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Saturday 18 November 2017

Taxpayers face second-highest bill in eurozone to save Greece

Thomas Molloy and Fionnan Sheahan

IRISH people will lend more to bail out Greece than any other nationality in the eurozone bar Luxembourg, according to new calculations.

The Government last night passed a law to allow Ireland to loan €1.3bn to Greece as part of a bailout for the debt-ridden country.

But Fianna Fail and Fine Gael were involved in a spat over the proportion of the bailout.

People here will lend about €280 per head of population to fund the €80bn eurozone rescue package that prevented Athens from defaulting yesterday, according to new calculations from Eurostat.

The only people due to lend more are Luxembourg's citizens who will offer emergency loans worth just under €420 a person to bail out Greece. That's 42pc more than Irish people will pay.

Our larger-than-average per capita loans come as the Government here battles with the worst budget deficit per capita in the eurozone.

Ireland had a budget deficit of 14.3pc of gross domestic product last year and may post a deficit as high as 20pc this year if money used to keep Anglo Irish afloat is reclassified as spending rather than an investment.

The size of each country's contribution to the bailout is determined by a series of arcane calculations based on the size of each member state's economy.

The Department of Finance said the amount paid by each member state was determined "by the amount of capital each member state owns in the European Central Bank".

While Ireland is lending more than most other countries when measured by head of the population, Finance Minister Brian Lenihan and other finance ministers expect Greece to repay the money plus 5pc interest a year.

The Greeks will owe their euro-area allies €7,104.54 per person for the loans.

Germany, where taxpayers largely opposed the bailout, will pay almost 30pc of the package as the area's biggest economy, compared with 1.6pc by Ireland and 0.3pc by Luxembourg.

Contribution

Germany's contribution works out to €272 a person, the sixth highest.

Meanwhile, Fianna Fail rejected Fine Gael's claim last night that the Government was contributing too much compared to other countries.

Fine Gael's Olivia Mitchell pointed to different figures that showed that Irish households would bear the second-highest burden in Europe for the Greek bailout.

European Affairs Minister Dick Roche said this was another example of Fine Gael's "willingness to be irresponsible".

"Deputy Mitchell's statement sought to create the impression that Ireland is contributing disproportionately to this loan facility being created by this Bill. Fine Gael knows that statement to be untrue and I suspect that Deputy Mitchell also knows it to be untrue," he said.

But Ms Mitchell said she was being criticised for just pointing out that we were paying disproportionately more than other eurozone countries.

"I regard it as my duty to point that out, and I resent the minister's suggestion that it is somehow unpatriotic to do so," she said.

Irish Independent

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