Time for a whole new strategy on negotiations
We can fool ourselves and even Europe but we won't fool the ones that count -- the markets, writes Colm McCarthy
Published 18/12/2011 | 05:00
THE Government's negotiating strategy with our European partners consists of two conflicting components: regular expressions of confidence that all of Ireland's public debt will be repaid, accompanied by requests for debt relief.
The necessity for debt relief is denied by the aforementioned expressions of confidence. It is undermined further by assertions that Ireland expects to re-enter the bond market next year. If you are confident that you can pay all your debts, so confident that you expect to be back in the markets pretty soon, what is the case for debt relief? This never looked like a coherent strategy and it emerged last Friday that the European Central Bank is not sympathetic to the case put to them.
This is the same ECB whose actions have imposed excessive bank rescue costs on Ireland, through its insistence that bank creditors outrank sovereign lenders and are the exclusive responsibility of host governments. The reported ECB attitude on Irish debt relief should come as no surprise to anyone. Taking one for the team will not go unpunished in the new European order.