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Lagarde writes off idea of debt conference as Greek election looms

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Dan O'Brien (Independent Newspapers and IIEA)  and Istvan Szekely (European Commission) at the 'Ireland- Lessons from it's Recovery from the Bank-Sovereign Loop' conference organised by the CBI CEPR and IMF at Dublin Castle.

Dan O'Brien (Independent Newspapers and IIEA) and Istvan Szekely (European Commission) at the 'Ireland- Lessons from it's Recovery from the Bank-Sovereign Loop' conference organised by the CBI CEPR and IMF at Dublin Castle.

Patrick Honohan Governor of the Central Bank speaking to media at the 'Ireland- Lessons from it's Recovery from the Bank-Sovereign Loop' conference organised by the CBI CEPR and IMF at Dublin Castle.

Patrick Honohan Governor of the Central Bank speaking to media at the 'Ireland- Lessons from it's Recovery from the Bank-Sovereign Loop' conference organised by the CBI CEPR and IMF at Dublin Castle.

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Dan O'Brien (Independent Newspapers and IIEA) and Istvan Szekely (European Commission) at the 'Ireland- Lessons from it's Recovery from the Bank-Sovereign Loop' conference organised by the CBI CEPR and IMF at Dublin Castle.

IMF managing director Christine Lagarde has poured cold water on the prospect of convening a conference with a view to striking a deal on writing off Greek debt.

The prospect of such a conference has arisen in recent weeks as leftist party Syriza leads polls ahead of the Greek general election on Sunday.

"What we hear from our constituency, which is 188 countries, is that they want that [debt] to continue to be governed contractual relationships between the creditors and the debtors," Ms Lagarde said yesterday.

"In terms of debt conference, the IMF a few years back had tried to set up something up called the SDRM (Sovereign Debt Restructuring Mechanism)... that has not really been crowned with great success.

"I would refrain from general analysis about debt or from prescribed general collective approaches to that particular highly-sensitive issue which is often best dealt with contractually, and certainly favoured to be dealt with contractually by the players."

Ms Lagarde said she thinks people should be careful to take a nuanced approach when talking about debt and debt sustainability.

"It's also going to be a matter of whether the debt is external or domestic, whether it's in foreign currency or local currency.

"You have a granularity of analysis of debt that is a prerequisite before any judgement is passed on: 'Oh, it's too high, it's unsustainable.'"

She cited Japan as an example of a country that is not in a desperate condition despite having high levels of debt.

Ms Lagarde was speaking alongside Finance Minister Michael Noonan at a conference entitled: "Ireland - Lessons from its Recovery from the Bank-Sovereign Loop."

Mr Noonan did not comment on whether he thought there should be a conference on Greek debt, but has supported the idea in the past.

But Ms Lagarde said one of the lessons that should be learned from the crisis is that recapitalisation of banks is not enough to solve problems on its own.

"Strong independent supervision is also much needed in that context," Ms Lagarde said, adding that a policy of recapitalisation applied to all banks is "not necessarily the best route either".

"The principle of viability of those banks should also be taken into account when such a recapitalisation process is put in place," Ms Lagarde said.

She said that the "chemistry" between Irish authorities and officials and members of the troika worked to produce trust between them.

"Most important I think was the human factor," she said. "The Irish authorities were the best at immediately communicating to all their embassies around the world, to all their contact points, what the principles were.

"If you don't have the capacity, if you don't have a strong treasury, if you don't have a strong national bank and strong competent people within those organisations to actually conduct the programmes... it makes the whole thing a lot more complicated. Clearly there was that human factor in the case of Ireland."

Speaking earlier at a press conference in Dublin, Ms Lagarde said the Irish people and their representatives were "the true heroes" of the bailout programme

"It has been, I know, a very hard journey... but we are now seeing certainly in the numbers, and I hope in day-to-day life, the results of this period of time."

Pink slips due for Aviva staff

Aviva's £5.1bn (€6.6bn) deal for Friends Life has gone through and it seems that the insurance giant isn't hanging around to find the "synergies" companies love to talk about any time they have a big acquisition.

Synergies of course are what other people call cost savings, and these usually arrive in the form of P45s for swathes of staff across the business. In many cases, the people laid off have done nothing wrong, but just happen to be working in a department that has been deemed to be too big in the post-takeover world.

Aviva confirmed in a statement that it would be seeking about 1,500 redundancies across its business once it and Friends Life have combined their businesses.

With the wonderful understatement for which PRs are paid fortunes, Aviva said it "appreciate[s] that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible".

Perhaps not so reassuringly, "no specific teams, roles or locations have been identified" for where the lay-offs will come.

The non-specific nature of the statement seems to suggest that the beancounters have come up with the 1,500 figure and the company will now try to work out where the cuts will come from.

No word on if Irish jobs will be hit but given Aviva's track record in Ireland - who can forget the mass redundancies announced in 2011? - The Punt will be watching closely what Aviva do next.

Irish Independent