The IMF could be good for Ireland


There has been an arctic freeze over Ireland for the past week. But despite all the snow, nothing chilled the blood here last week as much as the details of the 85 billion euro bailout that the International Monetary Fund (IMF) and the EU is giving to the Irish government.

The document containing the full details was published last Wednesday, and reading the conditions that are attached to all that money was a humbling experience.

The government had been telling us that accepting the money from the IMF would not take financial control away from the country and would not diminish our economic sovereignty. Such talk was scare-mongering, they said.

Well, all I can say to that is have a look at the document yourself and see what you think. Don't just read the summaries and analysis in the papers.

For the full flavor of just how demeaning this document is for Ireland you have to read the details for yourself. It's not that easy to find on the Internet, but it's worth the effort if you want to see at first hand who is really in control of Ireland these days.

To find the document go on to the RTE website ( and put details of IMF agreement for Ireland into the search box. Click on the first item in the menu that comes up: quarterly reviews part of EU/IMF Rescue Deal. A couple of paragraphs into that text you will see a highlighted line which says click here to read the full document.

And when you click on that, up it comes, the full document in all its humiliating detail. This is the driving force behind this week's draconian budget in Ireland, the most severe in our history.

This is the reality behind all the waffle about how the EU and the IMF are giving us the money, agreeing the headline targets for the state's finances with us, and then leaving us to work out and implement the details of how the targets are to be reached.

The reality is that the document sets out in exhaustive detail an economic plan with a strict timetable which will force us to reach the agreed targets in reduced spending and extra taxation within the agreed timescale. Failure to stick to the plan will mean the €85 billion money stream will instantly dry up.

The document also sets up an agreed monitoring system which will allow the EU and the IMF to check on exactly how we are keeping up with the plan, so that corrective action can be taken if we start to fall behind.
The reality is that the document treats us like a nation of untrustworthy incompetents who can't be relied on to tell the truth or to stick to a plan. The level of monitoring that we had to agree to is shocking.

It doesn't get down to counting paper clips, but it's not far off. To get an idea of this, scroll down to the bottom of the document, to the part called annex 1: provision of data. This gives a list of the information that has to be given by the Irish authorities to the EU, IMF and ECB (European Central Bank) on a regular basis.
Every week, for example, the government has to tell the IMF, the EU and ECB how much tax it is taking in and how much it is spending. That's every WEEK, not every month, or every three months.

It's the detailed way this is set out in the document that is really humiliating. For example, the Department of Finance has to give "information on the main government spending and receipt items -- weekly, on Friday, reporting on the previous Thursday."

The precise nature of this wording is almost contemptuous. Certainly it leaves no room for back sliding. Particularly spending over-runs.

And that's just one example. The document has a very long list of agreed changes that are to be made in the finances of the Irish state and in the Irish banks and the reporting time to the IMF and the EU on each change is set down.

The banks, for example, have to give a WEEKLY report on loans they are giving out. They have to give detailed information on deposits every month, including how long deposits are for, whether they're from individuals, companies or other banks. The banks have to give monthly data on how much debt they have falling due over the following €36 months.

On the state payroll, for example, the document states that the numbers and paychecks of all state workers have to be reported to the EU and the IMF every three months.

All these state sector workers will have to meet savings targets within nine months or their pay will be cut to make the savings required.

The document also includes details of extra taxes, like property taxes and water charges, that are to be introduced. Apart from the €6 billion reduction of the budget deficit in 2011 which was delivered in this week's draconian budget, the document says reductions of €3.6 billion in 2012 and €3.1 billion in 2013 are also a condition of the bailout deal.