Saturday 16 December 2017

At last we have a break -- we'd be fools to let it pass

Some signs of hope are beginning to emerge but public pay remains a thorn in this State's side, writes Marc Coleman

Last Tuesday night, Brendan Keenan and I paid tribute to Brian Lenihan on Newstalk. In the course of the discussion, we touched on the bank bailout. Both of us agreed that despite the awfulness of its cost, it is a one-off cost when compared to the ongoing crisis in our public finances.

We also agreed that if we don't solve the latter problem, bondholder haircuts will be meaningless. Last week, though, the prospect of a one-off clawback tantalised the media. Back from a trip to the US, a happy Michael Noonan told us that the IMF had agreed to the idea of getting some of the €3.8bn back from unsecured senior bondholders in Anglo Irish Bank and Irish Nationwide. But since March, the new Government has spent €8bn more than it received in taxation.

Assume the ECB agrees to a haircut -- say half of their face value -- the amount saved would still be less than the average monthly exchequer deficit run since this Government took over the reins of office early in March.

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