Small step along road to economic recovery

AGAINST a backdrop of unrelieved economic gloom, the outcome of this week’s emergency EU summit in Brussels was positive from Ireland’s viewpoint and is to be welcomed.

But enormous problems lie ahead and it would be misleading to dress up the EU deal as a panacea for the country’s ills.

By securing lower interest rates and a longer pay-back deal, the economic outlook has become just a little brighter.

And in a welcome sea-change, global financial markets have calmed down somewhat despite warnings of impending defaults by Greece and also, perhaps, Ireland, even though Finance Minister Michael Noonan has ruled this out.

Over the next 15 years, our bailout costs will be reduced by over €800 million annually, which is not to be scoffed at.

The figure is a telling reflection of the punitive nature of the original interest rates imposed by the EU on the Irish people under the swingeing terms of the bailout deal secured by the last government — all because of the unbridled greed of reckless bankers, feckless developers and careless politicians who squandered the Celtic Tiger years.

Ironically, Greece’s difficulty had become Ireland’s opportunity and the new deal represents an important if small step on the road to our economic recovery.

Leaving aside the question of the nation’s economic plight, there can be no illusion about the wider significance of the summit from an EU perspective.

Effectively, the gathering storm clouds, which had threatened the very ethos of the European vision, have dissipated for a while.

It would, however, be foolish to imagine that all is now rosy in the garden. There is a long, long way to go before Greece and other heavily indebted EU states such as Portugal and Ireland, not to mention the much larger but similarly troubled economies of Spain and Italy, are out of the woods.

For the beleaguered citizens of Ireland, weighed down by an impossible burden of swingeing cuts and taxes, there is hardly a glimmer of light at the end of the tunnel.

As Mr Noonan warned, there will be no room for relief in the December budget when cutbacks amounting to nearly €4 billion will be unveiled by the Fine Gael-Labour Coalition.

For thousands of people already being ground down by the terms of the bailout deal, a further swathe of crippling financial demands on their dwindling incomes will be hard to bear.

The stark reality is that the economy is on its knees. With unemployment rising, so many of our young people have emigrated looking for work abroad that GAA parishes up and down the country can no longer field a football or hurling team.

Every day small businesses go to the wall in droves and the depressing closure of retail outlets is blighting once bustling streets.

It would be churlish not to welcome the summit concessions towards Ireland. Arguably the interest rate reduction should be used for the benefit of beleaguered citizens rather than rogue bankers. While fundamental questions remain about Ireland’s ability to repay its debts, there can be no question of sacrificing the 12.5% corporation tax regime on the altar of Gallic envy.

The question facing this Government is how in the name of God can it ask people mired in mortgage arrears and struggling to put food on the table to face further tax hikes and more cuts in vital services?