Greek bailout: Slow our recovery and affect mortgage rates?

Greek bailout: Slow our recovery and affect mortgage rates?

Greek BailoutTaoiseach Brian Cowen will meet the euro zone heads of government in Brussels today to discuss the Greek bailout and Irelands €1.3 billion contribution to the IMF’S rescue plan for the Greek economy. Greece currently has the highest debt burden and the largest interest-rate bill of the euro countries.

Some economists have commented that the Greek bailout decision is not overly welcomed and could be the detriment of all euro countries, including Ireland. In order for Greece to get their act together over the next two years their bailout will have be accompanied by extremely harsh conditions; “If the pain is too little and Greece fails to understand they have to sort themselves out and it ends up costing Germany, the interest rate will go up, which will affect us all. It would mean an additional 0.25% on borrowing, so the cost to us all could be huge… In Ireland it will slow our recovery, more people will have problems with mortgages and companies will be unable to expand”.

Have your say: The Greek Bailout

  • Will is slow Irelands recovery?
  • Or will the EU show the world knows it is serious about making Greece reform its economy, and inturn this would relax the markets?
There are 9 comments for this article
  1. Vincent Mockler at 10:24 pm

    I think the Government are in a very difficult situation here as we are in a deep recession ourselves and if things get any worse for Ireland we could well have to be bailed out ourselves.
    I hope it does not come to that.
    Yes I definitely think the Greek bailout will slow down our recovery rate.
    The Government here should have a strategy to improve the jobs crises here instead of wasting taxpayers money on a bank passed its sell by date, namely the Angol Irish Bank.

  2. Dermoxxx at 10:40 am

    Greeks are causing a week Euro this is good for us because it makes exports (outside the euro zone) cheaper and imports more expensive this also means that we will have higher inflation rates but if we can take the pain without wage increases it’s exactly what we need to become more compeditive

  3. John at 11:55 am

    I lived in Greece for two years,
    the Greeks constantly brag about paying very little or in fact no tax and anytime their business drops they simply increase prices, God love anyone visiting Greece this summer, they will be screwed.

  4. Noel McAuley at 10:47 am

    Hey don’t worry, life goes on. The world is a global village with it’s economic swings that happen ftom time to time, we are in the euroclub so we should help others as we would like them to help us.

  5. David in Dublin at 10:38 pm

    Ireland has 4x more debt per GDP than any country in the world (if you include private AND public). It’s only the 7th worse country for governmental debt (as a proportion of GDP), while it is ranked the 10th most likely country to default (according to the CDA), just after Iraq.

    The government agencies that are sending out the current spin on the recession being over are failing to point out that another 3-4 billion of our 12bn deficit will be corrected in the Dec 2010 budget. If you assume 1.5bn comes from more tax intake, then that’s still (a) 2.5bn of cuts + taxes (b) 8bn more borrowing this year, on top of our 120bn Euro of existing borrowing.

    With our gargantuan debt, and our drug-like dependency on borrowing from banks, of course we’ll be affected the jitters introduced when Greece defaults on its debt payments later this year. Our 10 year bond rates are already at the highest delta ever compared the German 10 year bond rates.

    And with continuing anti-cyclical economic measures of cuts+more taxes during a depression, not least to try and cope with our huge borrowing requirements made worse by Greece, of course our economy will be slower.

  6. Cameron Mitchell at 10:37 pm

    Any EU member that doesn’t live up to its obligations should be eliminated from
    membership, at least after it has been given ample opportunity to comply.

    This will preserve the integrity of the Union.

  7. Stephen Byrne at 1:22 pm

    Of course Ireland should participate in the Greek bailout and with it show solidarity with a partner european state. What is the point of having a European Union if we are not there for the Greek people when they need help.

    However, Greece needs to get its finances in order just like Ireland needs to.I believe the problem has arisen due to lack of regulation by the Central European Bank and perpetual low interest rates which has caused over supply of money and questionable lending criteria.

    Just like the rest of the Euro Zone Area, Greece will need have along and hard look at where its future lies and maintain a sense of sanity for both the future of Greece and The Union.

  8. Lenny at 12:37 pm

    Greek is to sovereign debt what Lehman was to bank debt, it has to be bailed out, if it is’nt then we have a double dip and it wont be a case of slowing recovery but another drop and a long stagnation.

    Interest rates will have to go up at some stage and it wont be Greece that will drive that but rather inflation caused by central banks printing money.
    0.25% of a move in lending rates is not huge low rates are a legacy from the last 10 years but are a blip on the long term average.

    If Ireland is to recover then pay cuts need to be taken and it needs to become a low cost highly educated service economy in conjunction with a low volume exporter of something, nothing to do with Greece.

    BTW “Greece “getting their act together”?, 2 years ago we had a taoiseach urging people to buy property in effect encouraging people to lever up causing the problem Ireland is in now, now thats criminal!

  9. Keith at 12:13 pm

    of course it will affect our recovery but if swings in roundabouts. We got plenty of handouts from EU states over the last 30 years!

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