Friday 23 February 2018

Coalition dismisses IMF claims on debt writedown

Finance Minister Michael Noonan
Finance Minister Michael Noonan

Colm Kelpie and Ailish O'Hora

FINANCE Minister Michael Noonan has dismissed claims by the former IMF chief of mission to Ireland that the Government scuppered an opportunity to secure a debt write-down.

Economist Ashoka Mody yesterday reignited the controversy over Ireland's bailout arrangements by suggesting that the Coalition was in a position to negotiate a "slower pace of austerity" when it came to power in 2011.

Mr Mody said a "superior deal" with extra concessions should have been secured but that the Government agreed to go along with what "Brussels and Berlin" wanted.

"Ireland fell in with that premise and therefore perpetuated a culture that this current Greek government is trying to break," Mr Mody told 'Newstalk Lunchtime'. Asked if the Government missed an opportunity to secure a better deal, Mr Mody replied "absolutely".

Mr Mody said the Government had inherited an "odious" debt that arguably should not have had to be repaid.

"There was a burden of debt that would legitimately be declared as an odious debt, and this was not necessarily because there was something unique about this particular government but because there had been severe and egregious errors that it inherited.


"It was on that premise that it won the election and what the deal at that time could have been, I don't know, but it should certainly have been a superior deal," he added.

Mr Mody, a visiting professor at Princeton University, said when the Government was elected it had a "mandate" and "so much going for it".

He also said that water charges were symbolic, adding the financial "burden was borne unequally".

Reacting to the comments by the former IMF official, Mr Noonan said Mr Mody did little to assist the Government when he was based in Dublin.

"When he was there (in Ireland) and when he was in a position to do something, he didn't do much for us. His advice now that he's no longer in a position of influence, I would be taking lightly," he said, while attending the meeting of EU finance ministers in Brussels.

Separately yesterday, Health Minister Leo Varadkar insisted Ireland and Greece are in two very different situations economically.

"Our economy is growing and there is more people at work. They have a humanitarian crisis in their country," he said.

Irish Independent

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