The then finance minister, Brian Lenihan, was in Brussels.)
“I can confirm that the Government have concluded negotiations with our European partners and international institutions, including the European Commission, the European Central Bank, and the International Monetary Fund,” Mr Cowen said.
“We have reached agreement on a programme for the provision of significant international financial support for Ireland. A programme of assistance for Ireland totalling €85bn has been agreed.”
The EU/ECB/IMF bailout was a done deal. Ireland would put up €17.5bn of the money from its own cash and pension reserves, but the rest of the €85bn was comprised entirely of loans. “The estimated average interest rate of the loans is in the order of 5.83% per year based on current market conditions. The duration of the programme is for three years, while the average length of the loans is up to seven-and-a-half years,” Mr Cowen said.
But there wasn’t just a financial cost. After presiding over the economic collapse that led to the bailout, in signing the agreement Mr Cowen and the Fianna Fáil-Green coalition destroyed whatever little of their political reputations they had left. The administration imploded. Fine Gael and Labour swept into power on the back of campaigns that promised to renegotiate the bailout, throwing out some hostages to fortune in the process — Fine Gael’s Leo Varadkar vowed the banks would not get “another cent” until they burned senior bondholders, while Labour leader Eamon Gilmore asserted: “It’s Frankfurt’s way or Labour’s way.”
Reality intervened once they entered office. The senior bondholders would not be burned, and the new coalition continued with the bailout of which they had previously been so critical, but there were some changes. The Government secured a cut in the interest rates, bringing them down to an average of about 3%. And with the troika’s permission, the coalition has also changed specific aspects of the programme.
Today’s Red C poll findings for the Irish Examiner, commissioned to mark the first anniversary of the bailout, show something of a mixed picture for the Government.
Asked if the coalition had done a good job of managing the economy, 45% disagreed, 29% agreed and 26% expressed no opinion. Asked if government should continue to comply with bailout terms, 48% agreed, 30% disagreed and 22% had no opinion.
These findings suggest the majority of those with a view believe the safest place for Ireland to be is within the bailout. That will probably be of some relief to the Government given its policy of continuing with, rather than trying to escape, the agreement.
At the same time, the public seem less than impressed by the coalition’s economic performance. And with a harsh budget looming, the Government is unlikely to change that impression in the short term.