Monday 23 October 2017

Colm McCarthy: We have to accept that more cuts and higher taxes are on the way

Without a deal on bank debt, our position remains unsustainable, writes Colm McCarthy

CIVIL UNREST: Taxi drivers staged a protest in Madrid yesterday against austerity measures and plans to liberalise their
industry. One of the protesters jumped on to the vehicle of a taxi driver who continued to work.
CIVIL UNREST: Taxi drivers staged a protest in Madrid yesterday against austerity measures and plans to liberalise their industry. One of the protesters jumped on to the vehicle of a taxi driver who continued to work.

SO long as Italian and Spanish borrowing costs remain at unsustainable levels, the eurozone crisis lumbers on. There is no mystery about the measures needed to bring it to a close.

There needs to be a resolution to the problems in Greece, either a final and decisive write-off of debts which Greece cannot meet or an exit by Greece from the euro. In either case, there must be accompanying actions to ensure that doubts are removed about the viability of sovereign borrowers elsewhere, particularly Spain and Italy.

ECB president Mario Draghi understands that ECB action will be needed in the short term. In London last Wednesday he declared: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."

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