I HAVE NO DOUBT that an opportunity will shortly present itself to the Irish Government. How they handle it and who they choose to handle it will be of the utmost importance. This opportunity will only present itself once and if the opportunity is missed there may not be another chance. The economic future of Ireland will depend on it. If the opportunity is taken, the benefits will be huge and will truly signal the start of an economic revival in this country. Everything else that has been tried has failed and will continue to fail until something substantial and meaningful is done.

The much sought-after reduction in interest rate may satiate some but I can only see it postponing the inevitable. With bond markets trading at record highs for Irish sovereign debt, there is no easy or early return to those markets. Greece and Portugal have joined Ireland in the liquidity mire and all now rely on the IMF/EU bailout. As the Greeks demonstrate aggressively in Athens, holding general strikes that halt the country and disrupt flights, the Irish and Portuguese seem to be quietly accepting their fate.

The banking crisis saw tens of billions of euro go up in smoke! Anyone in any of these countries should be rightly aggrieved. But maybe the Irish government are playing a clever game, toeing the line as much as possible – as painful as it is at the moment – and waiting for an opportunity to present itself. If they are, I applaud them for their steely resolution. If they are not, I worry for each and every one of us.

Of the three countries in peril, Ireland is certainly not in the worst position. Recent reports from the IMF have suggested that targets are being hit and that Ireland is largely compliant with the conditions of the bailout. News from Greece is far more negative and the situation in Portugal is not given as many media inches.

In Ireland there is one main question. Is the cost of the banking and economic crisis actually manageable? I for one don’t think it is, which means that when the opportunity presents itself, it needs to be taken.

Greece will default on its loans. I would suggest that this will happen in the very near future. As and when it happens, the opportunity will be there to renegotiate the extent of the bailout loans. This is nothing new in banking circles, it often happens. There has to be a significant amount of debt forgiveness, reducing the total amount owed. In everyday banking this allows businesses to keep trading, keep employing people and turn themselves around.

Domino effect

Debt forgiveness will have a domino effect. Any forgiveness given to the state will be passed onto the banks which will ultimately be passed onto businesses and each and every one of us. This is the only real solution! The economy needs support and impetus to keep moving forward. The stimulus provided by a structured programme of debt forgiveness would be unrivalled.

Why is it so important to take advantage when this happens? Look around you, listen to the news. It’s very difficult to find anything positive to report!

Bord Gáis Energy has warned that energy prices will rise later this year. The wholesale price of gas increased in May and the body expects to apply for an increase in the prices that they charge their customers next month.

The latest Purchasing Managers Index compiled by Ulster Bank shows no sign of recovery in the Irish construction sector. The continuing decline in activity is leading companies to continue reducing staff numbers and purchasing.

Increased stress levels amongst men are leading to mental health problems. As people struggle with reduced income and increased cost of living, many are struggling to cope. The knock-on effect of the economic crisis is having widespread consequences and something needs to be done.

The banks are still not lending to small business. This is a necessity for any turnaround. Taking the opportunity and seeking debt forgiveness when the opportunity presents is the only solution. It might be a bit bold of me to suggest that it is common practice – it’s not – but in these exceptional circumstances, it is more commonplace than you might expect. European heads will be expecting it, the bond markets are already pricing it into the coupon rate.

I don’t watch too many Dáil debates on the television. I do watch a number of current affairs debates. There are very few banking and financial experts that make sound business sense. There are one or two and it is essential that their views are heard. Of all the people that I have listened to, Peter Mathews seems best placed and steeped in the right experience to achieve what is required.