No more heavy lifting — give us the €40bn

A weekend of back-slapping has just passed as Michael Noonan and his fellow ministers clap each other on the back at his success in getting the boys in Europe to let Ireland pay back the money its predecessor borrowed from the IMF.

Mr Noonan agreed in advance that none of the others had anything to lose by agreeing. Why then the self-congratulations? Given that the IMF loan was at 5% or so and money could now be borrowed at around 2%, replacing IMF money with cheaper money was a no brainer.

The fear that many of us had last week when we listened to the hype of Michael’s whistlestop trip to the hotspots of Europe to get agreement from the main players, was that a win here could somehow come back to bite us on the proverbials. We were specifically concerned that we were set to lose any chance we had of getting any meaningful return on the €64bn we, the taxpayers, stumped up to bailout rotten banks, greedy developers, ineffective politicians, incompetent regulators and, of course, the big foreign bond holders. After all, Europe had “promised” some two years ago that we were in for some recovery of the money the Irish taxpayer paid over to rescue the euro from near collapse. We had been led to believe by Enda, Michael and the lads that they would do whatever it took to get Europe to stump up this money. We should never forget that by rolling over, letting the bond holders, aka gamblers, walk free with unjustified winnings courtesy of the taxpayer, we took one for the team. That bailing the banks out cost us north of €40bn (the net figure after bank fees and sale of bank assets). Unfortunately, it looks like we were right to worry.

It now seems that Joan Burton, minister for social protection and Tánaiste, and Brendan Howlin, minister for public expenditure, are working hard to avoid talking about recovery of that €40bn hit and are talking up alternatives.

According to reports, Mr Howlin said that “the situation had changed over the last two years”. He went on that Ireland was now able to borrow at 1.6% and that the Government would look at all options and at what gave the taxpayers the best deal”. Indeed, according to Mr Howlin “we’re going to be nimble and agile and get the best value we can”. I’m not sure we would want to actually speculate on what any of that stuff means.

We do, really, have to ask ourselves if these folk are for real. Rather than get back the €40bn we were unfairly lumbered with, they will come up with another solution. For instance, we will borrow more money at 1.5% or lower and continue paying back billions each year. Should we be asking ourselves if the Government thinks that we do not need that €40bn, why does austerity still stalk the land? Why are hundreds of thousands of people out of work? Why are houses being repossessed? There are a myriad of other examples and they all say one thing — we do not have the money to pay for the services we deserve and need.

The answer to what serves the taxpayer best is easy — what we do need is patently clear. We need the money. If we were promised this money, we must get it.

Unite, one of largest public sector unions, is demanding income tax cuts and pay rises coupled with increases in employers’ PRSI and an increase in taxes to get people spending again. Never mind that some of the measures suggested would make it harder for employers, putting more money in people’s pockets does help to stimulate the economy more.

Rather than have the economy try and do more heavy lifting why not get our dues from Europe, reduce taxes, and particularly the USC, and let’s see the economy stimulated. The recent report from the OECD on corporate tax rates just might make that harder too.