An Irish bank debt deal
Sir, – There is little doubt that we are indebted to our Minister for Finance and his colleagues for the outcome on the promissory note.
He again showed, however, that he needs to be careful with his dry wit and similes. When illustrating how inflation will take care of reducing the payments due at the end of the new long-term bonds, he used the example of the huge inflation in the value of the first house he purchased some 50 years ago. That was not the most apt comment in a situation where a lot of his listeners have had the opposite experience and that took only a few years. – Yours, etc,
Sir, – Whatever about its content, the headline on your leading article (“Frankfurt’s way”, February 8th) was a cheap shot; more Sunday Independent than Irish Times. In the editorial itself, you complain about “the lengthly circuitous process by which the deal was negotiated”. Did you really expect anything else?
You further complain about “ill-advised political declarations and warnings of catastrophe”. The loudest of such declarations have undoubtedly come from the media, your paper being no exception.
If a good deal has been done in difficult circumstances, as I believe it has, why not give it a wholehearted “well done” instead of the mealy-mouthed acknowledgment you published on Friday. And just look at your Letters page! Was their any letter that thought the deal was okay? – Yours, etc,
Sir, – Thursday’s victory was Ireland’s financial Stalingrad, the Government held the line and then began turning the tide in Ireland’s war for economic freedom. Unfortunately, instead of congratulating the Government, the whingers are expecting an immediate overrun of Frankfurt and Berlin. – Yours, etc,
Sir, – Our Taoiseach, Minister for Finance and other Government sources have all chosen to use a mortgage analogy to explain the intricacies of the deal concluded on the promissory notes.
Michael Noonan used his personal circumstances to explain that the mortgage he took out in 1968 equated to his monthly salary some 25 years later. Mr Noonan neglected to mention that at the conclusion of his mortgage he received the title deeds to his home, a valuable asset which he could convert to cash or use.
My now six-year-old son will assume the burden of this repayment, yet will not be able to marvel at the architecture and infrastructure which €30 billion could have financed. He will complete his formative education in damp, cramped prefabricated structures, much as I did 40 years ago.
Ironically, the deal was completed with the tacit assent of the ECB, whose primary role is to contain inflationary pressures. It is unlikely we will witness such inflationary pressures as those which magicked away Mr Noonan’s mortgage.