‘Troika’ bailout to wind down

The Dublin government has been told it should not congratulate itself after an announcement that the 26 County state will seek no further bailout loans from the EU and the IMF.

After reaching the point of insolvency three years ago, the decision this week to rely entirely on the sale of sovereign bonds rather than IMF/EU loans means that some economic sovereignty has been restored to the 26-County state.

However, under the terms of the existing loan programme, the state will remain subject to ongoing fiscal surveillance and inspections by the central European authorities for years to come.

The bailout and the extreme austerity drive had come at a “huge cost” to the Irish public, said Sinn Fein party leader Gerry Adams. He said the coalition government “should not applaud itself for decimating public services and leaving families across the state in poverty”.

But Taoiseach Enda Kenny was ebullient. The decision to quit the bailout programme “shows the courage of the Irish people”, he insisted today, even as he warned that the austerity drive would continue. His government would display “the same attitude, the same strategy” despite the new circumstances, he said.

Economists and commentators have expressed concerns that with heavy emigration likely to continue for years into the future, the state’s economy remains ‘top heavy’. Government funds continue to be accumulated by a relatively small number of insider individuals. Tens of millions are paid annually to former politicians and bankers in salaries, pensions and bonuses; routine courtroom procedures can cost millions in legal fees, and Ireland’s public hospital consultants are among the world’s most expensive.

Meanwhile, a number of Irish credit unions have now joined the state’s collapsed banks in requiring infusions of cash to cope with bad debts. One, Newbridge Credit Union in County Kildare, had to be suddenly nationalised last week with a ‘shortfall’ of some 50 million euro.

Amid fears that the country may be ill-placed to deal with a sudden downturn in the economic climate, Kenny insisted that the 26 County state should not have to pay a punitive interest rate on its future debt, and denied his government had made any request for a future credit facility.

“This is uncluttered,” he said. “It shows the courage of the Irish people, it shows the respect and the integrity with which others look at us now. Independent observers, rating agencies and the markets have said, ‘They are moving on’,” he said.

Sinn Fein welcomed the decision not to seek a conditional precautionary credit line, which Mr Adams said would have been akin to a second bailout.

Speaking directly to Kenny in the Dublin parliament earlier this week, he said: “We cannot get ahead of ourselves. The Troika may be leaving, but the Troika mindset remains. Your government has introduced many austerity measures that were not recommended by the Troika.

“You have taxed and cut the most vulnerable in Irish society, unbidden by your European masters.

“Next year, whether the Troika is here or not, you will take 2 billion euro more from the economy in water charges, taxes and more cuts to health, education and other vital services.

“On top of that, we are still subject to the terms of the fiscal treaty, which your government and Fianna Fail pushed the people to support.

“For many more years, we will be forced to keep deficits unsustainably low and to reduce our unsustainable debt burden, inflicted on us because of the policy Fine Gael, Labour and Fianna Fail took in bailing out the banks.

“Taoiseach, your government has secured nothing to relieve us of that odious debt.”

Urgent Appeal