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Debt write down must be on the agenda with ECB

Date Released: 06 February 2013

A write down on the €28 billion which Ireland is expected to pay as settlement of the Anglo Irish promissory notes must be on the agenda in negotiations between the Government and European Central Bank (ECB), according to NERI Director Tom Healy.

Presenting a NERI working paper,  entitled Private Bank Debts and Public Finances: Some Options for Ireland, to a large crowd which included prominent economists, journalists and trade unionists in the Gresham Hotel, Dublin, on Wednesday (6th February), Healy said “urgent action” was needed on the promissory note issue.

Healy outlined the unsustainable nature of the current Irish sovereign debt situation stating that the over €3 billion that is expected to be paid each year in relation to the promissory notes amounted to more than the annual spend on primary education.

He added that, “An equitable solution needs to be found to the problem of sovereign debt. It is not right that the entire burden of adjustment is placed on Irish taxpayers, workers and businesses enduring the effects of recession any more than on European taxpayers.”

On the promissory note issue Healy concluded: “Suspending payment, pending satisfactory negotiated outcomes, on the next amount owed on 31st March should not be excluded at this point especially in the context of little apparent progress in relation to the matter.”

In the lively question and answer session that followed Healy’s presentation former Green Party TD, Dan Boyle, raised the issue of the culpability of financial institutions for the sovereign debt situation.

Former leader of the CPSU trade union leader, Blair Horan, said it was “not creditable” to ask other EU States to assist in paying Ireland’s debt, “while the people that caused the crisis are still in receipt of pensions in excess of €150,000.”

In response, Healy agreed that their were many who were to blame for wrong domestic policy decisions, most notably the September 2008 Bank Guarantee, who had yet to properly account for their activities. However, he said that immediate action was needed on the debt crisis because of the effect a lack of State investment was having on the real economy.

Referring to a long queue of youths he had recently seen outside the US embassy, Healy said: “Ireland is at risk of losing its most valuable asset; the skills embedded in our young people and our communities.”

Read the full Private Bank Debts and Public Finances: Some Options for Ireland working paper


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