Covid will take a decade and a half to overcome financial crisis: EU recovery fund repayment sparks controversy

Dublin: Leading economist Prof. Richard Tol says it will take 10-15 years for Ireland to overcome the Covid crisis. He also stated that this would be the largest financial crisis in the history of the Republic of Ireland.

The allocation of 24 billion from March by the Government has been crucial. He added in a lecture on economics given at Sussex University. The government can borrow money at a much lower cost than anyone else.

Covid’s haste however increased the risk of money laundering and fraud. When a large amount of money is spent in a hurry, things are likely to go wrong. Prof. Richard Tol said that it is important to remember that these mistakes must be paid for.

The 750 billion euro loan from the European Union’s Covid Recovery Fund may cause controversy. Prof. Tol said. Member states are likely to see this as a drain on economic sovereignty. Therefore, the European Union’s proposal to repay the Covid debts will be the subject of controversy.

“This is a big change in the European Union from a confederation to a super state. The legal and political changes to the deal have not yet reached the public domain in Ireland.” Toll pointed out.

This is a radical improvement from the laws on which the European Union has worked on so far. Here each country has its own financial system. Everyone must increase their taxes, pay off their debts and then give the European Union a small portion of the budget.

This is the first time, on such a large scale, that it borrows on its own as a European Union rather than as a Member State. He also addressed a number of legal challenges related to the European Union Covid Recovery Fund. But, Prime Minister Micheál Martin responded by saying that he has not seen any legal changes in the European Union.

The Prime Minister said he could only imagine whether the deal would be challenged in the Supreme Court of Germany and whether anyone would ask for a referendum on it in Ireland. “I have not heard those arguments yet”, but the Prime Minister admitted that the European Union did not have the power to borrow money before.