Hope on debt?

While the problems in Greece raise all sorts of scary possibilities for the Eurozone and for the EU, they also raise some hope for Ireland.

If Greece runs out of money it will be a terrible day for Greece.  Lights can go out.  Pharamaceuticals are already slowing down in Greece as Greek suppliers haven’t been paid for extended periods. It would be a bad day if supplies of other more immediately vital commodities stopped.

However, if Greece successfully negotiates a haircut then there may be hope for Ireland.

Much of Ireland’s debt is unarguably sovereign.  However, the money represented by these sovereign debts was not squandered in quite as blatant a way as in Greece.

Also, another chunk of Ireland’s debt is the banking debt.  This debt has been unreasonably imposed on the “normal” Irish resident. That imposition was first done by our own government, but the imposition is being sustained by EU support.  If Greece debt can be forgiven it’ll be hard to sustain a moral argument that the Irish banking debt should continue to be imposed on the people as it is at present.

So…there MIGHT be relief from the debts. This would count as a very helpful and more just resolution of Ireland’s external situation.

This should not excuse the Irish government – or the EU – from ensuring that the internal resolution be equally just.  At present too many people are protected from the vagaries of real life.  That insurance is paid for by people who are NOT protected from the vagaries of real life.  This, at heart, is the public sector/private sector debate.  Even if the external debt is reduced, the public sector in Ireland cannot continue to enjoy the super normal benefits that it currently does.

The boom and bust was not the “fault” of the normal public sector worker.  However, the “fault” is beside the point. The money has to be gotten from someone to give to others.  The people it’s being taken from weren’t at “fault” either.


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