The implications of the Banking crises can be seen clearly in everyday life with a free fall in Irish consumer confidence and an increase in savings. Figures from the Central Bank shows an increase in net savings by Irish families by almost 300% to over 11 billion euro. This figure represents 12% of income. Irish consumers have saved almost 100 billion of household deposits in Irish banks. Irish consumers are also looking for better deals to allow this saving rate with a growth in cross-border shopping.
On Friday, more figures released by the Central Statistics Office showed that sales dipped across most sectors in September following a slight upward trend the previous month.
But the August figures were deceptive. The increase in new car sales, up 13.2 per cent, on the same month last year and department store sales, up 8.5 per cent, masked very poor overall figures.
The Department of Finance has indicated a loss of 700 million euro in cross boarder shopping in 2009. With the current banking crises, a collection of other issues, the cost of a high savings rate and the increased cross boarder shopping has lead to an economist of Bord Snip suggesting that Ireland may lose its ability to control the Irish State to outside forces. From the front page in the Sunday Independent today Colm McCarthy believes Ireland will lose the running of Ireland to the IMF by February if this years budget fails to satisfy the financial markets. With the upcoming Budget the leaders of the Irish government are under pressure to present a convincing budget that will assure financial markets that Ireland will be able to finance itself. If they fail to do so it will lead to ,as McCarthy has highlighted, "an IMF/European bail-out and economic policy dictated from outside the country for the first time since the State was founded". The Irish government presents its budget on December 7th and in national interest it cannot afford to flunk another task.
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