What next?
What next for the country?
These are strange and difficult times.It is difficult to predict what will happen over the coming years.The budget will hit all our pockets and unfortunately it appears that those who can afford to pay most are not really being stretched.
We believe that the country will return to growth and that this return will be faster than most people expect.The recent push by some French and German mp's to increase our corporation tax rate is clear evidence of how important this rate is going to be over the coming years.When we add this to lower wages and a more flexible working environment we see no reason why Ireland will not be a very attractive proposition for American and we expect Chinese investment.
The recent recapitalisation of our banks should help liquidity.
The recent bailout was necessary.Without it we would have run out of money.No money for wages in the public sector, for teachers or health workers and for other essential services etc.
This is not €85 million out of the blue that we did not expect. €50 billion is an alternative source of funding to the bond markets to cover our anticipated deficit over the coming years.
Our biggest concern is that we can negotiate a reasonable interest rate.
Some commentators say we should play hardball.You can really only play this game when your hand is not known to the other side.
Others say that we should not have used our pension reserve of €17.5 billion.It is difficult to ask for funds if you are not willing to put money in yourself
Others argue that we should not use the proceeds of sale of our state Companies towards the rescue.Why not? We need to clear our debt and at least paying down debt will mean these funds will not be wasted!
We are all angry and outraged.But the signs were there for years.Mad house prices,inflated wages,huge levels of personal debt.
We totally agree that It is a complete disgrace that our banks have cost us billions through crazy, reckless lending The final bank bailout may cost us in the region of €50 billion.Hopefully we can recover some of this through the sale of revamped organisations.
But the banks are only part of the problem and of the current €85 billion facility €35 billion relates to the banks.Of this €35 billion €10 billion is in the cash with the balance being a contingency fund to cover potential future losses.
On the other side of the bailout is our deficit.Our deficit is our own making,spending €20 billion per annum more than we can afford.And we have known this for years and we just have not done enough to try and sort it out.
The "bailout" conditions imposed by the IMF and EU will force us to meet our spending cuts .This is going to be very difficult .If we do not deliver on the expenditure reduction side the money will not be there when we go looking for it. This is serious country.
The country will have a new Government early in the new year.Their hands will be tied, but they will have a great responsibility in terms of building confidence in the economy through strong leadership and progressive policies.
The one area where we are masters of our own destiny is on the income side.Every one of us has a responsibility here.We cannot leave it somebody else to solve our problems.For our business, it will mean working longer and harder for smaller wages.We will look at opportunities where we can meet the needs of our customers and try and satisfy these needs
The rescue package is not without some room for optimism
Part of the package will make changes in our society that we have been unable hitherto to make ourselves. Unblocking cosy cartels and restricted access to professions are part of the requirements of the bailout.This will help us .
Why does it cost €55 to see a doctor for 5 minutes? Why are they not allowed to advertise? This will change.
We also have our Corporation tax rate embedded in the plan.
Hopefully all the money spent over the boom will not be considered a waste.
We need to look at what we have achieved.Many of our public services although too expensive provide top quality services.Our schools and in particular our primary schools provide an excellent grounding for our children.Our roads and many of our towns are completely unrecognoisable to where they were ten years ago.We have and continue to attract the top multinationals in the world.