Sunday 17 November 2019

Kind words but no help is offered

Thomas Molloy Deputy Business Editor

NOBODY likes former colleagues talking out of turn and the International Monetary Fund is no exception.

The Washington-based fund could not hide its irritation yesterday with the fund's former mission chief to Ireland, Ashoka Mody, who now works in the pleasant confines of Princeton University.

Who is right? The easy answer is that Mr Mody could have spoken out earlier when he still ran the IMF's operations here.

But that is a little too glib. The situation has changed as Europe slides into recession.

Besides, the IMF has always been more concerned about austerity and has said many of the same things Mr Mody said. Both basically believe that any more austerity would be bad, but they differ on the detail.

The divergence between the IMF and the rest of the troika, which remains broadly in favour of austerity, has been obvious for about a year, leaving many people in Ireland to believe that the IMF is on our side while Europe is against us.

That belief is a travesty. In fact, while the IMF calls for less austerity, it has made it clear in word and deed that it has no intention of putting its money where its mouth is.

That means the IMF and Mr Mody are effectively calling for Europe to relax austerity at Europe's expense.

The galling thing for Europe is that it, not the IMF, has already relaxed austerity here several times by pushing out the dates for debt repayment at very low rates.

More than anything else it is this decision, taken earlier this year, which has put Ireland on a firm economic footing.

So while the IMF distances itself from Mr Mody, the the organisation and the good professor have more in common than might appear at first glance. Both offer kind words but neither is in a position to offer the concrete help.

Irish Independent

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