Friday 19 January 2018

Stephen Donnelly: Small eurozone states must work together to scare away 'bogeymen'

And let's start with the €1.25bn due to bondholders of the defunct Anglo, says Stephen Donnelly

Stephen Donnelly

On Tuesday evening I met the troika. The Bogeymen. The faces of the three organisations that with one hand are providing us with money nobody else will lend us, whilst with the other hand insisting we pay tens of billions of euros to strangers to whom we owe nothing.

As darkness fell, the seven TDs comprising the technical group's delegation took our seats down one side of a long table in the Department of Finance. Shortly thereafter, the holders of the ultimate carrot and stick arrived. Over handshakes and introductions, Klaus from the ECB, Craig from the IMF and Istvan from the European Commission, along with their staff, occupied the seats on the opposite side of the table. The troika delegation were thoughtful, polite and professional. They were also more frank and direct than expected. A line of technocrats and bureaucrats facing a line of politicians is an obvious recipe for disaster. However, over the course of 90 minutes we probed a range of issues, from sovereignty to state assets to stimulus. And the bondholders, of course. It was, to say the least, informative.

The troika do not view us as we view ourselves. Where we see painful cuts to services, they see a society with far superior hospitals and schools than many European countries. Where we see seemingly endless new charges, they see a country with a very high standard of living and relatively low taxes. Where we see a gross immorality in paying bondholders, they see a people looking for debt write-downs, while paying a portion of their public servants some of the highest public sector wages in Europe. All of this is not to say that the troika officials don't care, or don't understand at least some of the social damage being caused here. But there may be an impression that we are looking for debt write-downs before certain hard decisions, ones which are particularly difficult politically, have yet to be made.

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