Stability Programme Update proves austerity is for bondholder’s benefit

The release of the latest estimates from the Department of Finance in the Stability Programme Update illustrates in cold figures in whose interests austerity is being implemented. The figures prove that society and the economy are being destroyed so that the bondholders will be repaid.

The release of the latest estimates from the Department of Finance in the Stability Programme Update illustrates in cold figures in whose interests austerity is being implemented. The figures prove that society and the economy are being destroyed so that the bondholders will be repaid.

The estimates indicate that the government will have a primary surplus of almost €1 billion in 2014. In other words that the government will take in around €1 billion more in tax revenue than it pays on public services. So much for the mantra by right-wing politicians, echoed by large sections of the media, that the state is broke and too much is being spent on vital public services.

The deficit exists because the state continues to pay massive amounts of money in servicing national debt. In 2014, this will amount to around €8.5 billion. This turns an estimated primary surplus of almost €1 billion into a deficit of around €7.5 billion. It is time to call a halt to these payments to bondholders – with an immediate moratorium on payments of national debt and payments to bondholders by bailed out banks. The vast bulk of this debt should be repudiated, with a debt audit commission established to ensure those with proven need, such as pension funds and working people, are repaid and that the rich bondholders pay for their crisis.


Notes: Relevant figures available on page 22 of Stability Programme Update. The relevant figures are the ‘Underlying General Government Primary Balance’ (surplus of €945 million) and the ‘Underlying General Government Balance’ (deficit of €7.545 billion). The Department of Finance has previously argued that these figures are more accurate than the ‘Exchequer Balance’ figures, e.g. in Table 1C of the Stability Programme Update December 2009.

In addition to the payments on the national debt included in the Stability Programme Update, around €5.9 billion in payments to bondholders by bailed out banks will also be made.

It should also be noted that the estimates for 2014 do incorporate the imposition of an additional €3.1 billion in cuts and taxes in 2014. The Socialist Party will in the run-in to the Budget 2013 produce a document illustrating a socialist alternative to the imposition of these taxes primarily onto working class people.

Total
0
Shares
Previous Article

Euro crisis engulfs Cyprus

Next Article

Review: Strumpet City

Related Posts
Read More

Mortgage write-downs, not repossessions

Recent Central Bank figures on mortgage arrears reveal an enormous crisis brewing. With all of the focus on the hundreds of austerity measures this government are implementing, the relentless rise in mortgage arrears numbers has, so far, not gotten the attention it deserves.

Read More

Bailout ‘exit’: a return to sovereignty or Troika rule by another name?

With the government preparing to milk the 15 December 'exit' from the bailout, hyperbole is being heaped upon hyperbole to welcome the 'return of sovereignty' to Ireland. The government, and in particular the Labour Party, want to use this supposed success story and the good mood it creates to carry them through the difficult local and European elections next May. What is the reality of this 'exit' and the true state of democratic control by people in Ireland over economic and other policies?

The PDF of this paper can be downloaded and printed here.