Friday 21 October 2016

Chopra says ECB threat to Ireland 'outrageous'

Colm Kelpie Exclusive

Published 18/04/2015 | 02:30

The European Central Bank acted in an "outrageous" manner and went beyond its remit when it pressured Ireland to commit to years of austerity, according to Ajai Chopra.

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The International Monetary Fund's former Ireland mission chief made the damning assessment during an address at Oxford University.

A recording of his speech uncovered by the Irish Independent reveals Mr Chopra telling an audience that the so-called 'Trichet letters' were an "outrageous overreach" of the ECB's mandate.

In a stinging criticism of the bank, Mr Chopra says he isn't surprised people in Ireland were upset about the letters between the former ECB President Jean-Claude Trichet and the late Brian Lenihan in 2010 in which Mr Trichet threatened to cut off funds for the Irish banks if the Government did not apply for a bailout.

"The letters actually pressed Ireland to do fiscal consolidation, it pressed them to undertake vague structural reforms without specifying what these were, and that, in my view, is an outrageous overreach by a central bank," Mr Chopra said.

And he also claimed that the possible effects of burning the bondholders that were put forward by Europe were "exaggerated."

He told the Irish Independent last

Irish Independent

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