Irish bank debt burden remains unpayable

Tuesday 19th February 2013

Irish Congress of Trade Unions chief economist Paul Sweeney has told a global economic summit in Washington DC that Europe must make good on its June 2012 promise to separate Ireland’s private and bank debt.

Speaking last week at the summit, which involved the IMF, the World Bank and the International Trade Union Confederation (ITUC), Mr Sweeney said: “It is vital that Irish sovereign and public debts are separated and Europe assists Ireland on its socialised (bank) debt. We are being punished for having been the first in dealing with our failed banks and for the foolishness of the (then) Government, which guaranteed all the creditors. Without a significant deal on our massive bank debt burden, there is little chance of economic recovery in the near future.”

Paul Sweeney’s address took place a few days after tens of thousands took part in Congress-organised rallies to protest at the bank debt burden. IMPACT members joined the protest in large numbers with branch banners highly visible in Dublin, Cork, Galway, Limerick, Sligo and Waterford.

Mr Sweeney highlighted recent Eurostat figures, which show Ireland has paid more for the European bank crisis than any other EU state. “So far, the bank bailout has cost us €41 billion, while Germany – with an economy almost 20 times our size – has paid €40 billion. We have also paid more than the UK, France, Portugal and Spain.There is little or no recovery after five years of austerity in Ireland, especially when judged by the key factor of unemployment,” he said.

Describing the recent promissory note deal as a step forward, Mr Sweeney told his audience – which included senior IMF officials dealing with Ireland – it was a deal “that should never have had to been done.” He said those who had lent to Anglo Irish and Irish Nationwide should share the burden.

Mr Sweeney also called for an EU-wide stimulus programme to start recovery – something the IMF also appears to favour.