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iLand - Shareholders and Taxpayers feel the Pain
24th November 2010
On a scale of 1 to Ireland, how broke are you? In February 2007 The Bank of Ireland had a market capitalisation of over sixty billion euro. Market cap is the market value of a company’s issued share capital, i.e. the number of shares multiplied by the current price of those shares on the stock market. Today that market cap has collapsed - and as of this morning - With a market cap of $1.4bln, the bookmaker Paddy Power is now Ireland’s largest financial stock!
Another perspective: Facebook’s latest stock market valuation is €105bn. Ireland’s annual GNP: €130bn.
And low-cost airline Ryanair’s market cap tonight is nearly three times that of the entire Irish banking system!
The destruction of shareholder value in the Irish banking system is immense - but the losses and debts of the banks have been socialised and are being borne by Irish taxpayers. The emergency budget will hit people tremendously hard - among the announcements:
- €200 per household property tax for Ireland
- VAT will rise twice to 23%
- A cut in the national minimum wage in Ireland - cut by one euro to 7.65 euros per hour
- Pay cuts in the private sector
- The introduction of domestic water charges by 2014.
Rumours that Steve Jobs is set to use some of Apple’s cash pile to purchase the country and re-brand it iLand appear to be a little wide of the mark!
BBC video coverage of the emergency budget
More here on the Euro’s woes
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.