Beijing News Ireland is also a real estate crisis,

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Beijing News reported on December 2

IMF850 billion euros the EU and Ireland under the rescue plan, it seems is getting into the Greek political ecology. Irish Government kindly consider the EU side is a huge relief funds, while the residents of Ireland to protest. Not surprisingly,[link widoczny dla zalogowanych], then, if when Portugal, Spain and even Italy, a similar crisis, the same problem is likely to be repeated.
present for the 850 billion euro Irish rescue package of specific arrangements for the approximately 35 billion euros out directly to the Irish banking system, while the remaining approximately 50 billion euros loan will be used for the Irish government expenditure . As the interest relief funds of up to 5.83%, some people described as its usury.
strictly speaking, the current crisis in the banking system crisis in Ireland and the Financial Crisis of the mixture. Through the Irish crisis, we could see traces of the U.S. subprime mortgage crisis,[link widoczny dla zalogowanych], but also the crisis can be found in the Greek-style legend. But the Irish crisis prominently reflected in its real estate bubble burst on the Irish Government's fiscal drag.
before the global financial crisis, the Irish economy over the years maintained a 5% -11% of annual growth, while other EU member states Guamu mess. But over-reliance on real estate and financial services supporting the Irish economy, and carries out the huge economic bubble, making Ireland the first half of 2008 due to the housing bubble burst and fall into the banking system crisis.
data show that from 1995 to 2007, Irish house prices rose an average of 3 to 4 times the price relative to the coefficient of household income growth from 4 to 10. Irish house prices was a record high and even the most all members of the OECD. From 1996 to 2006, 10 years, Ireland real estate in the proportion of GDP doubled, from 5% to 10%.
no denying that the Irish crisis real estate bubble fission into the financial and banking system crisis, the crisis is precisely the traditional interpretation of mapping out the process.
economic boom before the economic and financial resources deployed in more areas of real estate and other capital-intensive, leading to excessive investment in capital goods, consumer goods underinvestment. Over-allocation of economic and financial resources in the field of capital goods led the field rely more on trade rather than other spreads, such as lead real estate bubble; and with the increasing load mismatch of resources, unsustainable and eventually led to the housing bubble burst, so fission the banking system crisis.
visible crisis in the EU and the IMF Ireland and other challenges of the crisis is actually much higher than that of Greece. Unfortunately, the current EU and the IMF to help the Irish out of the prescription is a serious flaw in the Greek version --- bailout is to ask the Irish government, such as behind the reduction in fiscal deficit and increase payroll taxes and other tax increases; and this emergency of emergency relief measures, the euro area seems to deliberately avoid the market based on market mechanism and other means of debt restructuring. Unfortunately, the government can reduce the deficit, while reducing the risk of debt accumulation, but it can not solve the problem of government debt solvency.

EU economies in step, the current financial deleveraging means that sluggish domestic demand, let the market crisis in the country ease its solvency guaranteed, you will need to reflect the the sustainability of its debt and increase the predictability of government, and the government income and economic growth in external demand, the market needs more support; Clearly, in the sluggish global demand, the dependence on external demand is how the instability and lack of predictability. Unfortunately, the EU and the IMF out of the increase in taxes and other prescriptions, ostensibly to increase government revenue, actually strangling the vitality of the private sector in countries in crisis.
view of this, we believe that where the debt crisis in Europe,[link widoczny dla zalogowanych], the traditional Keynesian only emergency rescue package, but not fundamental to contain the crisis deepened, the objective needs of the market Thatcher and Reagan-style rescue package. That in the EU and IMF for emergency assistance at the same time curb the spread of the crisis need to strengthen the market voluntarily restructure debt; also need tax cuts and other means to liberalize the private sector to create economic value added vitality.
(This article Source: Beijing News)
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