income:

42 report receiving legacies and bequests to a net value of 7.3m, in amounts varying from 795 to 1,254,466 - a mean average of 172,951

24 report receiving donations in kind (i.e. non-cash) to a net value of 100m a mean average of 4,182,868

733 report donations in values ranging from 10 to 6,916,903, with total reported donations in 2009 valued at 77m.

Grants & Funding

8. Grants, whether from State or private philanthropic sources, are by far the single largest source of income. Grants are reported as a source of income by 2,886 nonprofit companies at a combined level of 2bn, with:

443 organisations reporting total grant income of less than 10,000,

555 reporting grant income of between 10,000 and 50,000,

1,441 reporting grant income between 51,000 and .5m, and

433 reporting grant income in excess of .5m.

9. Ten nonprofits (only one of which is not a health service provider) with a combined turnover of just over 1bn account for .9bn of reported grant income.

10. The total number of grant sources itemised in the Irish Nonprofits Database is 672, with Irish government departments and agencies accounting for the great majority of these, and a small number of Irish-based international NGOs reporting grants from a variety of foreig governments and international agencies. The profile of grants by source is as follows:

1,778 nonprofits report a grant from one source only
518 report grants from two sources
280 report grants from three sources
154 report grants from 4 sources
245 report grants from between 5 and 10 sources
20 report grants from between 11 and 19 sources.

Payroll and Employment

11. Of the 3,857 nonprofit companies that report employee numbers and/or payroll costs, the total number of employees in 2009 was 101,054.

12. Hospitals and healthcare providers are the largest employers, with 26 institutions alone responsible for the employment of 4,200 of these.

13. The profile of employment numbers suggests a sector of SMEs:

1,458 nonprofit companies employ 5 people or fewer.
1,606 employ between 6 and 50 people.
90 employ between 51 and 99 people
Just over 100 nonprofits employ more than 100 people.

14. The accounts of about 3,500 nonprofit companies report neither staff numbers nor payroll costs, thus indicating that they operate on an entirely voluntary basis.

15. No data are yet publicly available about employment levels in the 3,700 unincorporated charities which enjoy tax-exempt status from Revenue (this will presumably change when the provisions of the Charities Act 2009 are commenced).

16. The total wages and salaries expenditure in Irish nonprofit companies in 2009 was 3.7bn, with a further 290m remitted in employers PRSI. FAS contributed 151m, in reported grants to 477 nonprofit companies. The geographic profile of the sector.

17. The registered address of a nonprofit body does not indicate the reach of its activities many national organisations for example are headquartered in Dublin. However, the map above is indicative of the geographic distribution of all 11,700 nonprofits in the Irish Nonprofits Database."

'Ireland ranked the most generous country in Europe for third year running'

'70 per cent of Irish people give money to good causes'

By James Martin on December 3, 2013 The Irish Post

"IRELAND has been named the most generous country in Europe and the fifth most generous country in the world.

It marks the third year in-a-row that the country has topped its European neighbours in the World Giving Index survey.

In the world rankings Ireland dropped from its previous position as the second most generous nation on the planet.

The global survey measured three categories: direct donations to charity, volunteering personal time and a willingness to help strangers.

70 per cent of Irish people were found to donate money to charity, 37 per cent give up their time for good causes and 64 per cent of people help strangers in a typical month, according to the according to the World Giving Index.

This year, Volunteer Ireland found there was an increase in the number of people volunteering in Ireland, up three per cent to 37.

The World Giving Index is based on surveys in 135 countries over the past year.

Yvonne McKenna, CEO of Volunteer Ireland, said: The research highlights the remarkable generosity of spirit that continues to thrive in Ireland throughout difficult times.

Connecting with people is something that is inherent to our culture in Ireland and this is reflected in the statistics.

McKenna named The Gathering and the tenth anniversary of Irelands hosting of the Special Olympics World Games as two events which contributed to 2013 being a milestone year for volunteering in Ireland.

These remain difficult times and we are still in the midst of a social and economic crisis, yet the growth of interest in volunteering is a positive side of the countrys downturn, she added."

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'Poor regulation in 5bn charity sector, report finds'

By Evelyn Ring
Irish Examiner Reporter
Wednesday, March 13, 2013

"Irelands 5bn not-for-profit sector must be regulated, a report has urged.

The Fundraising Performance report by fundraising specialists 2into3 and sponsored by specialist charity insurer Ecclesiastical shows that organisations employ more than 100,000 people, with salaries representing 46% of spending.

The report, based on an analysis of accounts from 1,000 charities, shows funds continue to rise despite the recession, with about 4.9bn raised in 2011.

Director of 2into3, Neil Pope, said the sector was poorly regulated.

In particular, variations were found in the amount of information available about how funds were raised and for what purpose.

Mr Pope said Justice Minister Alan Shatter should enforce the 2009 Charities Act that would support the growth of the sector and provide a better infrastructure to manage both fundraising and spending.

No other sector of such scale operates without governance and regulations.

Given the sensitivity of the projects and importance of fundraising to so many sectors it is vital that the Government acts now to bring further peace of mind to donors and recipients alike by enforcing the legislation, he said.

While the 4.9bn was up 3.7% on the previous year, the scale of organisations in the sector and their success varied. Just under 40% of organisations had an income of less than 100,000 and almost 80% had an income of less than 500,000. Just one in eight (12.5%) had an income in excess of 1m."


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What are Securities?

Securities are a form of ownership that can be easily traded on a secondary market. Securities allow you to own the underlying asset without taking possession.

For this reason, securities are very easily traded, or very liquid. They are easy to price, and so are a great indication of the underlying value of the asset.

Traders must be licensed to buy and sell securities to assure they are trained to follow the laws set by the Securities and Exchange Commission (SEC).

