German Perspective on Irish Debt

A letter of mine in the Irish Times:

Sir, – Arthur Beesley and Suzanne Lynch (“Irish debt linked to Angela Merkel talks on Coalition”, Business This Week, October 11th) present a somewhat misleading analysis of the Social Democratic (SPD) position in Germany.

What the SPD is calling for is a co-ordinated European financial transaction tax to fund a common European banking resolution scheme. This is because it wants the financial sector rather than the taxpayer to cover the cost of failed banks.

The Irish Government has adopted a beggar-thy-neighbour position in European policymaking. It supports a European-wide resolution scheme to pay the costs of failed banks, but opposes a co-ordinated financial transaction tax to fund this.

It is the Irish Government which wants the taxpayer to pay for the financial crisis, not the SPD. The German position will benefit all European taxpayers whereas the Irish position only benefits the Irish financial sector.

I am pretty confident that most Irish people, if given a choice, would prefer corporate creditors rather taxpaying citizens to pay for the crisis. In this sense they are closer to the German Social Democrats than their own Government. – Yours, etc,

Dr AIDAN REGAN

Max Planck Institute for the Study of Societies,

Paulstrasse, Cologne, Germany.

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