He who pays the piper calls the tune

THE prospect of a June reduction in the interest rates — possibly backdated — charged by the EU/IMF for our bailout billions is very welcome.

Sadly, no matter how welcome it is, it will make no great difference to our precarious situation.

Just as Portugal discovered this week, when Europe’s paymasters told them their rescue deal depended on budget cuts far more severe than those rejected by their parliament being implemented, we are likely to face equally stark and unpalatable choices.

As Europe’s strong economies are forced to support their weaker neighbours to protect the euro it is likely that ever more stringent conditions will be attached to relief packages.

It is inevitable that the huge gap between what the state collects in various revenues and what it pays out to run this small country will come under ever more rigid scrutiny. This will inevitably lead to income reductions for those who are paid by the state, even if such a scenario is precluded by the Croke Park deal. After all the IMF or the ECB are not signatories to that arrangement. This is the hard reality of losing our economic independence.