Friday 9 December 2016

Let's make it clear: we want that money back

The Government should use the €1bn saved on interest to give something back to the people, writes Brendan O'Connor

Published 24/07/2011 | 05:00

SO WHEN is €800m not €800m? At the same time that a default is not a default, apparently. As Enda Kenny, the mouse that roared, walked triumphantly out of the EU summit on Thursday flanked by his VBF and trusty sidekick Lucinda Creighton, he assured us modestly that we were up by about €800m a year. Some people are saying we could be up a billion. And no sooner had we got out the bunting than we were being warned that this made no difference to the austerity programme, because we were only saving money we didn't have anyway.

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Not to be a smart arse about it, but basically, all the money we talk about in Ireland these days is money we don't have. It's mostly borrowed, notional money anyway, so just because they won't be handing us actual cash doesn't mean that we won't be better off to the tune of €800m or €1bn next year.

If you have a huge debt -- as hard as most of you will find that to imagine -- and you are paying huge amounts of interest every year, and someone comes along and cuts your interest bill substantially, then no one is suggesting that makes you rich overnight, but a simple account will still show you that you are better off than you were. If you are paying €5bn interest a year, as we are, and suddenly that is cut by up to €1bn, or 20 per cent, then there is no question that we are better off than before. We are certainly less poor than we thought we were.

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