We must spend our way out of energy war with Russia

ANYONE foolish enough to believe that our so-called ‘military neutrality’ would shield us from the damaging impacts of Putin’s murderous conflict in Europe should think again. Ireland, like all other EU states and the UK, is now at war (thankfully still without recourse to bombs and bullets) with a vicious foe who devours freedoms and democratic principles for breakfast.

As such, we need to put ourselves on a war footing to ensure we remain a cohesive, united community after this dreadful catastrophe ends.

The global War on Covid is an example of what governments can do when their backs are to the wall. They all examined exchequer balances and then spent their way out of that crisis even when rational behaviour suggested otherwise.

Here in Ireland the Government spent more than €17bn in the first year of the Covid crisis, most of that – more than €11bn – going in welfare supports such as unemployment payments. It’s not clear yet what the total Covid bill will be but Minister Michael McGrath’s suggestion of about €28bn by the end of last year provides a decent approximation. And that’s in a country with an already eye-watering national debt, now at well over €200bn.

Putin’s existential threat to our way of living is worse than Covid, which was something we knew would take a few years to wash its way through the system. Tyranny, on the other hand, can last for generations at the very least – and as we see in the case of China, forever.

The energy crisis, mainly the result of Russia’s invasion of Ukraine and Putin’s weaponisation of his gas and oil supplies, requires a ‘battle stations’ response.

And, unfortunately, that means spending more money that we don’t have, because the alternatives are so dangerous.

People Before Profit TD Richard Boyd Barrett gave only a hint of the risks we face if people, already struggling to meet their bills because of their low-or-no-income status, simply refuse to pay. We’re back to the water tax protests of 2014-2015 and the eventual humiliation of the government forced to scrap those charges in 2016.

Boyd Barrett said people would be entirely justified to refuse to pay ever-increasing energy bills, while acknowledging that such refusal wouldn’t work for people already on the pay-as-you-go system of payment. This warning of what would likely be mass social upheaval much worse than the water charges campaign came as energy companies announced even more eye-watering price increases.

On September 2, Bord Gáis jacked up electricity prices by an amazing 48.6% and gas by 45.7%; less

than a week later Energia followed with the unit price of electricity rising by 33.5% and gas by 47.11%, a pattern of rampant inflation that included other suppliers such as SSE Airtricity and Electric Ireland.

There is no escaping this terrible mauling by the blood-thirsty Russian Bear.

This means that the average home energy bill is now about €4,000 – that’s €80 each and every week, equal to pre-tax income in most homes of about €8,000.

Compared to the potential meltdown we now face, and the scale of the money already spent on Covid, reports suggesting an expenditure of more than €2bn on cost-of-living measures are simply derisory.

Which is why Sinn Féin’s Pearse Doherty said such spending ‘simply won’t cut it’, insisting that €4bn was the appropriate figure.

Labour leader Ivana Bacik said the same thing on Thursday, making the Government’s resistance to much-higher expenditure unsustainable.

NEW British prime minister Liz Truss plans to spend more than £150bn to tackle rising prices. Given that the UK has a population of 67 million people as against 5.1 million in Ireland, this suggests we should be thinking in the region of almost €13.2bn to fight inflation. Germany’s plans for a €65bn spend implies we should use about €4bn to ease the burden. It’s likely that Paschal Donohoe and

Michael McGrath will be pushed to at least that level of expenditure come Budget Day.

The effects of Putin’s war (if not the war itself) will ease in the medium term as Europe switches to alternative energy sources. Before the war, Europe imported about 40% of its gas and 30% of its oil from Russia in what is now accepted as one of the greatest strategic failures and geopolitical missteps in recent history (take a bow Angela Merkel!).

Now, however, according to EU Commission president Ursula von der Leyen, the EU has reduced dependency on Russian gas to just 11% and plans a huge increase in the import of liquified natural gas (LNG).

Meanwhile, our Government in a demonstration of pure folly – and under threat from Green Party leader Eamon Ryan – is still attempting to dodge the logic of a proposed LNG terminal in the Shannon estuary.

How utterly mad is that?