What of our finances after COVID pandemic?
SIR,
Every country needs hope in the midst of this crisis. Citizens have lost family members. Many have lost their jobs. People, especially the elderly and vulnerable, dread the possibility of still getting the Coronavirus, even though we have made great strides in containing the outbreak.
The future is uncertain for many. Fear is a debilitating thing.
We have made great sacrifices, we are told by our political leaders. We came out of our longest recession by also making sacrifices. How much more can we give?
Our Taoiseach, Leo Varadkar; and our Finance Minister, Pascal Donohue, have been telling our shaken population lately that there is no such thing as ‘free money’.
Really, I think there is enough intelligence out there to already have accepted this fact. However we are also clever enough to know that there are various ways in which to manage the country’s finances.
The NTMA have been issuing state bonds and accumulating billions of Euro to assist in this ongoing crisis. These will have to be serviced with interest and, down the road, will have to be redeemed. They will help to make up the current and projected shortfall in our exchequer figures. The ECB are supposedly coming to our aid with access to further billions at little or no interest.
So the big issue is not the supply of finance, but the servicing of this new debt coupled with our €200billion current debt. It is a tricky problem. The more tax money you use to service debt, the less you have to run the country efficiently.
Should we still pay the private bank debt, a significant amount in our overall debt? The banks are making hefty profits again, untaxed l might add; handy if you can get this kind of concession from the Finance Minister.
Maybe they could take up their own debt. It would seem only fair.
This would leave two or three billion in tax to help pay the new shortfall.
We could also renegotiate the terms of our massive debt. Circumstances have changed drastically. We would have a good case for doing so.
Now our elite in Dáil Éireann could also cut services, wages, pensions, capital projects, etcetera, and use other such austerity measures. That’s another option; deja vu, l suggest.
We know there is no such thing as ‘free money’. We also know which sections of society will suffer most if further austerity is the choice of the new government.
There was a feeling of togetherness, solidarity and compassion when this pandemic struck.
Is the unfeeling and ugly side of fiscal rectitude about to rear its head again in the ‘Republic’ of Ireland? Interesting times ahead on the political front. Watch and judge,
Sincerely,
Gerry Cournane,
Tralee.