Fine Gael Dublin Central Deputy, Paschal Donohoe, this morning (Thursday) welcomed the deal struck by EU leaders last night after lengthy negotiations, saying this is the first time all of the interlocking parts of the crisis have been comprehensively dealt with.
“The agreement struck last night in Brussels will, for the first time, deal with all aspects of the crisis; reducing Greece’s debt through voluntary private sector agreement, putting a firewall in place to prevent the risk of contagion and recapitalising Europe’s banks. This will greatly improve the situation in Europe; a fact reflected in the market’s response this morning to the deal.
“Some commentary is suggesting that Greece is being let off the hook and that Ireland should insist on a similar programme. Irish people must remember, however, that we cannot and will not be pursuing a similar path as we are in a completely and utterly different situation.
“For a start, Greece’s debt levels are completely unsustainable. Even after this reduction of 50%, Greece’s debt to GDP ratio is still higher than Ireland’s. What’s more, the Greek economy is shrinking and it remains still in the throes of a critically deep recession. Ireland’s GDP, on the other hand, has grown in the first two quarters of this year, owing to improvements in the competitiveness of Irish producers and toIreland’s attractiveness as a destination for foreign direct investment.
“The Greek people are suffering greatly and paying dearly for this deal. They have seen their tax-free threshold for income tax lowered from €12,000 to €5,000, the VAT rate for restaurants and bars rise from 13% to 23%, monthly pensions above €1000 cut by 20% and 30,000 civil servants being suspended on partial pay.
“While there is a long road ahead, Ireland has made significant progress in getting our finances back on track. We are on the way to regaining our economic sovereignty. Greece will not go back to the bond markets for years and I have little doubt that their relationship with the IMF will continue for a very long time.
“I commend the Taoiseach and all EU leaders for their efforts in agreeing such a comprehensive programme which I hope will lead to a more stable future for all of us.”