Agreement with EU, ECB and IMF leaves Ireland's poorest people paying for debts accumulated by banking gamblers

Posted on Sunday, 28 November 2010

Ireland's negotiations with the European Commission, the ECB and the IMF were concluded on Sunday, November 28, 2010.  The bottom line is that Ireland's tax-payers, poor people and vulnerable people are to take the full impact of the 'hit' for bank losses. While it is clear that Ireland's fiscal situation is grave and must be addressed effectively, it is simply not acceptable that Ireland's poor, sick and vulnerable people should have to pay for any part of losses incurred by banking gamblers be they Irish, German, French or any others.
The agreement involves:
€85bn to be available to Ireland of which €17.5bn will come from Ireland (i.e. €67.5bn from outside Ireland)
Th €85bn is broken down as follows:
1.  €35bn for banks –
-  €10bn immediately for bank recapitalisation
-  €25bn as banking contingency
2.  €50bn for Ireland's Budget deficits in the 2011-2014/5 period

€17.5bn will be made available from Ireland’s own resources. This is to be made up of:
- €5bn Ireland’s own resources/reserves
- €12.5bn from the National Pension Reserve Fund
It appears that Ireland’s own contribution is to be the first €17.5bn drawn down

The end-date for the adjustment process has now been extended to 2015.
Not clear what the implications are for the 4-Year Plan (due to end in 2014)
Interest rate is 5.8%
Average length of loans will be up to 7.5 years.
Government claiming that this agreement will stabilise the national debt

A crucial issue is that bond-holders will not have to take any part of the hit.