Reaction to Budget 2012: Part 1

L-R: Brendan Howlin pictured during the Labour...
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Today we got a look at the first part of Budget 2012 . Minister for Public Expenditure and Reform Brendan Howlin today announced a series of measures that add up to the €2.2bn in cuts.

The main points that I took from today’s announcements:

  • Government will reduce the size of the public service to 282,500 by end 2015
  • €250 added to the Student Registration Fee
  • Student Support funding cut by 14%
  • Student Maintenance Grant cut by 3%
  • No new post Graduate Maintenance Grants
  • Community Employment Scheme: The training and materials grant will reduce from €1,500 to €500 per participant per annum
  • Disability Allowance Cut to €0 for those aged 16 and 17
  • Disability Allowance for under 25s cut from €188 to €100 if under 21 and €144 if under 24. Now same as jobseekers allowance
  • Drugs Payment Scheme increased to €132
  • The frequency of the grant for hearing aids will change from 2 years to 4 years.
  • Winter Fuel Allowance reduced to 26 weeks from 32

There are plenty of other cuts and changes announced, see the links at the end for them all.

To me what stands out from this budget is the Disabled. Above I highlighted the cuts to young people with Disabilities, but on top of that there are cuts to the Equality Tribunal, Equality Authority and the Budget for Equality Proofing is completely gone. This is not how we are going to look after people in our society and allow them to live their lives with dignity.

The cuts also focus on students with an increase in Registration fees and grant cuts. We cannot tax our way out of the recession but we do need a knowledge economy we we want to get out the recession so cuts in Education make very little sense.

In these times it is understandable that the Government faces tough choices, and these cuts were probably hard to make. No one is ever 100% happy we a budget, and very few people will be close to that after today’s announcement. But as An Taoiseach warned us in his National Address, these are tough times and tough measures are needed, but they too need to be balanced. The problem with the cuts announced today is that these same people will be hit tomorrow in any announcement of an increase in indirect taxation, especially a VAT rise.

The Minister for Finance will deliver his Budget statement at 3:45pm tomorrow.

Further Reading:

Budget 2012 (pt 1): the main points of Brendan Howlin’s announcement

Bailing out the Banks

2 euro coins
Image by Landahlauts via Flickr

So last night it finally happened. We formalised the bailout. We are taking an €85 billion loan. We will be paying an interest rate of about 5.8%. We will be loaning money to ourselves.

Yes, you read that last line right.

€17.5 billion will be coming for the National Pension Reserve Fund and the other cash on hand funds.

Who’s fault is this? The Banks.

€35 billion of this is for them. €50 billion is to cover state deficits. They are there because we gave the banks money!

It is a disgrace.

Links of Interest:

A difficult but essential deal –

€85bn rescue package – Unwelcome return to penal times –

At least we know the grim reality –

Announcement of joint EU – IMF Programme for Ireland –

It’s All about Money –

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Ireland ‘in talks’ with EFSF

Symbol of the currency Euro, Black. Exact math...
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The BBC are reporting that Irish officials are in preliminary talks with EU officials about accessing the European Financial Stability Fund (EFSF) for a bailout.

The talk is of a loan between €60-€80 billion to keep Ireland going.

The government has yet to deny that it is talks and officials have stated “it makes no sense” according to the BBC.

One Eurozone official told Reuters, “Talks are ongoing and European Financial Stability Facility (EFSF) money will be used; there will be no haircuts or restructuring or anything of the kind,”.

Next week is going to be an interesting week in Irish Politics.

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The 17th Member of the Eurozone: Estonia

Symbol of the currency Euro, Black. Exact math...
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Estonia is set to join the Eurozone on the 1st of January 2011 according to the Irish Times. Estonia was given the all clear by the European Commission. Estonia will be the fifth of the 2004 intake to join the common currency following Slovenia in 2007, Malta and Cyprus in 2008 and Slovakia in 2009.

Plans by Poland, Hungary and the Czech Republic are still not on track, so they will not be joining the currency any time soon.

It is interesting considering the current state of the eurozone that it is willing to continue to expand.

The Commission stated that “None of the other eight countries assessed in the report is found to meet all the convergence criteria for adopting the euro” Those countries are: Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden.

The Council of Ministers will have to approve this.

Hattip: European Movement Ireland

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Slovakia to Join Eurozone on January 1st

Image via WikipediaOn January 1st the Slovak koruna will join the French Franc, the German Deutschmark and the Irish Punt in the history of Currencies as Slovakia will officially join the eurozone and begin to use the notes and coins as of January 1st. The fixed exchange rate is €1 = 30.1260SKK.

With Slovakia joining it will increase the Eurozone to 16 members of the EU. The number of people using the euro will increase by over 5 million. This will make travel and business between Slovakia and the other Eurozone members easier.

Under the accession treaties for Countries who acceded to the EU in 2004 and 2007 are compelled to join the Euro. Of the post 2004 member states, Slovenia was the first to join in 2007 with Malta and Cyprus following at the start of this year.

2010 will see no countries joining the Euro, but Estonia is aiming for a 2011 changeover. Bulgaria, the Czech Republic, Latvia and Poland are all aiming for a 2012 date for joining the Euro. Poland will have a long road to the Euro as it must hold a referendum and change its Constitution and join ERM II in the first quarter of next year, it is looking unlikely.

Lithuania was hoping to join the Euro in 2007 but high inflation forced the Government to change its plans. Lithuania is currently hoping to join the Euro in 2013.

Previous Articles:
# Ditching The Euro
# 6 days to E-Day for Slovenia and Bulgaria’s and Romania’s Big Day

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Ditching The Euro

David McWilliams had an interesting column in yesterdays indo. While he is on the right track on what caused the economic downturn we are now facing

In economic history, no sovereign country has faced a property downturn, inspired by a ridiculous credit binge, resulting in such huge personal debts without devaluing its currency.