The invention of securities helped the create the huge success of the financial markets.

There Are Three Types of Securities:

1. Equity Securities - These allow you to own shares of a corporation. The most direct way is to buy stocks of a company yourself. You can also profit by buying shares of a mutual fund, which invests in the stocks for you. The secondary market for equity derivatives is the stock market, such as the New York Stock Exchange and the NASDAQ.

You can also buy stocks of a new company before it hits the stock exchange. The shares of this Initial Public Offering (IPO) are bought from investment banks, like Goldman Sachs or Morgan Stanley. However, you usually have to have a lot of money, because these shares are sold in bulk quantities. Once they hit the stock market, their price usually goes up. However, you can't cash in for a certain period of time. By then, the stock price might have gone down below the initial price.

2. Debt Securities - These allow you to provide loans, called bonds, to a company or even a country. Ratings companies, like Standard & Poor's, Moody's and Fitch's evaluate how likely it is the bond will be repaid. To insure a successful bond sale, borrowers must pay higher interest rates if their rating is below AAA. If the ratings are very low, they are known as junk bonds. Despite their risk, investors buy junk bonds because they offer a higher interest rate.

Corporate bonds are loans to a company. If the bonds are to a country, they are known as sovereign debt.. Bonds issued by the U.S. government are Treasury bonds. Because these are the safest bonds, Treasury yields set a benchmark for all other interest rates. In April 2011, when Standard & Poor's cut its outlook on the U.S. debt, the Dow dropped 200 points. That's how significant Treasury bond rates are to the U.S. economy.

3. Derivative Securities - Traders are always trying to find ways to get a higher return with less risk. Therefore, innovative derivatives of basic stocks and bonds are often developed. Stock options allow you to trade in stocks without actually buying them upfront. For a small fee, you can buy a call option to purchase the stock at a certain date at a certain price. If the stock price goes up, you exercise your option and purchase the stock at your lower negotiated price, then immediately resell it for the higher actual price.

A put option gives you the right to sell the stock at an agreed upon price. If the stock price is actually lower that day, you buy it and make a profit by selling it at the agreed upon, higher price.

Futures contracts are derivatives based on commodities, such as oil, pork bellies, or even currencies. Like options, you pay a small fee (called a margin) to get the right to buy or sell the commodities for an agreed-upon price in the future. However, futures are more dangerous because, rather than buying options that you can choose to ignore, you are entering into an actual contract that you must fulfill.

Asset-backed securities are derivatives whose values are based on the returns from bundles of underlying assets, usually bonds. The most familiar are mortgage-backed securities, which helped create the subprime mortgage crisis. Others include asset-backed commercial paper, which are corporate loan bundles backed by assets such as commercial real estate or autos. Collateralized debt obligations (CDOs) take these securities and divide them into tranches, or slices, with similar risk.

Auction-rate securities were derivatives whose values were determined by weekly auctions of corporate bonds. Investors thought the returns were as safe as the underlying bonds. However, the securities' returns were actually set according to weekly or monthly auctions run by broker-dealers. Since this was a more shallow market, the securities were actually more risky than the bonds themselves. In fact, this market froze in 2008, leaving many investors holding the bag, leading to SEC investigations.


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What is the Secondary Market?

The secondary mortgage market (or secondary market) allows banks to sell mortgages, giving them new funds to offer more mortgages to new borrowers. If banks had to keep these mortgages the full 15 or 30 years, they would soon use up all their funds, and potential homebuyers would have a more difficult time to find mortgage lenders.

Many of the mortgages on the secondary market are bought by Fannie Mae. Other are packaged into mortgage-backed securities, and sold to investors.

For example, Fannie Mae buys mortgages from banks, a process known as buying on the secondary mortgage market.

Fannie Mae (USA)

The Federal National Mortgage Association (FNMA), colloquially known as Fannie Mae, was established in 1938 by amendments to the National Housing Act after the Great Depression as part of Franklin Delano Roosevelt's New Deal.

Fannie Mae was established to provide local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing.

Fannie Mae created a liquid secondary mortgage market and thereby made it possible for banks and other loan originators to issue more housing loans, primarily by buying Federal Housing Administration (FHA) insured mortgages.


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 Resident Holdings of Foreign Portfolio Securities 2012



"Investment in foreign securities rises to 1.59 trillion at end-2012.

The value of Irish residents holdings of foreign securities at end-December 2012 amounted to 1,589bn, up 157bn on the revised 2011 level of 1,432bn.

The increase is largely accounted for by increases in equity and in bonds and notes assets."

Wealthy Irish increase their wealth.


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Homelessness in Ireland
Peter Mc Verry Trust
"Peter McVerry Trust is committed to reducing homelessness, the harm caused by drug
misuse and social disadvantage through the principle of a housing first model. Peter
McVerry Trust provides low-threshold entry services, primarily to younger persons with
complex needs, which offer pathways out of homelessness within a framework of equal
opportunities, dignity, and respect."



'Frightening increase' in homelessness - Simon Community
Tuesday, 24 September 2013

"The Dublin Simon Community has reported what it describes as a frightening increase in homelessness in recent months. Its rough sleeper counts in Dublin city centre have shown an 88% increase on last year.

The charity, which launched its annual review today, said the figures recorded by its teams since July are the highest ever. The most recent figures for September show the numbers have nearly tripled compared to the same period last year.

On one night this month it found 85 people sleeping rough in the core city centre area between Jervis Street and Harcourt Street. Spokesperson Sam McGuinness said the Government's plan to end homelessness by 2016 is in real jeopardy.

The charity fears further cuts in next month's Budget will make its work extremely challenging. It said the reasons for the increase are shortage of housing and emergency accommodation, increased rents and rent allowance restrictions."


