Thursday 21 September 2017

'Economy is in a rocky place but borrowings are sustainable'

Laura Noonan

Laura Noonan

THE top civil servant in the Department of Finance yesterday admitted it would be "very hard work" for Ireland to repay its debts even without the eurozone crisis.

But department secretary general Kevin Cardiff insisted the country's borrowings were "sustainable".

Mr Cardiff was speaking as he faced down searing criticism from the Public Accounts Committee about his department's role in Ireland's boom to bust implosion.

In a grilling lasting more than four hours, deputies also quizzed Mr Cardiff about his department's response to inaccurate bonus information supplied by Bank of Ireland and the measures taken to limit future bank bonuses. Ireland's debt levels dominated much of the exchange, but Mr Cardiff repeatedly stressed he could not second-guess the outcome of high-level talks going on in Brussels around a new rescue fund for European countries.

When asked about the sustainability of Ireland's debt as things stood, the senior civil servant admitted "dealing with the scale of debt in our own economy would be very hard work" even without the eurozone crisis.

He shot down repeated suggestions that Ireland would ultimately have to default on some of that debt.

"The economy is in a rocky place, but it looks like our debt is sustainable," Mr Cardiff insisted.

"We have to also convince the markets that there is a will to sustain it."

The new European rescue package will include lower interest rates for Ireland and may help us to buy back some of our own government bonds at a discount.

Mr Cardiff also strongly defended the Department of Finance's performance in the boom-to-bust cycle, saying its predictions were in line with other experts. He said it was not the department's job to "undermine" the role of elected ministers.

On the Bank of Ireland debacle, Mr Cardiff said he had made his feelings known about being "misled" by the bank.

He added the department was in the process of compiling standardised information about bonuses across all bailed-out banks.

Irish Independent

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