Deadline extension a cause for celebration

Good news is rare these days — so rare that when it comes around, it deserves to be celebrated.

It is far from the answer to Ireland’s or Portugal’s fiscal difficulties, nevertheless the seven-year extension of the deadline to repay bailout loans is a welcome, albeit small, reprieve for two countries strangled by austerity.

It would be premature to shed sackcloth and ashes, but this deal will help us to exit in better shape from the bailout programme at the end of the year. Clinched by the finance ministers of Europe, it is expected to receive the blessing of the parliaments next week.

For a change, a dash of praise is warranted for the Fine Gael/Labour Coalition much criticised, and rightly so, for embracing without as much as a demur the harsh Troika bailout programme.

Effectively, politicians had the comfort of blaming the IMF and European Central Bank for austerity measures which then were imposed on the Irish people with the vigour of zealots.

That said, however, full credit is due to Finance Minister Michael Noonan, whose tireless work behind the scenes helped greatly in securing the same extension arrangement as Greece.

Yesterday’s was the ninth review of Ireland’s bailout programme and ministers will no doubt be pleased to win again the ‘best boy in class’ prize, with this country singled out as “a living example that adjustment programmes do work”.

For ‘adjustment’ read ‘austerity’ and ask any unemployed or disabled person for their response to accolades which undoubtedly lose their lustre when eyed from the dole queue or a wheelchair.

Before Ireland begins to gain any material benefit from this agreement it will be 2015, when loans of €10 billion fall due. Effectively, the repayment deadline is now being pushed back until 2022, an extension not to be sneezed at in hard times.

By no stretch of the imagination will the deal transform the harsh measures of austerity into less punishing strictures for the beleaguered Irish people. But it is a signal of strong European support for the two countries that will make Ireland more attractive to investors, hopefully convincing them to buy government bonds as a long-term bet for their money.

The argument that austerity alone is not the answer, as underlined by former IMF Troika member Ashoka Mody, ought to be given more serious consideration and should inform future policy.

Irrespective of the gloss which Government ministers and other elements of the Troika have put on the existing programme, it is hard to argue against the fact that austerity is not only crippling this country’s economy but is also militating against growth throughout Europe.

When austerity becomes the hallmark of any country, every silver lining appears to have a dark cloud. In Ireland’s case, it is the storm cloud now looming over the controversial Croke Park proposals for swingeing pay cuts in the public service.

With unions nearing the end of the balloting process, Public Expenditure and Reform Minister Brendan Howlin yesterday took the political initiative, scotching suggestions of further talks on the Croke Park proposals and warning that legislation will mean a 7% pay cut across the board. But with nine unions currently lined up in trenchant opposition to the present arrangement, and others still undecided, the outcome of this vital issue and arguably the fate of this Government are now hanging by the finest of threads.