Ireland’s
international bailout has relieved investors but outraged many across the
country who find that a requirement to raid state pension funds to protect
foreign creditors unjustly burdens average taxpayers for the mistakes of rich
elite.
Shares
in Ireland’s banks rose sharply as markets were encouraged by the bailout’s
immediate focus on injecting $13 billion into the cash-strapped banks out of a
total of $89 billion in loans.
But
the Irish were shocked by a key condition for the rescue — that Ireland use $23
billion of its own cash and pensions reserves to shore up its public finances,
burdened by bailing out banks’ irresponsible risk-taking.
Opposition
leaders and some economists warned that the EU-IMF credit line’s average
interest rate of 5.8 per cent would be too high to repay — and questioned why
the senior foreign bondholders of Ireland’s struggling banks still weren’t
being asked to help bear the cost.
This
is not a rescue plan. It is the longest ransom note in history: Do what we tell
you and you may, in time, get your country back,” said Fintan O’Toole, a
commentator and author who led a protest by labour-union activists in central
Dublin against the imminent bailout. He called the average interest rate being
demanded “viciously extortionate.”
The
mood on Dublin’s snow-covered streets was just as icy.
“We’ve
been screwed by the IMF. It’s going to be years and years until we’re free of
this,” said Paul Flood, an unemployed 53-year-old Dubliner sheltering from
the cold in a pub doorway. “We have to use our own pension reserve, and
we’re still being stung with a 5.8 per cent interest rate. It sounds
ridiculously high.”
But
the senior International Monetary Fund negotiator, Ajai Chopra, insisted that
Ireland’s interest bill was reasonably cheap and its redeployment of Irish
pension funds the most cost-efficient course to take.
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