Friday 22 November 2019

It's no good saving billions if we're still dreading every bill landing on the mat

We’re praying that Finance Minister Michael Noonan, pictured here with ECB
chief Mario Draghi (right) has pulled a rabbit out of the hat with this deal –
and that he doesn’t let go of its ears
We’re praying that Finance Minister Michael Noonan, pictured here with ECB chief Mario Draghi (right) has pulled a rabbit out of the hat with this deal – and that he doesn’t let go of its ears

So, we managed to take a hacksaw to the ball and chain of the promissory notes. But there's a distinct shortage of people doing a conga in the street to frolic at our great escape.

There's a reason for that: the public, described as poorer but wiser by Enda, has learned caution about emergency measures rushed through under melodramatic circumstances. The last time we woke up to hear about midnight machinations, it cost €64bn.

Nevertheless, those crushing IOUs are now consigned to history, while another financial instrument takes their place. We can see the replacement is considerably less penal, even allowing for lengthier terms, but it's difficult to celebrate debts bequeathed to unborn children.

No sale on those party poppers.

Even the death notice pinned to the former Anglo Irish Bank hasn't led to giddy carousing. Instead, the human dimension nags: the callous way some 800 hardworking employees were left to learn from news reports about their jobs disappearing overnight.

All considered, any whoopee on Main Street would seem inappropriate, although on Kildare Street the mood is naturally more upbeat.

The problem for ordinary people, trying to absorb the implications of debt restructuring, is that it's unclear how it will impact on daily lives.

We long for this to be good news – we want Michael Noonan to have pulled a rabbit out of the hat. But we don't want to see that rabbit disappear down a hole as soon as the Finance Minister lets go of its ears.

What's needed are concrete reasons to feel confident our children won't be obliged to emigrate, our neighbours will be able to find jobs and we'll be able to carry on paying our bills.

Certainly, this deal offers hope of economic recovery. Already, we're hearing how future budgets will spring fewer of those odious stealth taxes on us.

We're told it will ease the pressure on the national finances, but we also need to experience an easing of the pressure on individual finances.

Many of us are barely getting by. Debt relief for Ireland Inc is all very well, but her citizens need some debt relief, too.

The deal will see Ireland borrowing some €20bn less over the next decade. This will mean a lower national debt, which equates to reduced sums of money leaving the Exchequer in interest repayments.

Money saved, after a fashion. But couldn't some of those savings be used to help our citizens in practical ways apart from lowering the national debt?

Take those looming new taxes causing fear and distress in homes countrywide. There is economic logic – not to mention compassion – to scrapping some of them, for example the property tax.

Not only would such a move lift the economy, it would act as recognition that much was asked of citizens in the wake of the collapse; that sacrifices were made and hardship was endured.

Debt restructuring should mean a visible improvement in people's lives. It should mean job creation, for example. More than €2bn has been saved already from the scrapped promissory note that was due to be paid next month – spend that on getting people back to work.

Unemployment is a scourge. Behind the 14.5pc unemployment rate lie almost half a million stories of human suffering, and these people deserve to be prioritised.

Debt restructuring should mean help for ordinary people with money worries, who are struggling to cope from one week to the next. Homeowners crippled with mortgages, more than one in 10 of them in negative equity, need relief: banks must be told to back off and allow people a chance to recover.

Debt restructuring should mean at least some cash, even a little, left in the pockets of the coping class. No point telling us billions will be saved over the lifetime of the new deal if we're still dreading every bill landing on the mat.

If the Government chooses, debt restructuring could mean reversing previous decisions: returning some of the welfare benefits people have lost, rowing back on that 23pc VAT rate, or backing off from water charges.

Deal or no deal from Europe – and Mario Draghi's careful "we have noted" phrase must be the least enthusiastic corroboration in history – Ireland's population is still trudging through an austere landscape.

This is a mistake on the Coalition's part. Give us all a dividend, then we might consider joining your conga line.

Irish Independent

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