EU/ECB needs to realise debt burden must be shared

When our economy imploded in 2010, the bailout provided by the Troika in 2010 was calculated on the best estimates of how long it would take Ireland to balance its day-to-day income and expenditure and the best estimates were this could be achieved by about 2014/15.

The Troika were also able to take advantage of a weak government, for whom no stroke was too risky if it meant Fianna Fáil clinging to power for longer, and demand that it issue a blanket bank guarantee before there would be any bailout provided. The result was that Ireland received a bail-out of €85bn, which was €35bn for the banks and €50bn to be used for day-to-day spending in the years ahead until we were able to cut our coat to our cloth and this was to repaid with interest.

If the bank guarantee had never been agreed to, it is not unreasonable that affected banks would have restructured their bad debts long ago and agreed debt write-offs to consumers and business. The sky wouldn’t have fallen in and some semblance of normal economic activity would have restarted. As a country, we would also now be far ahead of where we were expected to be at this stage in getting our day-to-day spending under control and the Government would have some room to afford a stimulus package.

Instead, our ‘new’ Government thinks the more pain it inflicts on the public the better it reflects on that Government, and in the plush corridors of EU la la land where no one has experienced any austerity and where the financial services lobby seems to have free reign, this may be so.

Even still, it should come as no surprise to Fine Gael and Labour, given their abject failure to reform any of the salaries, expenses, pensions and allowances paid to the political class, that we don’t believe them when they threaten us about what will happen if we don’t vote Yes to the Fiscal Treaty.

The fact is we can afford to bail out the banks or we can afford to sort out our public spending, but we cannot afford to do both, nor should the public in any country have to.

We have more than showed willing, but when we default on the original bailout, which the markets have already decided we will, given the unsustainability of the debt burden placed on this country,, instead of asking is it not time that banks were made to face the reality of restructuring — as they have elsewhere without the sky falling in — the best the EU can come up with, is to make us take on even more debt to keep repaying the previous unsustainable debt.

Where will it all end? Will we end up having continuous bailouts?

It is utter madness. There has to be an element of collectivity within the EU or the whole project is in danger of failing. By all means, countries need to reform their budgetary processes and tackle their public sector debt levels, but the only way to foster new economic growth in the EU and create jobs is for the IMF, EU, ECB to accept that the debt burden must be spread evenly and that includes the private sector taking its share of debt write-off.

Every time I see Enda Kenny patronising me about a household charge, water bill or accepting less public services for an elderly parent, the first thing that comes to mind is that since 2002 this same man has been allowed, by the political system he is part of, to enrich himself with € substantial expenses, tax-free, on top of his salary, and when was the last time he felt worried about paying a bill or having to use a public service? Yet he expects others to do what he himself, and his colleagues has insulated themselves against.

Until the person telling me to vote for the Fiscal Treaty is experiencing the same worries that people like me do, about making ends meet, worrying about future financial security, about a pension, about worsening public services, then I’m inclined to err on the side of caution and disbelieve everything they are telling me.

Desmond FitzGerald

Canary Wharf

London