"Brazil has 1.8 million homeless people. Ireland has 5,000 homeless people, with
a GDP per capita nine times that of Brazil. Brazil, perhaps, has some excuse for the
continuing existence of homelessness.

The failure of Government to increase the stock of social housing to meet demand, even during the Celtic Tiger years, resulted in an increase in the number of homeless people from 2,500 in 1996 to over 5,000 today and rising, while the number of households waiting for social housing has increased from 25,000 in 1996 to over 100,000 today and rising."


"The Dublin Region Homeless Consultative Forum and Management Group notes that there were a minimum of 94 persons confirmed to be sleeping rough on the night of the most recent count held in April 2013.
This spring count found people identified as sleeping rough were:
Male (72)
Female (11)
Unknown (11).

The breakdown of nationality was as follows:
Irish nationals (46)
Non-Irish nationals (23)
Unknown (25)."

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Full-time Education 1965 - 2012

Higher Education 2011

Participation in Education 2010

Expenditure on Education 2010

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'Proportion of public expenditure on education fell by 40% in a decade'

Pamela Duncan
Wed, Jun 26, 2013

"OECD report finds educational attainment levels in Ireland have increased significantly since 2000.

The proportion of public expenditure on education fell by more than 40 per cent in the decade between 2000 and 2010, according to statistics published by the Organisation for Economic Co-operation and Development.

The proportion of public expenditure on education fell fell from 13.7 per cent to 9.7 per cent in the decade between 2000 and 2010 according to statistics published by the Organisation for Economic Co-operation and Development (OECD).

The OECD Education at a Glance 2013 report shows that the proportion of public expenditure on education in Ireland stood at 13.7 per cent in 2000, above the OECD average of 12.6 per cent.

However, a decade later Irelands education spend accounted for 9.7 per cent of public expenditure, below the OECD average of 13 per cent.

The drop in the proportion of public expenditure which goes towards education saw Ireland fall to 29th place in a 2010 ranking of 32 OECD countries, above only the Czech Republic, Japan and Italy.

Reacting to the report Peter Mullan of the Irish National Teachers Organisation (INTO) said the fall in the proportion of public spending on education was directly responsible for cuts to school budgets, school staffing and special needs teaching hours.

Its time we had a national debate on funding education properly in Ireland to ensure that all children get the education they deserve, he said.

ASTI General Secretary Pat King described the reduction in available public expenditure for education as alarming.

This failure to prioritise and protect young peoples education can only be described as reckless and flies in the face of the Governments stated commitment of developing Ireland as a knowledge economy, he said.

However, despite the drop in the share of money being spent on education, the OECD reported that expenditure per student actually rose by 33 per cent Ireland between 2005 and 2010.

At the same time as the number of students at primary and secondary level and those taking part in post-secondary courses which do not result in a university degree or equivalent qualification rose by by 8 per cent.

It found that the total cumulative expenditure per student by educational institutions over the duration of their primary and secondary studies added up to USD $129,662 in 2010, above the OECD average of USD $106,320.

Educational attainment levels

The report found that educational attainment levels have increased significantly in Ireland since 2000, something it said was largely due to the younger generations:

38 per cent of 25 to 34 year-olds have an upper secondary education as the highest level of attainment and 47 per cent have tertiary qualifications [see table above]. This represents not only an important cross-generational change compared with older adults...but places Ireland above the OECD average of 39 per cent...For this age group, Ireland is now ranked behind only Canada, Japan and Korea.

The OECD report showed that 89 per cent of Irish young people were expected to complete their Leaving Certificate in their lifetime meaning Ireland ranks 11th of 27 countries for second-level school completion and above the OECD average of 83 per cent.

Ireland also performs above average in terms of the percentage of students progressing from second-level to third level.

Neither employed nor in education or training

However, the OECD warned that, on average, young people in Ireland will spend more than three years either unemployed or out of the labour force.

A significant proportion of young people are at risk of finding themselves neither employed nor in education or training (NEET), hampering their future integration into the labour market, the report cautioned, adding that NEET rates for 15-29 year-olds stood at around 10 per cent in 2007, a figure which had more than doubled to 22 per cent in 2011."


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Health Care Spending 2010

Health Expenditure 2000 - 2012


Irish health spending contracting faster than any other country except Greece'

Paul Cullen Jul 2, 2013

"Irish health spending is contracting at a faster rate than any other country except Greece, having grown at record levels during the boom, new figures show.

Spending on the health system fell by over 5 per cent a year in 2009-2011, driven by Government efforts to reduce the large budgetary deficit, according to OECD Health Data 2013. In contrast, it grew by almost 9 per cent annually during the period 2000-2009. Total health spending, at 8.9 per cent of gross domestic product, is slightly under the OECD average, but spending per head of population remains above average. Ireland spends more on each citizens health than the UK, Iceland, Japan and New Zealand.

Private sources
While the public sector continues to be the main source of health funding, one-third of funding now comes from private sources as a result of increased charges levied on patients for drugs and appliances.

The OECD figures show Ireland has fewer doctors than most European countries, though more per head of population than in the US or Canada. Ireland has a relatively high number of nurses, though the report warns about comparing data as nurses and midwives can be categorised differently.

Life expectancy in Ireland is a half-year above the OECD average, but up to two years behind Switzerland, Japan and Italy. With 29 per cent of the population smoking, Ireland is well above the average 21 per cent.

Alcohol consumption, while it has declined, is also among the highest in OECD countries, at 9.4 litres per person per year."

