Who is listening to Enda Kenny?

May 30th, 2011 | By | Category: Ireland

Leo Varadkar yesterday warned that Ireland would need a second bailout. ‘Not at all’, says Enda Kenny, ‘everything is going well’.  There will be no need for a second bailout; Ireland will even be able to borrow money on the international markets late in 2012 according to Michael Noonan.  Presumably, they believe people will believe them, unfortunately the international money markets do not.

Since the Fine Gael- Labour Coalition gained power, rather than improving things have actually become progressively worse.  Perhaps there was an expectation that the new government would dump the policies of its predecessor, but instead of improving, the status of Ireland in the financial markets has deteriorated;  the bond spread, the amount by which we must pay more than the Germans to borrow money has worsened by the week.

At Easter, if one checked the ‘Financial Times’, the table of the ‘spread’ of the bonds of various countries against those of Germany showed Ireland had a spread of 7.4%.  What that meant in plain language is that while Germany could borrow on the international markets at 3.27%; Ireland would have had to pay 7.4% more – 10.67%.

The plain language is even more bleak as another month draws to a close.  Check today’s table of bond spreads and it shows that the Germans can borrow at 2.98%, while in Ireland the figure has increased to 11.36%.  If we were seeking to borrow new money we would have to pay 8.38% more than Germany.  Whatever the Taoiseach may say about Ireland being on course, the financiers do not believe it is on course to recovery.

The Taoiseach does not need to resort to exotic publications like the ‘Financial Times’ to discover that his policies are lacking credibility, if he referred to his own National Treasury Management Agency, the body in which he today declared he trusted, he would see a similar bleak picture.  The NTMA publish daily reports on government bonds, reports available to anyone who clicks on the website links.  Today’s report shows that the yields on Irish Government bonds range between 9.93% and 11.72%.  Having to go into the international money markets and offer over 10% on government bonds at a time when the economy is stagnant would place an even more unsustainable burden upon the country.

Any Leaving Cert economics student could do the sums; the more we have to pay for the bankers’ debts, the more that is taken in taxes and cuts, the less money is in the system, the less demand there is for goods and services, the more the economy stagnates.

Standing with a farmer in a field in Co Laois yesterday afternoon, he pointed out that Leo Varadkar was only saying what made sense.  “Why didn’t the Government listen to that McWilliams man who spoke at the harvest festival?’ he asked.

‘I don’t know’, I said, ‘I don’t know’.

The one thing I do know is that the bond spread shows that the markets are not listening to the Taoiseach.



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  1. I noticed a change of faces among Ministers recently but I haven’t seen any sign of a change of Government, certainly not in terms of policies. I cannot understand why governments throughout Europe don’t see where “slash and burn” is leading. I think Greece is on the verge of very serious social unrest because the ECB/IMF/EU Structural Adjustment Programme (let’s call it what it is) is going to impose even more pain on people than it has so far. If Varadkar is right, and he probably is, then we risk going the same way.

  2. Gilmore had the opportunity to change the course of Irish political history by refusing to go into Coalition and forcing the Civil War parties to stand together. Instead he chose a path that is making working people pay the gambling debts of the rich and which is likely to lead to electoral oblivion for his party.

  3. Once it looked possible that FG might win an overall majority Gilmore started almost begging to go into coalition with them. Even in coalition he showed a complete lack of imagination in Ministerial appointments – all of them are “blasts from the past” and Howlin was the Minister for Health at the start of the notorious Brigid McCole case. He dumped it on Michael Noonan when FG replaced FF as Labour’s partners in 1995. Labour always avoids doing the right thing for those it claims to represent.

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