Wednesday 18 January 2017

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.

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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.

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