Heads up to Random Walk for this one. And, ahem, McWilliams for the overdraft line. Ireland’s gross external debt increased by 262% under Fianna Fáil and the PDs, from around €521 billion in 2002, to over €1.36 trillion as of 30 June 2007. The gross external debt, according to the CSO, consists of “the gross external debt of all resident sectors (i.e. general government, the monetary authority, financial and non-financial corporations and households), June 2007 report available here.
This is simply one consequence of having an economic policy based around the interests of your political bagmen, rather than the economy itself. There is absolutely nothing random about any of this. Furthermore, to argue that to owe so much is not a problem in a world where credit has just burst, is to wait for the planes to land on Fantasy Island.
At first I thought the headline looked shocking. Then I looked at the list of the top 10 indepted countries as shown in the CIA factbook, and I thought hey, most of the top 10 are pretty solid economies, Germany, Japan etc. It was only then that it hit me that the top ten list is absolute debt and not debt per capita. With that in mind it really does pack a punch. Using round figures it shows we are 26 times more indepted than Japan, 7 times more than Germany, 6 times more than France, and 2.5 times more than our neighbours in the UK.
The CSO report adds a slight qualifier “it should be noted however, that much of this external debt is offset by holdings of foreign financial assets by Irish residents“. I would like to know how much, and what kind of assets and how does this compare with the structure of the debt of those other countries that we have vastly outstripped on a per capita basis.
After watching the last of the Generation Game the other night it all seems to impossibly easy. Its like the 1950’s again, with the diaspora bailing us out: so now the letter from home reads: “send money quick, the economy is sinking”.
Michael Taft has a great piece on this saying:
“we might only be fuelling a situation that Michael Hennigan highlights with such fervour: that overseas commercial property investment was €5 billion in the first half of this year while in that same period venture capital investment in Irish tech companies was €62 million.”
But sure you knew that anyway.
I remember Fantasy Island. One time there was a chap who wanted to be a vampire. I think he was called Bertie?