We need to secure a better deal for bailout
This is on top of the €35bn earmarked for the banks under the IMF deal.
Dukes has fed the uncertainty about the banks, but it is the case that the latest assessment of the banks capital needs will not be known until sometime in March when the PCAR (Prudential Capital Assessment Review) process is finalised.
As concerns deepen over the banks there is indeed no certainty where this bill will end up and claims that it could run to €100bn no longer look dramatic.
All the major parties agree we have to do a new bailout deal.
It is getting increasingly difficult to see any basis for hope for this economy and one of the reasons for this, apart from the disastrous collapse of the banks and the construction industry, is the saga about how much capital the banks will need, and the fact that we rushed in with a blanket guarantee in September 2008.
It is interesting to note that vox pops on the street are still showing fierce anger among citizens over the behaviour of our bankers, but the reality is we have to try and move on from that.
Whatever the final cost tally, it is becoming increasingly clear the mounting burden of debt is set to crucify us in the years ahead.
This week one senior economist warned it will take us 20 years to get our debt/GDP ratio back within EU guidelines.
This is because the economy has been so weakened by the bailout of the banks and the collapse of the construction sector, we will not generate enough taxes or economic growth to get the figures back into line any quicker than that.
The four-year term is a short timeframe to reverse the damage caused by the construction boom and the bank meltdown.
We have no option but to go back to Europe when the election is over and cut a better deal.
In effect we have to secure new bailout terms.
Dermot O’Leary of Goodbody Stockbrokers said we have no option but to take the fight for better terms to Europe.
He warned against any unilateral action on bond holders but like others, says we should seek substantial write downs on the un-guaranteed and unsecured bonds.
With the next two years about €13bn of those bonds are due for repayment and that mountain of debt has to be the target of our politicians when we go back to talk to our European partners at the end of March.
Either we secure serious write-downs or we will have to rely indefinitely on an ongoing bailout or else default.
At the end of March we will go head to head with our EU partners to discuss the state of the economy and the implications of the EU/IMF deal.
Hopeful signs are emerging that some member states are conceding we should not as Irish citizens be forced to carry the can for all of the money owed to German and other lenders.
In truth the blanket guarantee is looking more and more like a disaster, but we have to come up with arguments to broker a new deal.
German and other banks lent willingly to us during the boom clearly without carrying out risk analysis, and also to blame for the disaster that has befallen us.
It is not acceptable any longer that Irish taxpayers should be asked to put billions of euro into the coffers of major banks who are well capable of living with the loss when clearly Irish citizens are being beaten into the ground.
Even if Angela Merkel and her French side-kick Nicolas Sarkozy want to nail us to the cross to defend the integrity of the euro their stance has to be seriously challenged.
This is survival time. Earlier in the week Sinn Féin’s Gerry Adams told RTÉ radio he was the “mon” to look the eurocrats in the eye and put them straight on a few home truths.
We need somebody with his steeliness going into those talks. We are in trouble and we have to persuade Europe it is in all our interests to find a common solution to an issue that belongs to Europe as well as us.
