A Government without any answersApr 25th, 2011 | By Ian Poulton | Category: Ireland
Fine Gael were holding a church gate collection at Mountrath church yesterday. (The mere concept of a political party holding a church gate collection, seems absurd, since when were they a charitable cause?) By the time I arrived for the 11.30 service, they were packing up to leave, removing the opportunity to ask whether the collection would be given to taxpayers’ who must bear the cost of the banking bailout.
Not that those at the church gate would have been likely to have given a coherent answer. Questioning Fine Gael canvassers in Carlow-Kilkenny during the general election campaign as to whether they supported taking money from working people to pay the debts of rich people, I was told they certainly did not. Asking why, then, they were supporting a party that proposed doing precisely that, I met with blank looks.
The Government really believe that their policies are going to work; thought it is noticeable over the weekend that Fine Gael members of the Government seem to be keeping a low profile, leaving the fielding of questions to ministers from the Labour Party, the junior partner in the coalition. The minister for education today warned of painful decisions ahead: but to what end?
When every public service has been slashed, when billions have been taken from working people, will anyone be impressed? The financial markets do not believe what the Government is saying; they do not believe that the programme required by the ECB and IMF is actually going to work. The National Treasury Managemaent Agency publishes daily reports; the one for Thursday past, before the markets closed for the long weekend, showed yields on Irish government bonds rising to over 10%. The new government has not reassured the markets; things have grown progressively worse. Statements by ministers that things have steadied are as silly as a television weather forecaster standing in a downpour and telling viewers that the sun is shining.
Saturday’s ‘Financial Times’ carries a table showing the ‘spread’ of the bonds of various countries as against those of Germany; Ireland has a spread of 7.4%. What that means in plain language is that while Germany could borrow on the international markets at 3.27%; Ireland would have to pay 7.4% more – 10.67%. The terms of the ECB loan that is intended to save the country from bankruptcy are generous compared to what would have to be paid on the open market. We are in a bad way and it is being made steadily worse by the Coalition Government.
An emailed link this afternoon to David McWilliams in his ‘Sunday Business Post’ column only confirmed the figures from the NTMA on Thursday and the FT on Saturday. ‘We’re being played for fools’, he says, pointing out that the financial markets rate us as a worse risk than Uruguay, Peru, Columbia, Tunisia, Kazakhstan or Guatemala. His solution is that we simply declare that we are going to pay only a percentage of the debts incurred by the reckless bankers; the so called ‘burning’ of the bondholders; otherwise we really are fools.
Next time Fine Gael collectors come to the church gate, they had better come with answers as well as buckets; otherwise there will be some reading aloud of the economic truths.