EU/IMF Deal A Significant Coup

The Taoiseach’s success in re-negotiating Ireland’s EU/IMF debt, resulting in savings of up to 800 million euro a year, is a significant coup indeed, particularly in light of claims by the previous administration that no reduction in the rates being charged could be realistically achieved.

The Taoiseach’s success in re-negotiating Ireland’s EU/IMF debt, resulting in savings of up to 800 million euro a year, is a significant coup indeed, particularly in light of claims by the previous administration that no reduction in the rates being charged could be realistically achieved.

Following protracted negotiations, EU leaders agreed sweeping new plans to save the Euro, including slashing Ireland’s interest rate on its yearly payments and an extension of the period which the country will be given to pay back its bailout loans.

A particular achievement was the negotiation of such major concessions without having to capitulate on the country’s low rate of corporation tax.

The radical new overhaul of the EU bailout fund has ensured that Ireland’s massive debt burden had been substantially eased but it is vitally important to understand that this is just the first step in the long and difficult journey which still lies ahead.

Many will have hoped that the re-negotiated deal agreed by EU leaders would lead to an alleviation of austerity measures which have been flagged as inevitable to deal with the difficulties facing us. They will have hoped that the substantial reductions in payments would result in financial impositions of a far lesser scale than have been widely suggested.

Those hopes, however, have been firmly scuppered by the Minister for Finance, Mr. Michael Noonan who has warned that rather than alleviating the harsh measures proposed, the deal re-inforces Ireland’s commitment to imposing strict structures to deal with what continues to be an extremely difficult and complex situation.

One of the measures which the Government is bound to impose is a household tax, the details of which were due to be signed of on at a meeting as we went to press.

What is expected is a 100 euro water and property tax, designed to raise upwards of 150 million euro a year. This will certainly prove to be the first major challenge for the Government - in terms of the opposition which it may well receive - and the opposition parties will undoubtedly attempt to make political capital – as is the nature of politics.

However, though the revised deal provides some optimism at a time of economic woe, it is not the panacea which many will have hoped it would be. There are still extraordinarily difficult days facing the country and it remains incumbent on the Government to ensure that those who are experiencing the very worst of the economic downturn are protected in some fashion from further pressures.

In certain quarters they have been identified as those on low incomes, or Government benefits, but, whilst we readily acknowledge the difficulties they face, the reality is that there are huge numbers of people across the social divide suffering from the financial nightmare which we now endure as a nation. There are all deserving of our sympathy.

The deal negotiated by Mr. Kenny and his team is laudatory, and the need for strict controls are understandable, but the human suffering which has, and is, being endured daily must also given huge consideration before any measures are implemented which will greatly exacerbate the genuine difficulties of so many people.