Colm McCarthy writes in the Sunday Independent – EU concession still long way from facing reality; Interest rate cut only means the inevitable default will be smaller than expected:
… the overall value of these measures is minor and the situation has changed from impossible to somewhere between hopeless and desperate.
The likelihood is that Ireland will not be able to borrow in the markets for the foreseeable future, without further and more substantial modifications to the existing arrangements with Europe. The Brussels deal has brought a small improvement in the market rate of interest on Ireland’s sovereign debt, but this means only that the default will be smaller than previously expected, not that the risk of default has been removed.
There has been no relief from bank debts shouldered by the Irish Exchequer even though the principle of imposing losses on imprudent lenders was conceded in the case of Greek sovereign bondholders…
The principal beneficiaries of European policy towards Ireland are those who bought bonds from insolvent Irish banks.
… in picking up the tab, the Irish are ‘taking one for the team’, in the phrase of Sharon Bowles, the British MEP who chairs the Economic and Monetary Affairs Committee. The team, in the form of the EU Commission, the European Central Bank and the Franco-German political leadership, persist in the pretence that the protection of creditors of the bust Irish banks, at the expense of the Irish Exchequer, represents some form of generosity to Irish citizens and taxpayers.