Seamus Coffey: A default for Ireland? It's not as simple as that, I'm afraid...
The outcome of the latest EU emergency summit was largely as expected. From an Irish perspective the question that immediately arises is whether we should be looking to default on some of our sovereign debt in the same way that is now been allowed for Greece.
Agreement was struck with the banks holding Greek bonds that they would incur a 50pc haircut resulting in losses of around €100bn for European banks. These banks have until next summer to improve their capital positions or they will be forced to seek recapitalisation funds from their national governments to cover the losses.
Greece has a general government debt level that will top €350bn by the end of this year. That is equal to 160pc of Greek GDP and findings from the European Commission show that this was set to spiral to 200pc. If there was a 50pc write-down on all Greek debt, the reduction would be more than €175bn.