Morning after bailout Irish wonder: Will it work?

* Irish talk of growth forecasts, interest rates, banks

* Pessimism, resignation as Irish ponder bailout

By Lorraine Turner

DUBLIN, Nov 29 (BestGrowthStock) – These days, people on the streets
of Dublin talk about bond yield spreads the way people in other
countries talk about the weather.

So there’s no surprise that the morning after the country
received an 85 billion euro ($113 billion) bailout package from
the EU and IMF, the breakfast talk was of four-year growth
forecasts, sovereign interest rates and bank recapitalisation.

In short: will it work?

As just about anyone in Ireland can tell you from the
wall-to-wall coverage on the TV news, the loan plan includes 35
billion euros to clean up the balance sheets at Irish banks and
50 billion to help it cover its budget expenses.

“I don’t think it probably will be enough. The banks are
going to need more than the 35 billion euros,” said Michael
Madden, in his early thirties, holding his young daughter at
Dublin’s Connolly train station.

Ireland’s economy has been hit not just by a debt crisis but
by a recession that has driven unemployment up from 4 percent to
14 percent. Pessimism is the order of the day.

“WE HAVEN’T GOT A PRAYER” thundered the front page of the
Irish Daily Mirror. “Europe’s bigwigs last night saved fatcat
bondholders and saddled taxpayers with monster debts.”

Jack O’Connor, head of the country’s biggest trade union,
Siptu, said the plan “should have been unveiled in Lourdes,
because short of a miracle it is doomed to failure.”

Everyone can tell you the economy needs to rebound if
Ireland is to meet its target of getting its deficit down to 3
percent of GDP in four years — the IMF and EU gave them an exta
fifth year — and put the unemployed back to work.

IT worker Richard Wood, 40, said he thinks the government’s
growth forecasts may be a bit optimistic, but said the Irish
will figure out a way to adapt.

“We are going to adjust as long as there is some growth …
if they are saying 2 to 3 percent growth then there’s probably
at least 1 percent growth.

“We’re still hiring people at my company,” he added. “There
are certain sectors that have been hit, but there are others
that will continue to grow. The economy was always growing
before the boom and it will continue to do so.”

The 85 billion euros includes 17.5 billion that Ireland will
contribute to lend to itself from its government employees’
pension fund, essentially pledging the family silverware. That
was money opposition parties were hoping to use in investment
programmes to help fund economic growth.

Helen Stanley, in her early thirties, who works for an
advertising agency, said the raid on the pension fund was
troubling, but probably necessary.

“I don’t think it’s fair, but they are in a tight situation,
so we’ve got to use all the cash we have.”
(Writing by Peter Graff; Editing by Janet Lawrence)

Morning after bailout Irish wonder: Will it work?