Bloomberg: Roubini – Ireland needs ‘debt to equity’ restructuring, interest adjustment not enough


From BloombergNouriel Roubini (formerly with the International Monetary Fund (IMF), the US Federal Reserve, current professor of economics at New York University’s Stern School of Business and chairman of Roubini Global Economics) interviewed on Bloomberg Television’s “The Pulse,” regarding reducing interest rates on IMF/ECB loans for the Bankers’ Bailout, and the March 17 meeting:

The fundamental problems of the periphery will not be resolved by having a lower interest rate on the official loan… the Irish banks are in big trouble, in putting their liabilities of their balance sheet on the government, the government is insolvent. You need something more fundamental… in Ireland you need to convert that debt and secured claims of the bank into equity as a way of recapitalising the banks. So you need debt restructuring both in the public and the private sector, but that’s much radical than reducing the interest rates on the loans of the IMF or the EU… In my view there is not going to be a comprehensive plan that resolves the problems of the periphery of the Eurozone, especially the excessive amounts of public and private debt…”

ECB raising interest rates “is going to make things worse” for peripheral countries, where debt crisis “will get even worse”, with “continuous recession, or very anaemic economic growth…”

See the interview here.

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This entry was posted in Bankers' Bailout, Budget, Debt Default/Restructuring, ECB/IMF, Economy, EU, Solutions. Bookmark the permalink.

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