An economy in crisis - A lot more than banks is at stake

IN an ideal world, where there are certainties, where commitment and honesty are rewarded, a slight hint of optimism might just begin to make itself felt this spring morning.

The state, each and everyone one of us and our children too, have committed resources almost beyond imagining – a possible €9.1 billion, excluding NAMA costs – to try to rescue our two main banks. We were assured, time and time again, that we had no option but to do this. Equally we are assured that our investment will prove money well spent. Most of us can do little other than hope that someone somewhere really knows what they are doing and that those assurances are worth more than the once-enviable shares in those banks.

Yesterday’s welcome announcement that an agreement has been reached between the Government and public sector unions should also encourage that nascent optimism. In a deal that should please far more than just those immediately involved, state workers have been told that they will not face further pay cuts before 2014. For their part, unions have agreed to cooperate with a range of cost-saving measures. Though individual unions have to vote on the package, it offers a degree of certainty and space for essential reforms.