EU Observer: “Irish bailout endangers EU future”

From Daniel C. Thomas (“associate professor of European Governance and director of the Dublin European Institute at University College Dublin“) at EUobserver.comIrish bail-out terms endanger EU’s future:

Much of the Irish public’s anger is directed at Europe’s subsequent refusal of the Irish government’s desire to distinguish between its obligation to repay sovereign debt, which nobody contests, and its predecessor’s decision to guarantee the vast debts of Ireland’s private banks, which are owed mostly to private banks and other bondholders in Germany, France, Belgium, the Netherlands and the UK…

the European Commission and French-German governments’ hard-line position on private debt restructuring – whether in the form of ‘haircuts’ for bondholders or debt-for-bank-equity swaps – is seen in Ireland as an unprincipled attempt to make the Irish taxpayer pay for the bad investment decisions of private banks in other countries.

… the German and especially French effort to link reconsideration of the bail-out terms to a change in Ireland’s corporate tax rate is seen as both hypocritical and unacceptable. Hypocritical because France’s effective corporate tax rate – i.e., the percentage actually paid after all loopholes and exemptions are considered – is considerably lower than that of Ireland. And unacceptable because it challenges one of the Irish state’s few mechanisms for recovery from an economic crisis that is only partly of its own making…

If France, Germany and the European Commission maintain their hard-line positions, they may well convert Ireland from a euro-friendly to a deeply eurosceptic country. If this happens, it is likely that any future EU treaty reform would be rejected by Irish voters, regardless of the new treaty’s merits and regardless of how many referenda are held. Given the myriad challenges facing the EU, and the evident shortcomings of its current treaties, this would indeed be a bad outcome for all concerned.

Read more.

This entry was posted in Accountability, Bankers' Bailout, Budget, Civil Rights & Liberties, Debt Default/Restructuring, ECB/IMF, Economy, Elections, EU, Geopolitics, ireland and tagged , , . Bookmark the permalink.

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