42% of Europe’s banking crisis paid by Ireland

Ireland has paid 42% of the total cost of the European banking crisis, at a cost of close to €9,000 per person, according to Eurostat.

The full extent of the burden should strengthen the Government’s demands for a deal on the bank debt, although Germany is especially reluctant.

The figures show that while the banking crisis cost Berlin €40bn, Ireland is liable for €41bn. With fractions of the population and GDP of the EU’s biggest state, the crisis has cost Ireland 25% of GDP and Germany 1.5%.

Taoiseach Enda Kenny is due to speak in the European Parliament today on the country’s work during its six months at the helm of the EU and is expected to address bank debt and the need for solidarity.

Labour MEP Nessa Childers urged him to point out that the bank debt is neither just or sustainable and must be written down if Ireland is to exit the bailout programme.

“Without burden sharing on banking debt in Europe, any pretence of solidarity left in the EU will be extinguished. If we have no burden sharing on bank debt, if the failed policies of austerity are pushed and pushed, what in the end will be left of our communities, our economies and our democracies?” she asked.

Michael Taft, research officer with the Unite trade union, said the Eurostat figures show that Ireland is a special case and requires a special solution.

“The Government has a real challenge in the negotiations over bank debt. But there is a bottom line here. If any deal does not qualitatively alter these dismal statistics, then it won’t be a deal worth applauding.

“If people are still paying nearly €9,000 each while the remainder of the EU pays only a fraction of that, then it is no deal at all; just a rearranging of euro notes on the decks of a sunken ship,” Mr Taft said.

The average banking crisis debt across the EU is €192 per person, and the figure of €9,000 for each Irish person does not take into account the €18bn put in from the National Pension Reserve Fund.

After Ireland, the German people at €491 per person have shouldered the next biggest cost of bailing out their big regional banks, which invested heavily in hedge funds.

In real terms, Latvia was the second hardest hit, with the banking crisis costing €317 per capita.

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