Social Democrats co-leader Catherine Murphy has told the Dáil that the response to the Covid crisis at EU level cannot be similar to the response to economic crash in 2008 which led to extreme austerity for some member states, including Ireland. She said that all member states would have to appreciate the scale of the problem despite the fact that some suffered more than others. Asking questions of the Taoiseach during today’s Dáil sitting, Deputy Murphy asked what the Irish government’s approach to the Spanish proposal for a recovery fund underpinned by perpetual bonds was – a proposal which she said could help avoid member states being burdened with further debt.
Catherine Murphy TD said:
“We have a huge national debt ourselves which was partly imposed on us by the EU and we are not alone in this – Italy is another. We, and countries like us, simply cannot take on further debt. It would have catastrophic consequences not just for individual countries but for the Eurozone as a hole. We have very fresh memories of the last crash – it was not a union of equals, Germany and France mostly called the shots and there are signs of the same kind of thinking regarding the current crisis. I believe we should be very concerned about that kind of thinking.
“We must all agree that a huge stimulus programme throughout the EU is required but one which does not involve member states taking on additional debt. Relying on the European Stability Mechanism as the only possible solution in a post-Covid era is a recipe for further austerity which is likely to be detrimental, if not fatal, to the European project. What happened in the wake of the last crisis led to a decade of austerity and subsequent underspending on vital public service infrastructure. Europe won’t get a second chance and this is make or break time for the project.”
6th May 2020