OECD Health Data 2013

Total health spending accounted for 8.9% of GDP in Ireland in 2011, slightly less than the OECD average of 9.3%.The recent recession initially led to a big rise in the health spending share of GDP in Ireland,from 7.9% in 2007up to 10% in 2010, as GDP fell sharply between 2008 and 2010 while health spending continued to grow. But starting from 2010, a sharp reduction in health spending led to a decrease in the health spending share of GDP.

Despite the cuts in 2010 and 2011, health spending per capita in Ireland remained above the OECD average, with spending of 3700USD in 2011(adjusted for purchasing power parity)compared with an OECD average of 3339USD.

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Pensions: International Comparisons



"As you can see from the chart above, in 2010, Ireland ranked somewhat average in our public expenditure on pensions, with the inclusion of all government pension costs; contributory, social welfare pensions, non-contributory pensions and public sector pensions.

If you look at the next chart, you can see that the projected change in expenditure is quite significant between 2010 and 2060, Ireland projected to rank third on the table.

The charts highlight the rising cost of State funded pensions which the National Pensions Reserve Fund (NPRF) was intended to offset.

Broadly speaking 1/3rd of the NPRF covered public sector pensions whilst 2/3rds covered social welfare pensions.

The fastest increasing cost is public sector pensions. These grew from an estimated capital cost of 75bn in 2007 to 129bn in 2009. No figures have been produced since, however it is likely that that cost has continued growing.

Source: OECD Review of Pensions in Ireland, 14.09.2012. John Martin, Edward Whitehouse, Anna D'Addio, Andrew Reilly."






'ESB staff anger over 400m pension move'
Barry O'Halloran Fri, Jun 28, 2013

"Trustees chairman warns payment to Government puts scheme under severe financial strain. ESB staff are threatening legal action to halt the payment on the basis that it could undermine the security of their pension scheme, which has an estimated 1.7 billion deficit.

The chairman of the ESBs pension plan trustees has warned the groups chief executive, Pat ODoherty, against plans to hand over 400 million to the Government while its retirement scheme is under severe financial strain.

The State-owned energy company has agreed to pay a 400 million special dividend to the Exchequer pending the sale of some of its power plants, but staff are threatening legal action to halt the payment on the basis that it could undermine the security of their pension scheme, which has an estimated 1.7 billion deficit.

While the row only boiled over in public this week, it emerged that the chairman of the schemes trustees, Tony Donnelly, wrote to ESB chief executive, Pat ODoherty in April warning of the proposals likely impact on the workers pension pot.

Electricity customers in the Republic pay a public service obligation levy designed to pay for Government-approved supports given to green-energy projects, peat-fired generating plants, Tynagh Energy and Aughinish Alumina (above).Electricity cost to rise by 205m due to levy increase

Mr Donnelly, a former financial director of ESB, confirms in his letter that the schemes actuaries reported that, according to the minimum funding standard laid down in the Pensions Act, it had a 1.7 billion deficit at the end of 2011.

Given the large deficit in the scheme [under the States own minimum funding standard regulations], it is difficult for the trustees to comprehend the companys paying a large special dividend to the State which is likely to have an adverse affect on the financial health of the company and consequently the financial security of all members of the scheme, Mr Donnelly says.

He concludes that the trustees would ask the company to reconsider the proposals to pay a special dividend to the State and ensure that the Government are aware of the significant regulatory deficit and risks to this fund and the company.

Mr Donnelly points out that the High Court last year refused to sanction Aer Linguss proposed 500 million payout to shareholders in light of shortfalls totalling almost 900 million in the airlines employees schemes. He warns that the ESB plan could be regarded as a contingent creditor of the company in circumstances where it is underfunded.

Four staff have already threatened to take legal action to halt the payment of both the 78 million yearly dividend from the company to the Exchequer, which it approved at this weeks annual general meeting, and the 400 million special dividend.

Along with this, the general secretary of the companys group of unions, Brendan Ogle, has warned that workers will take all necessary legal, political and industrial action to protect their pension schemes assets.

The groups finance director, Donal Flynn, said yesterday that the company has submitted a plan designed to meet the funding standard to the Pensions Board eight months ago. The regulator has accepted that plan, he added.

Mr Flynn also repeated the companys argument that the minimum funding standard, which calculates a schemes liabilities in the event of it being wound up, is not appropriate in the ESBs case.

He pointed out that the 1942 legislation which first established the scheme does not envisage it being wound up, and for that reason, a different standard should apply.

The funds actuaries confirmed at the end of last year that it was in a position to meet its liabilities as they fell due and that a plan put in place in 2010 to cover a 2 billion deficit was still on track.

One of the key flashpoints between the staff and the company is its description of the scheme in its annual report as a defined contribution plan and an assertion that the ESB has no liability for any future deficit that might arise in the plan.

Mr Flynn, yesterday argued that this description is in line with accounting standards as the scheme has always had characteristics of both defined contribution and defined benefit plans. He said that this is also why the Pensions Board regards it as a defined benefit scheme. They are both looking at it through different prisms, he said.

The ESB changed its definition of the scheme after the 2010 funding plan was agreed."


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Growth Rates, Quantities and Shares of TPER Fuels
1990 - 2011
total primary energy requirement (TPER)
kilo tonnes of oil equivalent (ktoe)



"All fuels, with the exception of coal and renewables, experienced reductions in consumption in 2011. Renewables in aggregate increased by 23% to 831 ktoe and coal use increased by 1.9% to 1,264 ktoe.

Fossil fuels accounted for 94% of all energy used in Ireland in 2011, excluding the embodied fossil fuel content of imported electricity. Demand for fossil fuels fell by 7.9% in 2011 to 12,982 ktoe and has fallen 15% since 2005.

