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European Summit deal a missed opportunity – Doherty

21 July, 2011 - by Pearse Doherty TD


Sinn Féin Finance spokesperson Pearse Doherty described this evening’s agreement at the European Council as a missed opportunity and said that it will do little to reduce the state’s growing debt burden.

Deputy Doherty said:

“The deal agreed at tonight’s European Council meeting is a missed opportunity for Ireland and for the Eurozone. Despite all the hype it fails to deal with the real problems underlying the Euro debt crisis.

“Enda Kenny is claiming that a 2% interest rate reduction on future EU loans could save the taxpayer between €600 million and €800 million. The details of the deal on offer are not yet clear. However today’s statement only refers to the EFSF loans which would only amount to a €350 million per year saving if a 2% reduction in the interest rate was applied to future and past borrowings from this month.

“While any reduction in the interest rate is welcome this does not represent a significant gain for Ireland. With our national debt set to exceed €200 billion by 2014 this interest rate reduction will do nothing to address our national debt. The only way to reduce this debt is by burden sharing with senior bondholders and loss sharing with the ECB.

“Unfortunately these issues are explicitly ruled out for Ireland in this evening’s agreement and it seems that Enda Kenny, by signing up to this agreement which rules our any type of private sector involvement in Ireland’s debt crisis, has ditched any attempts to impose losses on senior bondholders in Anglo Irish Bank as announced by the Finance Minister on his recent trip to Washington..

“The Government is set to inject €19 billion into the four covered banks in the coming days that will be spent paying off senior bondholders. In the coming two months more than €4 billion will be spent on bondholders in the banks.

“The government and our European partners need to stop burying their heads in the sand. Continued austerity coupled with unsustainable debt will lead to default. The European Council acknowledges as mush today in their 2nd bailout for Greece.

“While the Government will attempt to present as positive a spin on tonight’s deal as possible unfortunately it changes very little and does not address the core problems underlying the Eurozone debt crisis.” ENDS

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