Look at what is happening in the UK and the US. Both countries find themselves in the same bind as we do. They thought that they could get rich by buying and selling houses to each other using other people’s money.

But the idea that we ditch the euro? How much will that cost us?

Businesses will not be for this, they are the ones that will have to change signage, equipment etc. But also the government will have to print a new currency and all the things like that. Its just not economically feasible to spend money on a new currency when we have only had the current one for a (comparable) short period of time.

Germany has lived out a recession that has lasted over 10 years and now Germany is quickly becoming (again) the economic powerhouse of Europe. We will have to weather it out. Our business will have to take “the recession on the chin”, just like Germany did.

While I agree that the Euro is a part of the problem it is something we will have to stick with. It will keep us competitive vs the UK, in terms of dealing with the continent.

While I dont know much about economics, (Its one of the reasons I flunked College) I dont see how ditching it will help us!

Happy New Year! – EU facts

Well its official, 2007 has arrived and I am suffering from the worst hangover of the year so far! 😛 God what an excellent night.

So the EU now has 27 members states, and as many people cant name all the member states I’m going to list them all for you!

Czech Republic
United Kingdom

The European Union’s 27 member states cover an area of 4,336,790 square kilometres (1,674,444 sq mi) and have approximately 490 million inhabitants as of January 2007.[26] The European Union’s member states if combined would represent the world’s largest economy by GDP, the seventh largest territory in the world by area and the third largest by population. The EU describes itself as a “a family of democratic European countries”.[11] The member states of the European Union have land borders with 21 other nations.

From Wikipedia

The Euro zone has 13 states with Slovenia joining it. In fact it is used in more than the 13 states, with other states using it as their currency also.

* The euro is the sole currency in Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia, and Spain. These 13 countries together are frequently referred to as the Eurozone or the euro area, or more informally “euroland” or the “eurogroup”. The euro is also legal currency in the Eurozone overseas territories of French Guiana, French Polynesia, Réunion, Saint-Pierre et Miquelon, Guadeloupe, Martinique and Mayotte.

* By virtue of some bilateral agreements the European microstates of Monaco, San Marino, and Vatican City mint their own euro coins on behalf of the European Central Bank. They are, however, severely limited in the total value of coins they may issue.

* Andorra, Montenegro and Kosovo adopted the foreign euro as their legal currency for movement of capital and payments without participation in the ESCB or the right to mint coins. Andorra is in the process of entering a monetary agreement similar to Monaco, San Marino, and Vatican City.

From Wikipedia

Irish is now a working language of the EU institutions making 23 working languages.

* Bulgarian
* Czech
* Danish
* Dutch
* English
* Estonian
* Finnish
* French
* German
* Greek
* Hungarian
* Italian
* Irish
* Latvian
* Lithuanian
* Maltese
* Polish
* Portuguese
* Romanian
* Slovak
* Slovene
* Spanish
* Swedish

Language barriers

The EU has twenty-three official languages and three official alphabets (Latin, Greek and Cyrillic) for twenty-seven member states (although there are only three internal working languages in the European Commission: French, English and German). One problem that arises is that there are 253 potential two-language combinations between the twenty-three languages.

The European Parliament employs over 4,000 interpreters at a cost of almost one billion euros annually, and documents can take up to a week to be translated into the languages of all member states. One of the problems is that sometimes translation needs to be done across intermediate languages because of a lack of interpreters for some languages, which can often lead to a loss of information and clarity, or even introduce errors into the translation.

It has been suggested, most notably by former UK commissioner of the EU Neil Kinnock, that some of these costs could be omitted by making English the official working language of the EU.

There is a strong argument that all legislation, and indeed all proposed legislation, be available to the public of the EU in their national languages. The EU produces substantial legislation applicable to all member states: debate and accountability would be severely hampered if ordinary people could not have access to documents in their own language.

From Wikipedia

I realise this is a rambling post, and its mainly facts but you never know what you may learn from it! I know I have!

6 days to E-Day for Slovenia and Bulgaria’s and Romania’s Big Day

The 1st of January is going to a big day for the EU. Slovenia will adopt the Euro and Bulgaria and Romania will join the EU

Slovenia will adopt the euro on the 1st of January 2007 at the rate of 239.640 tolars per euro. As a result, the euro area will have a population of 316.6 million, including 2.0 million Slovenians

From the 1st of January, Slovenians will be able to pay in euros or in tolars and receive the change in euros. This period during which the euro and the tolar will both be legal tender (so-called dual circulation period) will end on January 14. As from 15 January 2007 only euro cash will have the status of legal tender in Slovenia. However, it will still be possible to exchange tolars free of charge afterwards

Dual display of prices in euros and in tolars is compulsory since March 2006, which should help consumers getting used to the new scale of values, especially since July when the conversion rate was irrevocably fixed by the ECOFIN ministers.

EU finance ministers and prime ministers have been invited to official celebrations in Ljubljana on 15 January, the deadline for the Slovenian tolar to be removed from circulation.

A guide to the Euro Currency is available from the DG Ecfin website

Preparations in Bulgaria and Romania are under way in Bucharest and Sofia to celebrate their entries to the EU, which could be the last for some time.

Battenberg Square in Sofia will be the scene of Bulgaria’s largest event – organised by a planning committee led by Prime Minister Sergei Stanishev. Bulgaria has declared 2 January a public holiday.

In Romania there will be double celebrations in the town of Sibiu, the Transylvanian capital, which also becomes, along with Luxembourg, the European capital of culture on 1 January.

There will also be joint celebrations at the Giurgiu-Rousse Friendship Bridge on the Bulgarian-Romanian border, where guards will exchange gifts.