Ireland has no liquidity problem, says NTMA economist
Published 09/12/2010 | 05:00
IRELAND is not dependent on expensive loans as it has no liquidity problem, NTMA chief economist Rossa White has told a German magazine.
"Because liquidity is not a problem for Ireland, we are not that dependent on expensive loans," the NTMA economist told 'Manager Magazin'.
Mr White said he expected the sovereign-debt crisis to push the European Union toward more checks on fiscal policy but that it would stop short of a fiscal union.
"Perhaps the balance will move in that direction but I don't see a fiscal union coming," said Mr White, who joined NTMA from Davy Stockbrokers two months ago.
He commented: "I doubt there's a political appetite for that, especially in Germany."
Eurozone finance ministers said this week that they would take no new measures to tackle the risk of contagion spreading from Greece and Ireland -- both of which have received EU-IMF bailouts -- to Portugal and perhaps Spain and Italy.
Mr White blamed Ireland's problems on the financial sector, saying that the real economy was healthy.
He admitted that the Government should have saved more during the boom but denied that the country's debt burden would be excessive if it reached 110pc of GDP.
Belgium, which, like Ireland has a dynamic export sector, has functioned well with a similar debt burden for many years, he said.
Asked why Ireland had requested a bailout, Mr White said the bailout was in Europe's interests as much as Ireland's.
He also defended the 12.5pc capital gains tax, saying it was necessary for a country like Ireland on the edges of Europe with structural disadvantages.
Even a small change would be dangerous because it would suggest a change in direction for Irish taxation policy, he added.