Dan White: What happens now, €85bn later?

Dan White

Q: The interest rate of 5.8pc doesn't appear to be as bad as it could have been, right?

A: While the average interest rate of 5.8pc is certainly lower than some of the wilder weekend forecasts, it is still very high. Merely paying the interest on the net €68bn we will receive from the EU and the IMF will set us back a hefty €4bn a year. It's far lower of course than the exorbitant rate -- over 9pc -- being quoted on the international markets.

Q: Can the bailout work and return us to prosperity?

A: If, and that's a very big if, the growth forecasts in the government's four-year plan -- which forecasts that the economy will grow by an average of 2.75pc over the next four years -- are achieved, the bailout just might do the trick.

However, if the growth forecasts aren't met, all bets are off.

Q: Who was responsible for letting the banks get into this state?

A: During the boom years, Ireland suffered the misfortune of having politicians who didn't want to know, regulators who either couldn't or wouldn't regulate and the worst bunch of cowboys this side of Dodge City running our banks.

While former Financial Regulator Paddy Neary and Anglo boss Sean FitzPatrick have been rightly blamed for their part in creating the mess, others must shoulder some of the blame, too.

These include former Finance Ministers Charlie McCreevy and Brian Cowen, former Taoiseach Bertie Ahern, former Central Bank governor John Hurley, former AIB boss Eugene Sheehy, former Bank of Ireland boss Brian Goggin and, last but not least, former Nationwide boss, Michael Fingleton.

Q: Will we get any money back when the banks become profitable again or when they are sold off?

A: We will get the first indication of what the government can hope to recover from selling banks that have been nationalised when EBS is sold, probably to the US-backed Cardinal Capital, in a few weeks time. Anyone hoping that such asset sell offs will recoup more than a fraction of the €60bn-€70bn that it will cost to plug the black hole in the banking system is likely to be disappointed. Even Bank of Ireland, by far the healthiest of Ireland's banks, is now worth a mere €1.4bn.

Q: Will bank profits be taxed in future?

A: While the banks were running amok over the past decade, they paid very little tax on their profits. Not alone did they benefit from the 12.5pc standard company tax rate, they also aggressively exploited various loopholes to further reduce their average tax rate.

That will change. Not alone will most of the loopholes on which the banks have relied to keep their tax bills down be scrapped, banks are also likely to be hit with a special levy.

Q: So the retired bank chief executives like Sean FitzPatrick, Eugene Sheehy, Brian Goggin and Michael Fingleton are still laughing, with their huge pensions?

A: Unfortunately yes. Just to add insult to injury, having bankrupted the country, most of the former bank bosses rode off into the sunset with the saddlebags stuffed with cash.

Goggin's departure was eased with a €650,000 pension, Sheehy got €529,000 annual payout while Fingleton looted a €27m pension pot from the Nationwide. Doesn't it just make you mad?

Q: Could the state bring in any special laws to specifically tax their pensions?

A: Almost certainly not. The constitution specifically bans laws that treat one group of citizen's less favourably than others. Any attempt to single out the pensions of the former bank bosses for special treatment would almost certainly result in a legal challenge.

A more promising approach would be for the state to sue the former bank bosses to recover the losses caused by their reckless and incompetent management.