Wednesday 16 August 2017

At least we know the grim reality

ALMOST all the main lines of Ireland's financial bailout had been well publicised before last night's endorsement of the €85bn agreement by the European Union Council of Economic and Finance Ministers. But the details are still of the highest importance.

They start with the breakdown of the €85bn. Of this, €10bn will go to those voracious consumers of public money, our banks. After that comes €25bn for "contingencies", of which half will be found from the National Pension Reserve Fund. Given the banks' record, the word contingencies does not ring pleasantly.

The remaining €50bn will cover, quite simply, Government deficits. The average interest rate on the loans advanced by the EU, the ECB -- and the other partners in the deal, Britain, Denmark and Sweden -- will be 5.8pc. Such a high rate is disappointing, but better than the previously rumoured 6.7pc.

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