Ireland exits bailout – but has paid high price

Brendan Howlin and Michael Noonan at the news conference to signal Ireland's exit from the bailout. Picture: PA
Brendan Howlin and Michael Noonan at the news conference to signal Ireland's exit from the bailout. Picture: PA
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Three years after being forced to apply for emergency loans, Ireland will tomorrow become the first eurozone country to exit the bailout programme.

But its finance minister has warned of continuing pain ahead, even after Ireland officially exits the €85 billion (£71.5bn) loan facility orchestrated in 2010 by the International Monetary Fund, European Commission and European Central Bank.

At a news conference in Dublin, Michael Noonan insisted “this isn’t the end of the road” but pledged there would never be a repeat of the financial collapse because of measures taken to prevent such a crisis.

“The real heroes and heroines of the story are the Irish people,” he said. “They have had their taxes increased, they have had their services cut drastically – some of them, including public servants, have had very serious pay cuts. Everybody has had cuts in their pensions as well. But they have continued to support the government.”

Mr Noonan said those who had suffered most were the hundreds of thousands who lost their jobs and homes.

More than 200,000 people were forced to emigrate in the wake of the collapse of the Celtic Tiger economy – brought about by the bursting of Ireland’s property bubble that crippled the banking sector.

Public expenditure minister Brendan Howlin said the bailout exit would give Ireland “much greater control over our own destiny into the future” but he cautioned there would be no spending spree.

Both he and Mr Noonan said the country would not “go mad” on Monday, insisting the government would have to remain committed to making prudent economic and social decisions.

Ireland’s economy is forecast to grow by about 2 per cent next year. Unemployment has fallen below 13 per cent, from a 15.1 per cent peak in 2012.

But Sinn Fein finance spokesman Pearse Doherty predicted there would be further austerity cuts long after the bailout programme was over.

“They bailed out the banks and, unfortunately, over the three years, it was the Irish people that suffered,” he said.

European Commission president Jose Manuel Barroso congratulated the Irish government and people on the bailout exit. “Thanks to their efforts and sacrifices, Ireland will now be able to finance itself through its own efforts,” he said.

But European Union vice-president Oli Rehn said Ireland had made a mistake when it gave a blanket guarantee to the country’s debt-ridden banks.

He told Irish television he had been shocked by the level of banking debt in Ireland and that it had been wrong to give the banks so much money.

The impact of the bailout and cuts programmes are still being felt across Ireland, and Michael Taft, research officer of the Unite union in Dublin, criticised the Fine Gael/Labour government’s contention that the bailout had been a success.

“Nearly 300,000 jobs have been destroyed – more than one in every 12 jobs. Our job destruction rate is five times the rate in the eurozone. We lead the EU in precarious work. We have one of the highest levels of low-pay,” he said.

“State debt has increased by nearly five-fold in only six years. Households have debts nearly twice their income while half of SME [small and medium enterprises] debts are underwater. Nearly 25 per cent of all mortgages are in arrears or have been restructured. Welcome to Debtor Island.”

Ireland is campaigning for further debt relief for its investment in the banks through the European Stability Mechanism, and communications minister Pat Rabitte said it had a “very strong moral authority” to do so.

“I believe that Ireland did take a hit for the team,” he said. “I believe that there wasn’t burden sharing when it came to it.”