independent

Sunday 20 April 2014

Ireland should "play hardball" in negotiating European banking deal - top economist

Citigroup chief economist Willem Buiter
Citigroup chief economist Willem Buiter

GLOBAL banking giant Citigroup’s top economist says Ireland should “play hardball” by threatening to veto any European banking deal that does not include recouping the cost of our bank bailouts from the euro zone’s rescue fund.

This country should be prepared to risk short term unpopularity in Europe for the long term economic gains of winning back €30bn to €60bn for taxpayers, Citi’s chief economist Willem Buiter said.

Reasoned arguments have not been enough to win the kind of deal Ireland “deserves” on bank recapitalisations, he said, and that means the country needs to take a tougher line.

European authorities need approval from all 18 euro member states for a deal clearing the way for direct recapitalisation of banks, as part of the wider banking union plans, he said.

That creates the opportunity for Ireland to force a deal in its favour, he said.

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