Decrying the funereal atmosphere that has enveloped the country since the Celtic Tiger croaked, an upbeat minister of state at the Department of Finance, Brian Hayes, said it is time for the nation to stop moaning and whinging in an incessant “overdose of pessimism”.
“Now that we have had our period of mourning and denial, it is time to begin the process of national resurgence by embracing a new policy of what I would call realistic optimism,” he wrote in an opinion piece on Sunday.
Regrettably for the minister, his questionable “realistic optimism” concept is something of an oxymoron because if one were to honestly assess the country’s prospects for 2012 and beyond, one would have to concede that the outlook is decidedly bleak.
With the country braced in anticipation of discovering what fresh financial hell 2012 will deliver, those of us who routinely prefer to inhabit the realm of realism are all too well aware of the ominous economic portents that the minister seems desperate to blithely forget.
Unemployment, already a national epidemic, is expected to rise, emigration will continue its inexorable increase and growth forecasts for the already flat-lining domestic economy have been cut by everyone from the IMF to the ESRI.
The minister’s exhortation for realistic optimism ignores the fact that realism demands evidence to back up opinions, and absolutely nothing this Government has done to date warrants a sudden, spontaneous upturn in the national mood.
Now, if I was one of the unsecured Anglo bondholders, who will this month share the €1.25 billion our impecunious state intends doling out on our behalf, then I would be positively delirious — or realistically optimistic, if you will.
However, with nothing to look forward to in the coming months except public service cuts and increased taxes and charges, things do not seem too rosy from the average citizen’s vantage point.
While the minister seems to have been raiding banal self-help books for patronising truisms in the hope of improving the national mood, any optimism, realistic or otherwise, that the Government had when first elected has, by all accounts, been well and truly kicked out of it.
The Taoiseach, the Tánaiste and their ministers talked a good game in advance of their landslide victory eight months ago but promises to burn senior bondholders, even those investors to whom the cursed bank guarantee doesn’t apply, have been promptly obliterated.
Attempting to spin the fact that it is now Government policy to meekly hand over billions to professional gamblers, the Taoiseach said Anglo was repaying the bulk of its own bonds and said it wouldn’t cost taxpayers a penny.
“This will not come from the taxpayer,” he said.
However, this is a bizarre proposition that economist Karl Whelan has rightly labelled inane after pointing out: “Even if you wanted to view this repayment as costless because Anglo has its ‘own funds’ to repay the bond, ask yourself who would be the beneficiary of these ‘own funds’ if they weren’t used to repay unguaranteed bondholders? Every cent going to these bondholders is coming from Irish taxpayer.”
So, having dismally failed to convince our EU partners of the merits of not repaying billions to people that we don’t actually owe any money to, and then attempting to shrug off the mammoth repayments as no big deal, the Government latterly said it was focusing all of its efforts on writing down the €30.6bn in promissory notes that have been shovelled into the putrid corpse of Anglo.
Now, this makes perfect sense because, according to the Department of Finance, the interest bill alone for bailing out Anglo Irish Bank and Irish Nationwide Building Society comes to €17.9bn.
It makes even more sense if one listens to Sinn Féin’s Pearse Doherty, who has claimed the total amount of interest payments, combined with capital repayments and the cost of servicing the state’s debt in borrowing this sum, could reach a staggering €44bn — meaning the cost of winding down these two tiny financial institutions could cost this little Republic an incredible €75bn, over twice the country’s entire tax take last year.
So, even though the coalition’s newfangled policy of crudely cutting current spending while simultaneously borrowing equivalently large sums to hand over to unsecured bondholders seems, at best, daft, at least it seemed to be working on the big prize — a writedown of up to €20bn on the promissory notes, which will sink any hope of imminent economic recovery if repaid in full.
That is, until articles starting appearing in newspapers recently, citing “well-placed sources”, stating the Government was “no longer optimistic about a positive outcome” in relation to its attempts to have the debt written down to sustainable levels — although it remains unclear if this dearth of optimism is realistic or not.
According to the Irish Times, the only thing the Government has succeeded in downgrading, in its eight months in office is its own campaign to persuade the European Central Bank to change the terms of the promissory notes it issued to bail out Anglo — and, as a consequence, the entire European financial system.
FINANCE Minister Michael Noonan’s attempts to seek a reduction in the crippling 8.2% interest rate “have not really worked”, the former head of the ECB, Jean Claude Trichet, was “pretty non-committal” on the issue and, best of all, “politically, the Government [is] not optimistic about a positive outcome”, continued the article.
Perhaps Mr Hayes was hinting at this when he wrote: “Honesty requires us to admit that in areas such as banking reform and the debt crisis we continue to depend on what happens in Europe” on Sunday — casually admitting that the opinion of the sovereign Irish state, one of the 27 EU member states and one of 17 in the eurozone, is of absolutely no consequence when it comes to financial decisions that could have catastrophic consequences for every single person living, and some yet to be born, on this island.
If Mr Hayes wants the citizens of this country to look to the New Year with realistic optimism then, I’m afraid, his Government is going to have to actually do something to make that happen — give people a reason to feel that things, just maybe, are going to get better. To date, Mr Kenny and his cabinet have all excelled at telling us what they’d like to do, and emoting their feelings of sorrow and regret about the various calamities that have befallen the country in the past number of years, but they weren’t elected to talk in aspirational terms about notional plans that may or may not happen.
This Government swept to power on a platform of reform — political and financial — but the only thing they’ve managed with aplomb is failing to meet already low expectation. How’s that for realistic optimism?