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Brian Hayes: We are ruining ourselves with new-bailout talk

Obsessing about a second bailout for Ireland at this stage is a useless form of activity. In fact, talking about a second bailout at the beginning of 2012, with two years to run in the present support programme, is a form of displacement activity. It plays to our weaknesses -- our sense of pessimism and victimhood.

A much more effective strategy is to ignore the Cassandras and get on with the job of turning this economy and country around. We need to focus on the here and now; on what we can do in 2012 to make things better.

At present the troika and Ireland share a common interest. Both sides are anxious to show that a country can successfully complete and exit a support programme.

During 2011 the Government negotiated significant changes to the current programme. It is currently involved in complex negotiations over the overall burden of debt being imposed on the Irish taxpayer, particularly as regards promissory notes to the former Anglo Irish Bank. For Ireland now to say it wants another bailout would be throwing away its strongest card in the present negotiations.

It would fatally undermine our position. There would be no incentive for the troika to change the terms of the current programme.

There is also another reality. We live in uncertain times. In fact all predictions about 2012 could be derailed by geo-political events. Take for instance the escalating crisis with Iran. An outbreak of hostilities with Iran would have consequences that nobody can foresee but most of them are likely to be bad. Predictions by economists are just that, predictions.

No economist, no commentator knows what the situation will be like in the eurozone in three months, let alone what the international situation will be like at the end of 2012.

We need to focus on what we can do for ourselves. That means getting our spending and revenues into balance, the quicker the better. This will stop our debt mountain growing and interest repayments escalating.

In all the debate about deficit reduction there has been no reference to the issue of inter-generational equity. Borrowing for current spending is in effect taking resources from our children. They are the ones who will have to pay back our debt and the interest on it.

Nobody owes us a living. Ireland is a small open economy. Prosperity depends on our capacity to sell goods and services at home and abroad. Being competitive, an emphasis on quality and customer service and innovation are essential. The Government continues to concentrate on jobs and supporting growth areas of the economy. The Government is also trying to fix broken sectors of the economy such as the property sector and issues surrounding personal insolvency.

On the international stage we have gone a long way towards rebuilding Ireland's reputation. During 2011 the Government fought off a sustained attack on our corporate tax rate. We also negotiated significant changes to the bailout programme, which has saved €10bn in interest repayments.

Sorting out our national finances, carrying through a major public sector reform programme, creating the conditions which allow the economy to grow, fixing the broken parts of the economy -- are all necessary ingredients behind getting the country to a better place.

There is reason to be hopeful that a measure of stability will return to the eurozone this year. The decision by the ECB to provide unlimited funding at 1pc to all European banks was a significant game changer.

If stability returns to the eurozone and Ireland continues to fulfil the terms of the support programme then there is every prospect that Ireland will be able to raise money on the international markets in 2013.

The terms and conditions are the critical elements of any borrowing programme. To coin a phrase: sufficient for the day is the need thereof. We need to focus on what we can do for ourselves. An approach informed by realistic optimism will serve us much better than pessimism or victimhood.

Brian Hayes is Minister of State at the Department of Finance and a TD for Dublin South-West

Irish Independent