Rate cut was never off table -- it was simply a matter of time
Published 23/07/2011 | 05:00
The reduction in the interest rate on Ireland's bailout loans is a major victory for Enda Kenny as Taoiseach, but even more it's a victory for common sense and financial prudence.
Agreed in the frenetic days of November when Ireland's economy looked like it could collapse under the weight of its own debts, the interest rate levied -- mainly at the insistence of Germany -- was an attempt to punish countries for their own profligacy.
The rate of 5.8pc was not based on grand financial principles, but was based instead on a debatable idea that governments would change their long-term behaviour if rescue assistance was made extremely expensive.