Oil continues to be the dominant energy source, increasing from a share of 47% in 1990 to a peak of 60% in 1999, but falling to 49% in 2011. Consumption of oil, in absolute terms, fell by 7.4% in 2011 to 6,820 ktoe. Over the six years 2005 2011, oil demand fell by 25% (4.27% per annum).

Natural gas use fell in 2011 by 12% to 4,138 ktoe and its share of TPER was 30%. The increase in 2010 was 9.2%, mainly due to the severe winter conditions and increased use in electricity generation. Over the six years 2005 2011, natural gas use has increased by 19% (2.9% per annum).

In absolute terms over the period 1990 2011 coal declined by 39% to 1,264 ktoe. In 2011 the use of coal increased by 1.9%. Increased use in electricity generation accounted for all of this increase as coal use in final consumption in both industry and the residential sector fell in 2011. Over the five years 2005 2010, coal demand fell by 34% (8% per annum).

Peat use fell by 3.8% in 2011 to 761 ktoe and over the period 1990 2011 its use declined by 45% resulting in its share in primary energy falling from 14% to 5.5%. The decrease in use of peat in 2011 occurred both in electricity generation (-2.1%) and the residential sector (-4.8%).

Wind energy experienced a fall in 2010 of 4.8% but grew by 56% in 2011 to 4,380 GWh (377 ktoe), due to a 13% growth in installed capacity and (3% - 4%) higher than average wind speeds and particularly low wind speeds in 2010. The share of wind in overall energy use in 2011 was 2.7%.

The Hydro resource recovered in 2011 to average levels (707 GWh or 61 ktoe) resulting in an 18% increase in hydro generated electricity relative to 2010.

Total renewable energy increased by 23% during 2011 to 831 ktoe. On average in the period 2005 2011, renewable energy demand increased by 14% per annum. Since 1990 renewable energy has grown by 395% (7.9% per annum on average) in absolute terms.

Electricity imports fell by 3.7% in 2011 and accounted for only 0.5% of primary energy.

kilo tonnes of oil equivalent (ktoe)
total primary energy requirement (TPER)


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Growth Rates, Quantities and Shares of
Electricity Generation Fuel Mix
1990 - 2011



"Overall fuel inputs into electricity generation fell by 8.6% in 2011 to 4,506 ktoe while final consumption of electricity fell by just 2.2% to 2,140 ktoe (or 24,881 GWh).

The share of overall fossil fuel used in electricity generation was 88% in 2011. This was a 4.1 percentage point decrease in share or 12.7% in absolute terms relative to 2010.

Natural gas remains the dominant fuel in electricity generation but its share fell from 61% in 2010 to 55% in 2011. Natural gas use in electricity generation was 2,500 ktoe in 2011, 17% lower than in 2010.

Fuel oil had a share in electricity generation of 11% in 1990; this rose to 28% in 1999 but in 2011 is minimal at 0.9%. Consumption of fuel oil in electricity generation in 2011 was 40 ktoe.

The share of coal used in electricity generation has reduced from 40% in 1990 to 20% in 2011. In absolute terms the consumption of coal has fallen by 27% over the period (1.5% per annum) to a figure of 913 ktoe. There was an increase in coal use in 2011 for electricity generation of 5.3%.

Peat consumption in electricity generation fell by 2.1% to 480 ktoe in 2011 and by 21% since 1990.

Renewable energy use for electricity generation increased its share from 1.9% to 11.5% between 1990 and 2011. In 2011 there was a 40% increase in renewables contribution to the electricity fuel mix due mainly to the increased contribution from wind. Wind contribution to electricity generation increased by 56% in 2011 while the contribution from hydro increased by 18%. Other renewables in the form of landfill gas, biogas and biomass make up the remainder of the contribution at 1.7% of fuel inputs and their use in electricity generation increased by 5.6% in 2011.

Electricity imports increased by 4.2% in 2011."

kilo tonnes of oil equivalent (ktoe)
total primary energy requirement (TPER)


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Import Dependency of Ireland and EU
1990 - 2011



"Domestic production accounted for 32% of Irelands energy requirements in 1990. However, since the mid-1990s import dependency has grown significantly, due to the increase in energy use together with the decline in indigenous natural gas production at Kinsale since 1995 and decreasing peat production.

Imported oil and gas accounted for 77% of TPER in 2011, compared with 50% in the early 1990s. Irelands overall import dependency reached 90% in 2006 but has decreased to 88% in 2011.

This trend reflects the fact that Ireland is not endowed with significant indigenous fossil fuel resources and has only in recent years begun to harness significant quantities of renewable resources."

kilo tonnes of oil equivalent (ktoe)
total primary energy requirement (TPER)

Indigenous Energy by Fuel
 1990 - 2011



"Figure 37 shows the indigenous energy fuel mix for Ireland over the period. The reduction in indigenous supply of natural gas is clearly evident from the graph as is the switch away from peat. Production of indigenous gas decreased by 85% over the period since 1990 to 285 ktoe and peat by 46% to 760 ktoe.

Renewable energy in contrast increased by 343% to 742 ktoe.

Indigenous production peaked in 1995 at 4,105 ktoe and there has been a 48% reduction since then to 1,801 ktoe.

The share of total indigenous fuels contribution from native gas was 16% in 2011, compared with 54% in 1990. The share of peat increased from 41% in 1990 to 42% in 2011 but in absolute terms peat production declined by 46%.

Renewable energy accounted for 41% of indigenous produced fuels in 2011.
Although peat production fell in 2011 by 23%, peat consumption fell by just 3.8%, with significant stock changes accounting for this difference.

Developments are likely to impact on this trend including the plans to extract and utilise gas at the Corrib Gas Field and the targets for increasing the deployment of renewable energy."

kilo tonnes of oil equivalent (ktoe)
total primary energy requirement (TPER)

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Natural Resources



What are the sources of wealth and taxation for the state?

