The Curran Account: Free of the Troika. Now what?
MICHAEL Noonan described it as a "red letter" day. As Ireland passed its final bailout test, we knew the last Troika cheque was in the post.
We are free to exit the programme in December. The Government didn't want to be too triumphant about it during the week, but felt the need to mark their achievement with a few choice phrases, like "historic day".
Sovereignty may have been restored, on paper, but we have to ask what it actually means, given what we have signed up for. The end of the Troika gives us the freedom to borrow from whomever we like, or at least whomever we can. It doesn't seem like much of a freedom.
The Troika will continue with two visits a year until we have paid back all its money sometime around 2023. And who knows, if things don't go to plan – they may be back.
The Troika might at least be praised for keeping us afloat. It lent the Irish State money at interest rates that it couldn't have got elsewhere. But what is the legacy of the last three years?
* Debt, debt and more debt: When the Troika arrived, our national debt was €144bn and counting. It is now around €200bn. The State must find €9bn a year in interest payments, and that is before we even pay a single nurse's salary. Our debt to GDP ratio is around 123 per cent and will only have fallen to 95 per cent by 2021 – and that's if things go according to plan.
* Austerity: The Troika presence forced the Government to sign up to a timetable for correcting the public finances. We would have had to reduce it anyway, but the deal dictated the pace.
Perhaps we never would have made it at all, if it was left to Irish governments on their own to introduce the cuts that were required. The Government made tough decisions and managed to avoid Greek-style street chaos. But it failed to get a Greek-style debt write-off.
* Lack of reform: A great opportunity was lost to reform many aspects of the economy and the State. Even the hard-nosed IMF had to keep pushing the Government to address things that would be beneficial to Irish citizens in need, such as tackling unemployment and mortgage arrears. The "cold, faceless" IMF were the ones kicking the Government to slash its medicines bill, where the State was paying up to 25 times more for certain drugs than in Britain. Reductions have been made – but the Troika believes a lot more should have been done. The IMF also wanted to see vested interests tackled with greater reforms, such as in the legal profession.
* Privatisation – what privatisation? Having committed to sell down a load of State assets, the only thing that has been sold is the National Lottery licence. Part of Bord Gais is in the process of being sold, but not done. The State still owns its Aer Lingus stake. No real change there.
* Mortgage arrears – the worst is still to come: The Troika kept getting on to the Government and the Central Bank to force banks to deal with the mortgage crisis. Progress has been slow and the really difficult part of cleaning up the mess is only just beginning. Six and a half years after house prices began to fall, five years after the bank guarantee and three-and-a-half years after recapitalising the banks, mortgage arrears solutions are just getting going.