Absolutely excellent post but more than likely wasted on those who have nothing else but a bitter and juvenile agenda and who will refuse to offer a balanced rebuttalIt's a memorandum of understanding.
The parties understand that Ireland is unable to secure borrowings in the external markets at the moment due to the cost of those borrowings. They further understand that Ireland has messed up it's economy by spending substantially more each year than it actually earns. In addition Ireland allowed its banks to grow to a ridiculous size and then allowed them to become over exposed through a combination of an excessive reliance on wholesale funding which disappeared in the credit crunch and an excessive exposure to a huge property bubble in Ireland. The collapse of the assets of the banks has created an additional burden on the State by virtue of their guaranteeing most of the liabilities of same banks.
Following on from the above the lending parties are prepared to make a range of funds available to Ireland should they wish to draw them down. The facilities will vary in term but will last no more than 7.5 years. The funds will be provided from a combination of sources and on a combination of different terms - however if all facilities were to be drawn down the combined average interest cost would be c5.8% at the moment. The funds will be available to draw down in tranches subject to satisfactory attainment of agreed goals.
The lending parties understand that Ireland will use 17.5Bn of its own funds as part of the resolution of its debt problem. These funds will come from the NPRF and other cash deposits held by NTMA. In addition a range of structural and fiscal measures will be taken by Ireland over the coming years with a view to reducing their fiscal deficit to 3% by 2015.
There is no obligation on Ireland to access this facility. There is no obligation on the lending parties to provide this facility. However both parties understand that this mou has been entered into in good faith.
Not a contract. Not a treaty. We don't have to take it up - but if we don't we are bankrupted and will need to cut a minimum of 19bn out of our budget next year (a minimum because when we go back into the market to roll over our existing 90bn national debt we will have to pay interest at rates of 10% plus. Alternatively we can default on everything and see how that goes.