Many individuals and businesses have seen pensions, savings, and profits plummet, as banks have failed, credit has stopped, workers have lost their jobs, and consumers have stopped spending.
In such a climate the countries of the EU must act together to defeat the recession in Europe and restore confidence in the banking system.
This is the message which emerged from this week’s summit meeting of the Alliance of Liberals and Democrats for Europe, which was held in the Hotel Meyrick, which was hosted by Independent Cllr Declan McDonnell and chaired by Flo Clucas, deputy leader of Liverpool City Council.
Ms Clucas said that for confidence in the EU economies to be restored, banks must “come clean”.
“They are not lending, despite the injections of liquidity they have received,” she said. “The reality is that until we know how many banks are actually insolvent because of the so called toxic assets, and how many banks are “good”, trust in the system will not be restored. All we will do is firefight, lurching from one crisis to another. Bankers must come clean.”
Former EU parliament president Pat Cox, speaking of the situation in Ireland said the imposition of interest rate cuts has “not managed to boost demand”.
“There have been cash transfusions to try to get the blood of the economy flowing again, but that still has not worked,” he said. “In Ireland at least, we will need to surgically remove some of the infected parts of the body, namely the ‘zombie’ banks which are weighed down by their toxic assets and simply not solvent.”
Independent MEP Marian Harkin pointed out that the low interest rates of the European Central Bank and being part of the euro are helping to prevent the crisis from being more severe than it is for “some countries, in particular the smaller ones”.
Cllr McDonnell was pleased with the summit and felt it was “important to have some of my European counterparts come to Galway to see for themselves the reality of the situation in Ireland”.
He also hoped that those who attended “will have left with ideas to tackle the economic problems back home”, and will have been impressed enough with Galway to want to return “with family and friends to visit as tourists”.
