Categorized | Economics

The Most Vital Day in Banking Since 1783

Today will be the most vital day, in the history of Irish banking, since 1783. The decisions that our democratically elected Govt is committing country to, in terms of capitalisation and restructuring, are critical to every single citizen regardless of political persuasion.

All our public representatives should remember that their remarks are being watched internationally, and that signals of criticism ,that create uncertainty, will cost us in borrowing terms.

To put into context, Greece yesterday had to offer more than five times the yield premium of comparable Spanish bonds in order to attract investors to its €5b bond sale, its first since its bailout plan was agreed (specifically 334 basis points over German bunds).

If Ireland had to pay the same rates as Greece, it would cost us an extra €3.6b in interest over the next ten years, that is the equivalent of the salaries of over 80,000 newly qualified teachers.

I sincerely hope that people understand that we all have to put on the Ireland Jersey on this one, in order to show the international community that we intend to take whatever decisions are necessary to return the Irish economy to growth, and in so doing give renewed hope to all those who have lost their Jobs in the past 2 years. Higher borrowing costs will only result in more cuts and/or higher taxes, and higher taxes will be a disincentive to jobs and investment.

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