Austerity - The Low Hanging Fruit !!

As the dust starts to settle on the seventh austerity budget in five years, the ripple effect of many of these measures will take many months to really hit home. Once again those affected are the most vulnerable and those most in need of help – the low hanging fruit which are easiest to reach and place in the bucket. In a country crippled by debt, there had to have been other options but the elected voice of this country failed again to act.

The last five years has seen one laceration after another inflicted upon the back of those with the most heaviest burden. Has it ever been any different? Hundreds of years ago, the same class of people would have been at the front of the line, cannon fodder for any opposing army. The Generals would have held back in the rear, still enjoying the finery's of life whilst everyone else laid down their life in a bloody mess. Its not much different today, the politicians pontificate in Leinster House, protecting their brethren, flexing their muscle and letting others bear the pain. I'm as far from a socialist as you can imagine but I laugh at modern day politics. Twenty years ago in the City of London, every time an election loomed, every trader and banker was making plans to move location if Labour won as the higher rate of tax was set to rise. They didn't have far to go, Dublin would have been fine as the Labour here is really a sheep in wolf's clothing and wouldn't have been worth bothering about

Yes, the Budget complies with Troika guidelines but in taking from those most in need is not only not addressing the real debt problems in this country, is adding to them. Banks are now remodelling your debt, some may call it restructuring but don't be fooled. Right now its all about compliance, a box ticking exercise to make sure the Troika is on side. Never forget the banks have the security of your home if you have a mortgage. Unless there is meaningful restructuring with an element of write down, you will likely find yourself back in a situation where you can't afford to pay at some time in the future, now very possibly, the very near future. The bank's will not care if they have to move on your house in one, three or five years time, they always have the security of your bricks and mortar. When the dust settles on the 'Troika' era in Ireland, the banks have ticked their boxes and been complicit. I can guarantee two things

The banks, if not already will make huge profits with little recourse to the taxpayer, and secondly

banks will be far more aggressive in the repossession of homes in the future.

That's their way of saying thank you.

Nick Leeson - Partner GDP Partnership