Rural Ireland offers hope

Confidence is damaged by the admission Ireland cannot fight this crisis on its own

FARMERS and the food industry have been able to take the news of the expected near €100 billion loan to Ireland in their stride.

They have been locked into the EU agri-food sector for nearly 40 years. They have played their part in feeding Europe, and can proudly say there has never been any fear of a food shortage.

Now that there is a money shortage, or the fear of it, it is easier for them to accept that Ireland must play its part.

That means accepting a huge loan, in order to safeguard the financial stability of the EU and the euro area.

If Ireland’s defaulted on national debts, banks in our two largest creditors, Britain and Germany, would require huge domestic bank bail-outs, because of their loans outstanding to Ireland of $149bn and $139bn respectively. Portugal would have been next to fail to meet the requirements of the capital markets, and exposure of $78bn could bring down their biggest creditor, Spain, which is already in a precarious financial position. Such was the threat to EU finances that Britain and Sweden, both outside the eurozone, have offered bilateral loans, and G7 leaders in Canada, Japan, and the US have also green lighted the deal.

Public opinion polls indicate a majority are happy to see the International Monetary Fund and the European Central Bank join our government in devising policy to address our financial situation decisively, after three years of public finances being ravaged by bank rescues, a property market meltdown and the global recession.

They will work together towards a return to robust and sustainable economic growth, with deleveraging and restructuring of banks so that they can perform their correct role in the economy.

Confidence is damaged by the admission that Ireland cannot fight this crisis on its own.

But it may help to look at the food and farming sector, long accustomed to direction and aid from Brussels, and now ready to hit the ground running, confident that Europe supports its aim to produce quality food competitively from our pastures.

IFA president John Bryan was quick off the mark on Monday with a call to focus all our attention on recovery, and a pledge that the farming sector will do all in its power to drive export-led growth and recovery.

Rural Ireland also offers the potential for economic recovery through our huge capacity for renewable energy, particularly from the wind and waves.