Sir, – Taoiseach Micheál Martin came back from July’s European Council meeting not with presents but a huge potential debt liability for the Irish taxpayer.
The European Commission proposal of May 2020 concerning the EU’s Recovery Fund laid out that Ireland would have a potential gross debt liability of €18.7 billion, would receive €3 billion in return leading to a net liability of €15.7 billion, which is a cool €3,200 debt liability for every man woman and child in the country. Indeed, Ireland would have the second highest debt liability per capita of any country in the EU bar Luxembourg.
While many of the big “contributor” countries in Europe asked and received a rebate in order to sweeten the bitter chalice of signing up, Micheál Martin neither sought nor received any rebate for the State. As an ever compliant European Unionist, he handed over the family bacon in Brussels.
This pretty straight-forward European Commission proposal was overtaken by the final European Council agreement of July 21st.
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In response to a Dáil question put by Michael Fitzmaurice TD, Minister for Finance Paschal Donohoe (July 28th) told us: “We will need to see the European Commission’s official allocation for member states, but at this point Ireland’s estimated grant allocation amounts to €1.278 billion [with potential additional €300 million] . . . In terms of loans under the NGEU (Next Generation EU fund), we estimate that Ireland could potentially avail of approximately €1.4 billion.”
So the final deal’s potential payback for our €18.7 billion liability is even less than the initial €3 billion proposed by the European Commission. This is simply woeful for Ireland and an abject Fianna Failure by Micheál Martin.
In her article “What did Ireland gain from the talks?” (July 22nd), your correspondent Naomi O’Leary informs us the €750 billion EU recovery fund consisting of grants (€390 billion) and loans (€360 billion) to financially stricken EU states and that money would be borrowed on financial markets by the European Commission, some of it paid off by new taxes (digital and plastic, etc) or custom levies which have yet to be agreed. For the Irish public, her following sentence should have sounded the alarm: “Member states are the ultimate guarantors of the loans, and so would ultimately be on the hook for repayments if all else fails. What percentage would fall to Ireland in that scenario depends on many unknown factors.”
We don’t know how much the European Commission can raise by taxes as yet unagreed or what future interests rates will be exactly.
Some debutants feigning innocence might say we can’t predict if the European Commission will borrow the full €750 billion, though that is exactly what we agreed to allow happen.
However, we do know how much the Irish State and taxpayer will be ultimately liable for as a portion of the €750 billion if taxes are not raised or loans are not repaid from the payback period of 2028 to 2058 and that is a gross €18.7 billion; a very gross figure indeed.
Over recent decades, the EU has morphed in front of our eyes from a political union to a debt union, with increasing debt and annual contributions from Ireland.
We must ask, at such a price to our national political independence, is it worth it?
Yeats once asked,
“Was it for this the wild geese spread
The grey wing upon every tide?”
I don’t believe it is. – Yours, etc,
HERMANN KELLY,
President,
Irish Freedom Party,
Dublin 4,