Last night’s announcement that Ireland is to be hobbled with a €85bn bailout package was a sad moment for Ireland.

The 5.8% average interest rate will be an onerous burden for taxpayers for a decade to come, meaning higher taxes, less investment and poorer public services. 

Ireland’s negotiating team in these talks won’t be representing the country at the World Series of Poker any time soon – from the giant bluff that was the bank guarantee in September 2008, to the craven acceptance of high priced external assistance this weekend, they have played their hand exceptionally poorly.

News that almost the entirety of what remains in the National Pension Reserve Fund is to be ploughed into the banks is deeply disappointing.

What could have been a war chest for growth and investment is to be dedicated to bringing our zombie banks back from the dead.

Using up the Pension Fund and the country’s remaining cash reserves will narrow our margin for manoeuvre in years to come.

The Government must come clean on the different ingredients that make-up the 5.8% ‘blended’ interest rate. If the IMF is providing funds from as low as 3% to 4%, this means that the funds coming from our EU partners could carry usurious interest rates of 6%, 7% or more.

If the 5.8% rate is based on the entire EUR 85bn package, including the state’s EUR 17.5bn contribution, then the average effective rate on funds borrowed could be 7% or more. The Taoiseach was highly evasive on these points at yesterday evening’s press conference, and we urgently need clarity.

These rates are so high that our economy will have to grow at a serious rate of knots if we are to have any chance of paying them off without beggaring the country.

The biggest lacuna in the government’s so called ‘National Recovery Plan’, published this week, was the lack of any coherent growth strategy. There will be no recovery at all without growth and jobs.

In the future, the Irish banking system will be split into ‘survivor’ banks and ‘non-sustainable’ banks – the bad and the ugly.

We urgently need a new Resolution Mechanism for insolvent banks so that appropriate burden sharing can be imposed on banks’ investors, taxpayers aren’t forced to pick up the full tab. 

It is shambolic that the government has not yet introduced such a mechanism 26 months into our banking crisis, given that the British had a mechanism in place within months of Northern Rock running aground.

Bondholders who took a punt on Irish banks in return for a risk premium should never have been given the ‘free lunch’ of a blanket bank guarantee. Now is the time for hard-headed negotiation with these investors, and we can legitimately plead inability to pay.

The European Union is a community of sovereign but mutually dependent Member States.

There must be some recognition that balanced growth and economic development throughout the EU, both at the centre and at the periphery, is essential to secure legitimacy for the European integration project.

Making one country the poster child of austerity pour encourager les autres will only be to the detriment of the European project.