Congress Chief Economist Paul Sweeney has told a high level global economic summit involving the IMF, World Bank and international trade union federations that Europe must make good on its June 2012 promise to separate Ireland's private and bank debt, if the country is to have hope of recovery.
Speaking in Washington DC at the high-level summit involving the IMF, the World Bank and the International Trade Union Confederation (ITUC) Mr Sweeney said: "It is vital that Irish sovereign and public debts are separated and Europe assists Ireland on its socialised (bank) debt. We are being punished for having been the first in dealing with our failed banks and for the foolishness of the (then) Government which guaranteed all the creditors, as well as the depositors.
"Without a significant deal on our massive bank debt burden, there is little chance of economic recovery in the near future," he said.
Mr Sweeney cited recent Eurostat figures that showed Ireland has paid more for the bank crisis than any other EU state. 'so far, the bank bailout has cost us €41 billion, while Germany – with an economy almost 20 times our size – has paid €40 billion. We have also paid more than the UK, France, Portugal and Spain.
'there is little or no recovery after five years of austerity in Ireland, especially when judged by the key factor of unemployment."
Describing the recent promissory note deal as a step forward, Mr Sweeney told his audience – which included senior IMF officials dealing with Ireland – that it was a deal 'that should never have had to been done and should not have totally protected the private creditors of the two dead banks (Anglo Irish and Irish Nationwide).
'there should have been burden-sharing by those who were stupid enough to lend to these banks."
Mr Sweeney said 1.8 million at work in Ireland were still expected to repay over €35bn, albeit over a longer timeframe.
"For this we will get absolutely nothing in return – not one school building, not one teacher or hospital bed. Such a deal may satisfy the European Central Bank and the EU, but it undermines democracy."
Mr Sweeney told delegates that an EU-wide stimulus programme would be necessary to start recovery – something the IMF also appeared to favour. "A stimulus in Europe would work every effectively in reducing its vast unemployment rate of 26.06 million. However, the lack of interest shown by European officialdom in such a programme threatens the very institutions of the EU, if not the European project itself.