Saturday 25 March 2017

So what happened yesterday?

Thomas Molloy

Thomas Molloy

Q: I'm just an ordinary sort. Go to work, play a bit of golf and collect the kids from school every day. I have a few quid in the bank and a small mortgage. What does it all mean for me?

A: Well, leaving aside the question of whether anybody is ordinary, it probably means rather more than you would appear to believe. The Finance Minister has even less money than expected at his disposal following yesterday's news, so you can be sure the next few Budgets are going to be savage. More taxes and fewer services for a start.

Q: But didn't Brian Lenihan say recently that he won't be raising taxes any further?

A: He did, but he changed his tune yesterday and admitted everything was back on the table. The good news is that he ruled out closing schools and hospitals so your children will still have somewhere to go every day. But you can be pretty sure the local teachers won't be buying more white boards any time soon.

Q: Is there anything I can do to avoid the storm?

A: It's difficult to say, but I wouldn't count on a pay rise; the employers' lobby group IBEC took the opportunity yesterday to warn that pay rises weren't on the menu until 2013.

Q: I've lost faith in our leaders. As far as I remember, Mr Lenihan said Anglo's bailout would cost €4.5bn just over a year ago. Now the bill is more than six times this amount. The Central Bank, which I used to trust, was also wrong time after time. What do the markets think of all this?

A: There was very little reaction yesterday, which suggests the markets agree with the Government's new estimates. But there's many a slip 'twixt the cup and the lip and we're only one step further on the road to a solution. The markets could still get cold feet but nobody should be surprised at the immediate reaction, as the Government did little more yesterday than tell the markets what they had been saying for months.

Q: Well I suppose we've got to start paying back that €50bn by hook or by crook but I can't quite understand what a figure like that means.

A: Well, a €50bn pile of €20 notes would stretch to the moon.

Q: Frankly, I'm a little tired of those analogies. What does it mean for me?

A: The bailout will add at least €10,000 to the national debt for every man, woman and child. Bear in mind we also have the good old-fashioned national debt, which we are busy inflating by €500m a week, so the total owed by each person is probably three times that. Each working person will have to generate about six times this to pay off the State's total debts.

Q: Put like that, it seems almost impossible. I've got a mortgage and one or two credit cards as well.

A: Nobody is saying it will be easy. Even the usually cheerful Mr Lenihan admitted that it was "colossal" and would take at least 10 years to sort out.

Q: Ten years! I can't wait that long. Well, I suppose I've got the golf to keep me distracted.

A: Let's hope so. But didn't you tell me the other day that your golf course has been moved into NAMA?

Irish Independent

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