Irelands economic chickens come home to roost

This article looks at the failure of successive governments to make full use of the natural resources of Ireland leading to the current strategy of heaping more and more new taxation upon the Irish people to make up for their loss of income

Since the formation of the Irish State in 1922, financial sources for the maintenance and development of the state as an independent entity have been in decline. This has arisen through Irelands joining the EEC in 1973 and subsequent Treaties of the EU, to successive governments neo-liberal economic policies that gradually reduced the role and income of the state. Contributing to these problems was the loss of fiscal autonomy when Ireland joined the eurozone in 2002.

Sources of income such as customs duties and charges, fisheries, agriculture, oil and gas, and minerals were all affected in different ways, leaving the increasing taxation of the people as the main plank of the governments policy to extricate itself from the economic crisis.

Since the banking crisis of 2008, government borrowing [1] has increased the national debt [2] from 50.4 billion to 119.1 billion in 2011, more than doubling it in a few short years.

The establishment of a customs union (a free trade area with a common external tariff) was one of the main aims of the EEC. On joining the EEC in 1973, the Irish government lost import duties as a source of income from its main trading partners.

Three years later, in 1976, the EEC extended its fishing waters from 12 miles to 200 miles under the Common Fisheries Policy [3] when it was agreed that fishermen from any state should have access to all waters. Thus, while Ireland owns 23% of the fishing waters [4] in Europe, it is only allowed 3% of the European fish trade quota. [5]

Since joining the EEC there has been ongoing change in Irish farming [6] but with fewer and larger farms, less employment, more specialisation and concentration of production and growth in part-time farming yet agricultural output remains at about the level of 20 years ago. As a source of employment farming has been in decline for a long time, about 24 per cent in the period from 1980 to 1991 and a further 17 per cent between 1991 and 2000.

Recent demonstrations by farming families in Dublin have shown the negative effect of government cutbacks, increased costs and taxes. According to a recent Irish Times [7] article, the protest was called to highlight concerns about planned reforms to the Common Agricultural Policy and the upcoming budget. It also highlighted the margins being taken by supermarket chains at the expense of farmers. Placard messages included No Cap cuts; no farm cuts; no extra costs; regulate the retailers.

More short-sighted policies can be seen in reports [8] that the State is also considering selling off some assets of the forestry body Coillte (The Irish Forestry Board) to private investors. Coillte [9] was established under the Forestry Act 1988, and the company is a private limited company registered under and subject to the Companies Acts 1963-86.

All of the shares in the company are held by the Minister for Agriculture, Fisheries and Food and the Minister for Finance on behalf of the Irish State. Profits have increased from a loss of 438K (1989) to profits of 4.2 million (2009).

Moreover, the company [10] employs approx 1,100 people and owns over 445,000 hectares of land, about 7% of the land cover of Ireland.

More state assets
In the same article, [11] plans to sell off other state assets such as parts of Bord Gis (Gas Board) and ESB (Electricity Supply Board) and its 25 per cent shareholding in Aer Lingus were also being considered.

According to Sinn Fins deputy leader and spokesperson for public expenditure and reform, Mary Lou McDonald, [12] Both the ESB and Bord Gis are wealth generating self-financing companies that have invested heavily in first world energy infrastructure across the island and created thousands of good jobs benefiting hundreds of thousands of families over the decades.

She added, Fine Gael and Labours decision to treat the profitable elements of these companies as a cash cow for bank debt reduction makes no economic sense and reflects the kind of short term policy and political decision making that got us into this economic mess in the first place.

The extent to which the Irish Government has bent over backwards to attract foreign investment in mining - and in the process delimit its share of potential income - can be seen in an extract from a Government Report [13] titled Land of Mineral Opportunities, [14] published in May 2006. Tax incentives relevant to exploration and mining in Ireland include:

*No State Shareholding in the Project and No Royalties are Payable to the State.
*Immediate write-off of development and exploration expenditure
*Corporation Tax of 25 percent (reducing to 12.5% for downstream manufacturing)
*Capital Allowance of up to 120 percent
*Expenditure on rehabilitation of mine sites after closure is tax-deductible
*There are no restrictions on foreign investment in Ireland,
*There are no restrictions with capital repatriation from the State.

Oil and Natural Gas
Over the past 15 years gas and oil [15] have been discovered under Irish waters in the Atlantic [16] Ocean. However, the governments Minister Ray Burke (later jailed for corruption) changed the law in 1987, reducing the States share in our offshore oil and gas from 50% to zero and abolishing royalties.

In 1992, Minister Bertie Ahern reduced the tax rate for the profits made from the sale of these resources from 50% to 25%. In May of this year [2012], an article [17] by economist Colm Rapple stated that a committee that included 12 TDs [MPs] and senators from Government parties and nine from the opposition thought that the terms at which we give away rights to potential offshore oil and gas reserves are far too generous. [] They want far tougher terms applied to all new licences.

So how will the government square this dismal history of giveaways with the upcoming centenary of the 1916 Rising in 2016, an attempted revolution which was initiated with a proclamation [18] read out in the centre of Dublin declaring the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible. The long usurpation of that right by a foreign people and government has not extinguished the right, nor can it ever be extinguished except by the destruction of the Irish people.

This declaration was followed up in 1922 with The Constitution [19] of the Irish Free State (Saorstt Eireann) Act, 1922 which stated in Article 11 that All the lands and waters, mines and minerals, within the territory of the Irish Free State hitherto vested in the State, or any department thereof, or held for the public use or benefit, and also all the natural resources of the same territory (including the air and all forms of potential energy), and also all royalties and franchises within that territory shall, from and after the date of the coming into operation of this constitution, belong to the Irish Free State.

