Friday 9 December 2016

Colm McCarthy: Only Europe-wide action can help tackle debt crisis

Half-measures and delays have cost the eurozone dearly. Now it's time to get real, writes Colm McCarthy

Published 03/06/2012 | 05:00

The referendum result is a relief rather than an achievement. A No vote would have made a bad situation worse. The Government needs to move on quickly in exploiting whatever opportunity has been created to reduce the burden of bank-related debt imposed on the Irish Exchequer.

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The misfortune of Spain presents an opening, since an Irish-style response to the Spanish banking crisis is clearly unwise. The banking crisis in Spain needs a European solution and the European leadership appears to understand that Spain cannot be cut adrift to embrace unknown, and unknowable, liabilities for the debts of mismanaged banks. Ireland was SETF (Small Enough To Fail) but thankfully Spain and Italy cannot be dismissed as peripheral. It is a shocking state of affairs when European countries can see the misfortune of others as a welcome development, but this is the sad reality, which has been fashioned in pursuit of the single currency project.

The European Union is not structured in a way that encourages decisive management of crises. The intergovernmental nature of the union and the inevitable reversion to national political priorities when crisis strikes create a predisposition to muddle, delay and half-measures.

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