Skip to main content

Bailout Is Most EU Gave...

Bailout will total more than the EU ever gave us...

Noonan says interest rate must be renegotiated by next government:

THE €85bn IMF-EU bailout will come to more than the total amount of payments received since we joined Europe in 1973, the Sunday Independent can reveal.

Fine Gael's Michael Noonan said yesterday that this stark fact showed why the interest rate levied on Ireland must be renegotiated and that any new government's hand will be strengthened by this revelation.

In cash terms, Ireland has received €63.7bn from Europe in various agricultural, social and cohesion funding -- far less than the bailout forced on the Irish by Jean Claude Trichet's European Central Bank in late November.

When those payments are adjusted for inflation, they total €99bn -- that is fractionally more than the total cost of the bailout when the penal interest rates are factored in.

When Ireland's payments to Europe are subtracted, our net receipts from the EU budget amount to €41bn, of which no more than about €20bn could be classified as in any sense discretionary.

In 1973, Ireland received funds totalling just €47.1m from the then EEC, but by 1984 that figure had shot up to more than €1bn a year.

Payments into Ireland peaked at €3.2bn in 1997 and 1998 and have been falling steadily ever since.

According to the latest figures available from the Department of Finance, in 2009 Ireland received €1.8bn from various European funds, with the bulk of the money coming from the European Agriculture Guarantee Fund.

The fact that all of the inward investment into Ireland since we joined the EEC will be negated by paying back the bailout fund highlights the horrific cost being borne by the taxpayer because of the mistakes of bankers and developers during the last decade.

Fine Gael's finance spokesman Michael Noonan told the Sunday Independent that Ireland will end up paying back more than it has ever received from Europe.

He said: "These figures strengthen the hand of any incoming government to renegotiate the rate of interest being levied on Ireland, particularly on the sum coming from the EU stability fund."

Mr Noonan was heavily critical of Brian Lenihan's decision not to contest the interest rate on the first tranche of loans totalling €5bn, which was transferred on Wednesday.

As Spain and Portugal seek to contain borrowing costs and avoid bailouts, European governments are considering lower interest rates on rescue loans in exchange for new guarantees to limit sovereign debt.

Ireland became the first nation to tap the fund, created in May, after Greece had received a separate €110bn rescue package.

The ratio of Irish debt to gross domestic product will reach 114 per cent next year, the EU estimates. That's up from 25 per cent in 2007.

"It would be reasonable to lower currently charged funding costs by some 200 basis points to 300 basis points, thereby providing additional indirect financial support," Julian Callow, chief European economist at Barclays Capital in London, said in a January 10 research report.

European finance ministers may discuss lower rates on rescue loans when they meet in Brussels tomorrow.

Other possible changes include boosting the lending capacity of the EFSF, which is backed by €440bn in guarantees by eurozone governments, and expanding its role to allow for debt purchases.

French Finance Minister Christine Lagarde has said that increasing the size of the fund by several hundred million euro will not be sufficient.

The EU must forge a "global package, not a series of individual parcels," she said.


Report by DANIEL McCONNELL - Sunday Independent

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu...

Varadkar says it’s ‘not the worst thing’ that Ryanair is buying up homes for staff

25 of the 28 units in a new development at Fostertown Place in Swords were purchased by Ryanair for their cabin crew. TAOISEACH LEO VARADKAR says he does not have any issue with Ryanair or other companies buying up almost entire housing estates for their staff. He said there is a big difference between companies like Ryanair bulk-buying houses and apartments compared to investment funds. “We are building over 30,000 new homes now every year,” he said. “If you think about it, that’s 70,000, 80,000 or 90,000 bedrooms every year so we are finally seeing housing being built on scale,” Varadkar said. “We want to scale that up this year and next year as well because we do have a rising population and family sizes are getting smaller, so we need more housing and we are making progress,” he said. “In relation to Ryanair specifically, I don’t think it is the worst thing that a company would buy accommodation for their staff. It’s not the first time this has happened, it has be...

Irish Property Overvalued By 30%...

Irish property could still be overvalued by 30 percent... Irish house prices increased by around 330 per cent between 1996 to 2007 – a bubble of impressive scale and duration, but a bubble nonetheless. Plenty of outside observers saw the writing on the wall and said so, but they were overlooked in the Celtic Tiger gold rush. The European Central Bank (ECB), the Organisation for Economic Co-operation and Development (OECD), the Financial Times, the Economist and the International Monetary Fund (IMF) all spoke of dire portents early and often. They were ignored. Cheap and easy money arrived in Ireland just as the tiger economy geared up. The country adopted the euro and access to a large pool of low-cost European finance with it. When the bubble burst Ireland's main domestic financial institutions were wiped out and European institutions and the IMF took over the nation's financial affairs. So the question now is has the country reached the end? According to a report i...