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Colm McCarthy: It's hard to pick the fruit with your hands tied behind

THE celebrations marking Ireland's ability to sell bonds at unsustainable interest rates have been badly overdone. Countries facing a high risk of default have always been able to borrow short-term money at unaffordable interest rates.

The budget deficit is set to be 8.6 per cent of GDP this year. Much of this deficit is structural, in the sense that economic recovery alone will not be enough to eliminate it. Permanent measures are needed to deal with the structural component of the deficit. If it can be cut to zero over the next few years, there will be a deflationary impact on an already depressed economy. Ireland can do nothing about this.

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