EX-TAOISEACH'S VIEW:FORMER TAOISEACH John Bruton has described the prospect of an EU/IMF bailout for the country as a "very, very sad day for Ireland".
He said the political leaders who had worked peacefully through the 19th century for independence and sovereignty and those who had engaged in a revolutionary struggle in the 20th century had done so on the basis that “we would make all the decisions on spending and taxation ourselves, on our own”.
“We’re now in a position where we’ll still be making the decisions but we won’t be making them on our own, we’ll have others looking over our shoulders,” said Mr Bruton.
"The credit of the Irish Government and the ECB was not sufficient to give confidence to the banking system and now we are going to have to enlist the credit of the governments and taxpayers of the other countries of the European Union and of the world through the EU and the IMF to underpin the credit of the Irish banking system." Mr Bruton told RTÉ Radio's News at Onethat this was a very serious situation. "However, if we show purpose and speed in making the decisions that need to be made about our revenue and expenditure, we can regain, quite quickly, full control of our own affairs and that must be our objective as a country."
He expressed the view that the EU and IMF officials would be involved in all of the decisions that had to be made to stabilise the country’s finances including budget decisions.
“They will want to assess that the projected revenue from a particular measure or the projected saving from a particular cut in expenditure this year is going to carry through into subsequent years.
“One of the problems with budget-making in other countries is that the figures haven’t been honest or realistic and I think they’re going to be looking over our shoulders to make sure our assumptions are correct,” he said.
Mr Bruton expressed the strong view that Ireland’s 12.5 per cent corporation tax rate should not be tampered with. He said it would be counterproductive for other states, who wished Ireland’s debt to be repaid, to take away its best source of revenue as corporation tax was the one tax that had exceeded Department of Finance projections for the first 10 months of the year, delivering €300 million more to the State’s coffers than was expected.
“In all other tax categories, we have been below par or at par. Corporation tax brings in money. The low rate would help the State repay its debt to the international community quickly,” he said.
Mr Bruton said there were other areas of taxation that could be looked at, pointing out that the average Irish family pays about half as much tax as the average German family on the same income.
He expressed the hope that the Irish State could regain control of its own affairs in two years at most, but said that it was impossible to predict as the country’s problem was part of an overall supply issue on the international sovereign bond markets.