Deal! EU reaches agreement on budget and COVID-19 stimulus fund

johnnyskeleton wrote: »

I think you are answering your own question to be honest. You aren't so much asking why Ireland has to pay, so much as why Italy and Spain are getting more benefits from the covid relief funds?

Well the short answer is that Italy and Spain were worse hit than Ireland by Covid. If the cost to the Irish exchequer is more per capita than it was in Italy and Spain, that is because of our government's decision to pay more in covid assistance payments, rather than a true assessment of the economic impact of covid on us. That was, fundamentally, our choice, and to decide otherwise would allow countries to effectively game the system by paying out massive amounts to their citizens to justify claiming more from the EU.

I would also point out that while Spain was historically a wealthy nation, it's GDP per capita is significantly lower than Ireland, Italy, Germany etc, and their unemployment is also a significant problem. Not that their below average economic performance over the last 10 years justifies them getting a higher payment, but I disagree with your suggestion that they are on a par with Ireland in wealth terms, when they are not.

I'm actually all for European solidarity and I have asked before why Greece and Italy for example didn't receive proper support in dealing with the migrant crisis from the EU. The kind of support we provided was to provide a free Mediterranean ferry service for people smugglers, I'd say the Italians were delighted to have us.

The reason they are getting support is because populists are gaining strength in Spain and Italy and the only way the EU can potentially halt their rise is to buy off the population. If either country were to leave it would fatally undermine the project and the EU is fully aware it cannot afford to lose another big member states. Like any organisation the primary objective of the EU is the preservation of itself.

If it were Ireland facing the pandemic alone we'd be getting warm words, not low interest loans or grants. Some will no doubt point to the Brexit fund, but as net contributors we are paying for that ourselves. This country went through a financial hell thanks to troika austerity, it's funny that there seems to be an endless supply of money now that big states need it.

It's the hypocrisy that gets me.

(Also GDP is not a true reflection of Irish wealth, due to the amount of multinational IP warehoused here)

PeadarCo wrote: »

If you think austerity was bad with the Troika it was painless compared to what would have happened if they had not stepped in and bailed the country out. And even the help the "PIGS" got was difficult to get because you were asking people in other countries to bail Ireland out most of which were and are still poorer. This meant citizens in other countries took a lot of persuading. Why should poorer countries have had to bail out a rich country like Ireland?

The reality is Ireland is a rich country in EU terms and especially globally. Complaining out being net contributer is a bit like a rich person complaining they have to pay more taxes and get less benefits from the government compared to a poor person.

If you want the benefits of the club you have to pay the fees. Ireland is a small very open economy heavily dependant on global trade and the EU gives massive commercial and diplomatic benefits. Again look at the UK a far bigger country and economy and look how its suffered without having full left the protection of the EU.

I think you are missing my point. If the country has been left to collapse financially of course it would've been a disaster. What I'm saying is now the big boys have the bowl out the EU has found a way to magic up the money to support them. We were left to take the 6% loans in a take it or leave it, as some sort of moral hazard exercise. The Paddy's didn't have a choice and the Commission and ECB knew it. Italy and Spain have options, like leaving, and that's the difference.

The covid bailout isn't solidarity for solidarity's sake - it's the institutions protecting themselves. If there was genuine solidarity in the Union, loans to Ireland wouldn't have had a massive mark-up. (Financial) Bombs wouldn't have been threatened to go off in Dublin...

Italy is a wealthy G8 country that has refused to reform, and indeed refused to accept conditions to reform. It's had 12 years since the crash and the state sfa has changed.

Podge_irl wrote: »

The loans to Ireland didn't have a massive mark up, they were at a severe discount to the market rate.

Several of the EU member states have acknowledge that their response to the crash was not sufficient and they should have done more. There was still quite a lot of resistance to that idea from some of the more frugal states, but the covid fund is simply an evolution of EU strategy and collaboration. It reflects lessons learned from the crash.

The other countries borrowed the funds on the markets they loaned to Ireland at I think around 2% (iirc) then loaned those funds collectively to Ireland at 6%. The EU took the absolute maximum in terms of setting a punitive rate, it set a rate just below that of the lockout rate.

The loans were hugely marked up, and for what? The money tree does exist.

johnnyskeleton wrote: »

How do you measure that though? I would consider France, the Netherlands, Finland and Poland to all have higher rates of hard euroskepticism than Spain, and Italy's Euroscepticism is more about leaving the Euro than the European Union. So I don't understand the argument that the covid payments were secretly paid to stave off populism, and the proof of this is that they were paid not to the countries with the bigger euroskepticism movements, but to the countries most badly hit by covid.

They're is nothing secret about it. Failure to strike a deal was considered by some of what you'd consider reasonable commentators as the beginning of the end of the project.

A deal that didn't shore up support for the countries most effected by covid would certainly have ignited serious discussion of "why are we in the EU?" in these countries. And rightly so - talk of solidarity is cheap when action is needed.

I just wish we could've seen some of that kind of solidarity when we needed financial assistance. Instead we got the minimum given and the maximum extracted. IIRC Non-EU Norway gave us more favorable terms with their assistance than the EU and their threats of financial bombs, we should not forget that.