The future?
There seems to be no limit to the governments sticky fingers. The National Pensions Reserve Fund [20] has seen its total value reduce from 24.4 billion in 2010 [21] to 15.1 billion in 2012 with 20.7 billion of the fund [22] spent on preference shares and ordinary shares in Allied Irish Banks and Bank of Ireland since 2009.

As the government props up the banks and pays off unsecured bondholders, it is likely that the forthcoming significant national commemorations will refocus the Irish people on past conceptions of national democracy. Chicken, anybody?

Caoimhghin Croidhein

(December 01, 2012 )
























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Inland Fisheries Ireland

New Study - Angling worth 0.75 billion to Irish Economy and supporting 10,000 jobs in rural Ireland

Scale and value of Irelands angling resource greatly under appreciated - Minister ODowd

The Minister of State with Responsibility for Natural Resources, Fergus O Dowd T.D. today warmly welcomed the findings of a new national economic study which has revealed for the first time that angling and angling tourism in Ireland is generating a dividend in excess of 0.75 billion within the Irish economy every year.

The study, commissioned by Inland Fisheries Ireland, shows direct spending on angling in Ireland amounted to 555 million in 2012, with indirect spending worth an additional 200 million and totaling 755 million. Recreational angling was also found to directly support 10,000 existing Irish jobs, many of which are located in the most peripheral and rural parts of the Irish countryside and along our coastline.

The Study found that 406,000 people were involved in recreational angling in Ireland last year, with over 150,000 of these travelling from Northern Ireland and overseas. Over a quarter of a million Irish adults (252,000) held a fishing rod last year with sea angling along with salmon and brown trout angling seen as the most popular categories where domestic anglers are concerned. The quality of the Irish angling product, the friendliness and hospitality of the Irish people and our outstanding scenery were cited amongst the principal attractions of Ireland as an international destination for recreational angling. Tourism angling spend is estimated at approximately 280 million on an annual basis.



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EU Debt



Europe government's debts: how much do they owe?

European government's combined debt figures are out today.

How bad are they?


Europe government debt: who owes what? Photograph: Julien Behal/PA Wire


10,320,106,100,000: that is the total amount owed by the 27 governments of the European Union. Published today on a quarterly basis for the first time, the figures show a big increase across the contitnent - up from 60.3% of GDP in Q3 2008 to a whopping 82.2% now.

Of that debt, 8.2tn is owed by governments in the eurozone - which is marginally down in the last quarter but still represents 87.4% of those countries' combined GDP. And is up from 67.7% in 2008.

The key data here is from Eurostat - the first time this has been published quarterly

The overall figures show how big rises in debt at the start of the crisis have slowed, with countries such as the UK, France and Germany, bunching around the same place. It also shows Greece's debt shooting up. Italy has remained surprisingly consistent over the whole period, as Berlusconi allowed his country's debt to grow in line with its GDP.


Data summary

European government debt

Government debt in 2011


Debt as % of GDP 2010


Debt as % of GDP 2011


From government securities,

% of GDP

European Union (27 countries) 10,320,106,100,000 78.5 82.2 81
Euro area (17 countries) 8,191,295,000,000 83.2 87.4 80.9
Belgium 361,378,000,000 98.8 98.5 87.5
Bulgaria 5,816,000,000 15.9 15 9.4
Czech Republic 61,388,000,000 39.3 39.8 35.3
Denmark 118,199,000,000 44.5 49.3 41.4
Germany 2,089,756,000,000 75.7 81.8 57.4
Estonia 951,000,000 6.8 6.1 1.5
Ireland 162,200,000,000 88.4 104.9 58.1
Greece 347,204,000,000 138.8 159.1 111.7
Spain 706,340,000,000 58.7 66 54.7
France 1,688,890,000,000 82 85.2 73.6
Italy 1,883,738,000,000 119.1 119.6 101
Cyprus 11,872,000,000 59.9 67.5 48.8
Latvia 8,614,000,000 43.2 44.6 12.5
Lithuania 11,210,000,000 36.8 37.6 30.5
Luxembourg 7,826,000,000 19.9 18.5 9.5
Hungary 78,382,000,000 82.4 82.6 59.5
Malta 4,473,000,000 70.4 70.3 65.8
Netherlands 388,829,000,000 63.1 64.5 51
Austria 214,115,000,000 71.9 71.6 60
Poland 190,475,000,000 55.4 56.3 47.5
Portugal 189,700,000,000 91.1 110.1 70.6
Romania 41,956,000,000 28.8 33.3 19.2
Slovenia 15,884,000,000 38.3 44.4 39.9
Slovakia 28,784,000,000 38.2 42.2 38.6
Finland 89,354,000,000 47 47.2 39.3
Sweden 137,851,000,000 38.6 37 27.6
United Kingdom 1,474,920,000,000 78.3 85.2 70.5


Ireland's debt levels are fourth in Europe

Eurozone debt has fallen for first time since 2007

 Colm Kelpie Published 22 January 2014 11:32 AM

IRELAND had the fourth highest government debt in Europe at the end of September last year, according to the latest data released by Eurostat.

Government debt in the Eurozone fell for the first time since the end of 2007. At the end of the third quarter, the debt-to-GDP average for the euro area was 92.7pc.

This is compared to 93.4pc in the previous quarter.

Irelands debt level was 124.8pc at the end of September. Debt-riddled Greece had the highest at 171.8pc, followed by Italy at 132.9pc, and Portugal at 128.7pc.

In the Budget, the Government forecast debt levels to fall to 120pc at the end of this year, dropping to 118.4pc at the end of 2015 and falling further to 114.6pc at the end of 2016. It is projected to fall to 93pc by 2020.

