FORMER SMURFIT Kappa chairman Michael Smurfit said he did not see Ireland defaulting on its debt, as such a move could prompt a collapse of the 16-member euro region.
“I don’t see that on the cards,” Mr Smurfit (74), told Bloomberg television in an interview yesterday. “I don’t think that’s possible really within the European context without bringing the whole [region] into contagion and collapse. It could lead to a serious, serious economic crisis in Europe. I don’t think it’s going to happen.”
Mr Smurfit, who stepped down as chairman of Smurfit Kappa in 2007, also said the financial crisis “decimated” his pension fund and that his bank shares are “of course worthless”. Ireland’s five-member ISEF financial index has plunged 97 per cent since 2007.
“I’ll survive,” said Mr Smurfit, in the interview recorded yesterday in Monaco. “I started with very little and when you start the way I do, you have a certain amount of caution and I still have that.”
“I knew we were going to have a crisis, a property bubble,” Mr Smurfit said. “But I didn’t know the extent of it. I missed it.” Mr Smurfit bought the K-Club golf course with property developer Gerry Gannon in 2005, and hosted golf’s Ryder Cup there the following year. He and Mr Gannon are now in talks with the National Assset Management Agency about the club, which “hopefully” will be run as a business “as usual”, he said.
He also said “it’s not all bad” with the Irish economy. “We went on a diet and are slimming down fast,” he said.
He said he would leave the current corporation tax rate of 12.5 per cent “in situ”. He had made a suggestion that Ireland could raise the rate to 15 per cent for a period of three or four years so that multinationals would share “some of the burden on the Irish purse”.
He envisioned that the higher rate would only apply to those multinationals that could afford it. “Those multinationals that couldn’t afford it would be exempt if they [made] a reasonable case.”
However, such a move would be “contentious”, because once the corporation tax rate was increased to 15 per cent, it would be very difficult to get Europe “to agree to bring it back down again”. (Additional reporting, Bloomberg)
