We urgently need to think outside the box

I GREATLY respect Professor Morgan Kelly’s opinion but I do not agree with him on walking away from the EU/ECB/IMF agreement — yet.

It could be our “get out of jail card”. It could also be a one-way ticket to the Stone Age. We simply don’t know.

Therefore it is too risky.

Our best bet is to try to achieve an agreed restructuring unless the burden becomes so great that it would make little difference for ordinary working people. Meanwhile, we shouldn’t sit on our hands. We should embark on a radical growth plan.

The savings ratio has risen from 2.7% in 2007 to nearly 13%, driven by fear.

The danger of home repossession, where people are genuinely trying to repay their debts, should be completely removed. Steps can also be taken to reassure people in occupational pension schemes in the private sector.

Simultaneously the investment deficit must be tackled (gross fixed capital investment has fallen from over €46 billion in 2007 to less than €19 billion).

The Strategic Investment Bank (SIB) should be established immediately, using the residue of the National Pension Reserve Fund to enable it to create venture capital funds.

The SIB should liaise with Enterprise Ireland, using these funds to establish job generating new enterprises and extending existing ones imaginatively risk sharing with the private sector.

The funds and/or the individual projects should issue bonds to attract some of the Irish pensions industry’s €85 billion.

They should also be augmented by a temporary levy on all income over €100,000 per annum to raise a further €1 billion each year for three years.

Those who are levied should receive a dividend on the performance of the fund and could ultimately expect to get their money back. We need to think outside the box. Professor Kelly is correct in one fundamental respect; conventional thinking is the route to perdition.

Jack O’Connor

General President

SIPTU

Liberty Hall

Dublin 1