The countries with the lowest debt-to-GDP ratio at the end of last September included Estonia at 10pc, Bulgaria at 17.3pc and Luxembourg at 27.7pc.

Europe's three biggest economies saw its debt fall, with Germany down to 78.4pc of its GDP and France down to 92.7pc.

Debt the bloc's third largest economy Italy dropped to 132.9pc from its peak of 133.3pc in the previous quarter, but it remains the euro zone's second highest after Greece.

The level of debt in a majority of eurozone countries remains well above the European Union's official limit of 60pc of the value of their economies.


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Transatlantic Trade & Investment Partnership (TTIP)


Transatlantic Trade and Investment Partnership (TTIP)

The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement that is presently being negotiated between the European Union and the United States.

It aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.

On top of cutting tariffs across all sectors, the EU and the US want to tackle barriers behind the customs border such as differences in technical regulations, standards and approval procedures. These often cost unnecessary time and money for companies who want to sell their products on both markets. For example, when a car is approved as safe in the EU, it has to undergo a new approval procedure in the US even though the safety standards are similar.

The TTIP negotiations will also look at opening both markets for services, investment, and public procurement. They could also shape global rules on trade.


What is TTIP? And six reasons why the answer should scare you

LEE WILLIAMS Tuesday 7 October 2014

The Transatlantic Trade and Investment Partnership is a series of trade negotiations being carried out mostly in secret between the EU and US. As a bi-lateral trade agreement, TTIP is about reducing the regulatory barriers to trade for big business, things like food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations. It is, as John Hilary, Executive Director of campaign group War on Want, said: An assault on European and US societies by transnational corporations.

Since before TTIP negotiations began last February, the process has been secretive and undemocratic. This secrecy is on-going, with nearly all information on negotiations coming from leaked documents and Freedom of Information requests.

But worryingly, the covert nature of the talks may well be the least of our problems. Here are six other reasons why we should be scared of TTIP, very scared indeed:

1 The NHS

Public services, especially the NHS, are in the firing line. One of the main aims of TTIP is to open up Europes public health, education and water services to US companies. This could essentially mean the privatisation of the NHS.

The European Commission has claimed that public services will be kept out of TTIP. However, according to the Huffington Post, the UK Trade Minister Lord Livingston has admitted that talks about the NHS were still on the table.

2 Food and environmental safety

TTIPs regulatory convergence agenda will seek to bring EU standards on food safety and the environment closer to those of the US. But US regulations are much less strict, with 70 per cent of all processed foods sold in US supermarkets now containing genetically modified ingredients. By contrast, the EU allows virtually no GM foods. The US also has far laxer restrictions on the use of pesticides. It also uses growth hormones in its beef which are restricted in Europe due to links to cancer. US farmers have tried to have these restrictions lifted repeatedly in the past through the World Trade Organisation and it is likely that they will use TTIP to do so again.

The same goes for the environment, where the EUs REACH regulations are far tougher on potentially toxic substances. In Europe a company has to prove a substance is safe before it can be used; in the US the opposite is true: any substance can be used until it is proven unsafe. As an example, the EU currently bans 1,200 substances from use in cosmetics; the US just 12.

3 Banking regulations

TTIP cuts both ways. The UK, under the influence of the all-powerful City of London, is thought to be seeking a loosening of US banking regulations. Americas financial rules are tougher than ours. They were put into place after the financial crisis to directly curb the powers of bankers and avoid a similar crisis happening again. TTIP, it is feared, will remove those restrictions, effectively handing all those powers back to the bankers.

4 Privacy

Remember ACTA (the Anti-Counterfeiting Trade Agreement)? It was thrown out by a massive majority in the European Parliament in 2012 after a huge public backlash against what was rightly seen as an attack on individual privacy where internet service providers would be required to monitor peoples online activity. Well, its feared that TTIP could be bringing back ACTAs central elements, proving that if the democratic approach doesnt work, theres always the back door. An easing of data privacy laws and a restriction of public access to pharmaceutical companies clinical trials are also thought to be on the cards.

5 Jobs

The EU has admitted that TTIP will probably cause unemployment as jobs switch to the US, where labour standards and trade union rights are lower. It has even advised EU members to draw on European support funds to compensate for the expected unemployment.

Examples from other similar bi-lateral trade agreements around the world support the case for job losses. The North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico caused the loss of one million US jobs over 12 years, instead of the hundreds of thousands of extra that were promised.

6 Democracy

TTIPs biggest threat to society is its inherent assault on democracy. One of the main aims of TTIP is the introduction of Investor-State Dispute Settlements (ISDS), which allow companies to sue governments if those governments policies cause a loss of profits. In effect it means unelected transnational corporations can dictate the policies of democratically elected governments.

ISDSs are already in place in other bi-lateral trade agreements around the world and have led to such injustices as in Germany where Swedish energy company Vattenfall is suing the German government for billions of dollars over its decision to phase out nuclear power plants in the wake of the Fukushima disaster in Japan. Here we see a public health policy put into place by a democratically elected government being threatened by an energy giant because of a potential loss of profit. Nothing could be more cynically anti-democratic.

There are around 500 similar cases of businesses versus nations going on around the world at the moment and they are all taking place before arbitration tribunals made up of corporate lawyers appointed on an ad hoc basis, which according to War on Wants John Hilary, are little more than kangaroo courts with a vested interest in ruling in favour of business.




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Caoimhghin Croidhein is an Irish artist who has exhibited widely around Ireland. His work consists of paintings based on cityscapes of Dublin, Irish history and geopolitical themes ( His blog of critical writing based on cinema, art and politics along with research on a database of Realist and Social Realist art from around the world can be viewed country by country at


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