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There is a debate right now which pitches health concerns against 'the economy', as if there were a binary choice to be made.
An infinite amount of money would make it a simple choice.
But Ireland's choice is far from simple - and its past impinges on the present ...(1/15)
An infinite amount of money would make it a simple choice.
But Ireland's choice is far from simple - and its past impinges on the present ...(1/15)
Unlimited resources would mean the State could step in, close a huge chunk of the economy - pay workers' wages and keep businesses alive until the public health issue is contained or eliminated.
Money fixes a lot of problems - including issues of social solidarity. (2/15)
Money fixes a lot of problems - including issues of social solidarity. (2/15)
This is what happened to a large extent earlier this year.
Workers could rest easy knowing their wages were paid through the PUP and the wage subsidy.
The banks turned a blind eye for six months.
Nearly everybody was on board. (3/15)
Workers could rest easy knowing their wages were paid through the PUP and the wage subsidy.
The banks turned a blind eye for six months.
Nearly everybody was on board. (3/15)
This was financed by ample cash reserves and super low borrowing costs - a result of ECB support.
But the wriggle room for further lockdowns is shrinking.
This is partly due to Ireland's legacy debt - a huge pile of borrowings amassed as a result of the economic crash. (4/15)
But the wriggle room for further lockdowns is shrinking.
This is partly due to Ireland's legacy debt - a huge pile of borrowings amassed as a result of the economic crash. (4/15)
The national debt stands at €231 billion.
Investors look at the debt-to-GDP ratio and see that Ireland is reasonably well placed to meet its repayments.
For now. (5/15)
Investors look at the debt-to-GDP ratio and see that Ireland is reasonably well placed to meet its repayments.
For now. (5/15)
Paschal Donohoe says Ireland is a 'semi-core' country. In other words, a pretty safe bet for investors that they'll get their money back.
This is why the interest rate on new borrowings is currently very low.
Negative, in fact. (6/15)
This is why the interest rate on new borrowings is currently very low.
Negative, in fact. (6/15)
This is partly why Ireland got so little free money from the EU over the summer.
Ireland is largely dealing with the pandemic through fresh borrowings - not grants.
The fact that Ireland's corporate tax receipts are viewed with envy across Europe may have played a part. (7/15)
Ireland is largely dealing with the pandemic through fresh borrowings - not grants.
The fact that Ireland's corporate tax receipts are viewed with envy across Europe may have played a part. (7/15)
On the assumption that lockdowns are temporary, the Central Bank believes Ireland can continue to borrow money at these rates.
Even Level 5 would be tolerable - for a period of time.
But what if severe lockdowns go on for longer and are with us well into next year? (8/15)
Even Level 5 would be tolerable - for a period of time.
But what if severe lockdowns go on for longer and are with us well into next year? (8/15)
Ireland has practically shuttered its hospitality sector in the first week of October with outdoor dining and travel restrictions.
Nowhere else in the EU has done this.
Over 60,000 people may be back on the PUP this week - which has been cut. (9/15)
Nowhere else in the EU has done this.
Over 60,000 people may be back on the PUP this week - which has been cut. (9/15)
Level 5 would close all non-essential retail and put hundreds of thousands on income supports - supports largely financed through borrowed money.
Measures would also have to be taken to prevent cascading defaults which would close businesses permanently. (10/15)
Measures would also have to be taken to prevent cascading defaults which would close businesses permanently. (10/15)
And what of the New Year?
What is to say a brief reopening in December would not require another shutdown in Jan or Feb?
The need to borrow more money will grow - or some of the lasting economic damage including permanent job losses will just have to be accepted. (11/15)
What is to say a brief reopening in December would not require another shutdown in Jan or Feb?
The need to borrow more money will grow - or some of the lasting economic damage including permanent job losses will just have to be accepted. (11/15)
Ireland's hope, in a perverse way, is that this second wave has a similar impact on Europe - and that similarly dramatic measures are required across the continent.
Everybody would be in the same boat. More money, grants and cheap loans would be forthcoming. (12/15)
Everybody would be in the same boat. More money, grants and cheap loans would be forthcoming. (12/15)
Countries, like Germany with its health service, however could be left relatively unscathed.
They could look to Ireland which closed hospitality in early October and potentially retail in November.
They might ask why it did so, when Germany kept its economy open. (13/15)
They could look to Ireland which closed hospitality in early October and potentially retail in November.
They might ask why it did so, when Germany kept its economy open. (13/15)
An absence of European solidarity could pull the rug out from beneath Ireland's ability to borrow at low rates.
The legacy of the banking and economic crash leaves Ireland will limited head-room should repeated, further shutdowns be required. (14/15)
The legacy of the banking and economic crash leaves Ireland will limited head-room should repeated, further shutdowns be required. (14/15)
High cost borrowings mean potentially years of austerity which impacts on public services and public health.
This explains, in part, the reluctance to accept NPHET's recommendation at the weekend.
But Ireland may be left with no choice but to go there in the future. (15/15)
This explains, in part, the reluctance to accept NPHET's recommendation at the weekend.
But Ireland may be left with no choice but to go there in the future. (15/15)
