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THE FORMER HEAD of the IMF mission to Ireland has admitted that the austerity-only policy chosen for the handling of Ireland’s EU-IMF bailout was a mistake.
Ashoka Mody said there were three options available to the EU and IMF when arriving in Ireland – burn bondholders, offer easy terms and conditions for loans, or pursue austerity measures – and the Troika had opted for the latter option.
Mody said recent moves to make the terms of the loans more manageable was an indication that the tactics chosen for dealing with Ireland were the wrong ones.
Having secured a reduction in the interest rate on its bailout loans in 2011 – bringing down the original interest rate of 5.83 per cent – Ireland is now seeking an extension in the repayment deadlines for its EU loans.
“Since there is no view currently on how much burden of this crisis should be borne by the private bondholders, we are now left with only one choice – and that choice is to increasingly make the official financing easier and more concessional,” Mody told RTÉ’s Morning Ireland.
“The risks of the programme succeeding were such that the complete reliance on austerity was not a reasonable way to go,” he said.
Mody added that “something has to give”, because in the absence of the decision to burn bondholders, the only options available to Ireland’s lenders were to ease the terms of their loans, or to stimulate growth.
He said while many people presumed sovereign defaults were “extremely costly”, this had historically not been the case.
“We know from the evidence that we have that in a way bondholders treat that as almost welcome because it reduces the uncertainty – and normally there is a very quick return to market, the output losses are relatively minor. And so the history is very clear on the cost of doing so.”
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Had not realised they had not yet provided a replacement mobility allowance for those who require it. Typical government not important as there are no votes in it…..
When it comes to the golden circle the wheels of government can spin very fast…when its the most vulnerable they barely turn at all.
Wonder will they change when they get a spanking on may 23..
Yet Water tax legislation sailed through in record time………………makes you wonder about priorities doesnt it?
It is a pity they would not cut their own mobility allowance as in travel claims just to attend the Dail, their place of work!
Government policy. The weak, the needy and feeble are shoved aside, and put at the back of the Q. Don’t forget the feeble minded weaklings who pretend to govern us subscribe to the Darwinian ethic of, ‘Only the strong survive’. In their world that means only the greedy and their corrupt underlings survive. We can be strong in ways that they will never know about. God Bless you all. Get up now and walk the walk and talk the talk.
Govts do not do planning or forward thinking. That would entail utilising brain cells. Totally alien concept to the powers that be!!!
Disgraceful Gov. has not catered for people with disabilities. Should it really matter if a person was diagnosed with a disability in the last few months as opposited to 13 months ago.
Gov Policy = Ageism and discrimination at its best.
unless they get told by the mafia bosses in brussels or the troika/IMF or the banks these lot in power couldn’t run a decent piss up on st paddys day
have your say