Saturday 24 March 2018

Colm McCarthy: Voting No is a leap in the dark that we can't afford

With no guarantee of bond market re-entry, Ireland may need more money from Europe, writes Colm McCarthy

Controversy over refinancing the promissory note could turn into a sideshow. Recent data from the Central Statistics Office (CSO) and an important report from the Central Bank suggest that the economic and financial outlook remains very challenging.

There is no guarantee that the current programme of emergency lending to Ireland will be followed by a successful return to the sovereign debt markets and an end to reliance on official lenders. A successful outcome to the programme depends almost entirely on events outside the Government's control.

Provided that no additional costs arise from rescuing banks and with a resumption of economic expansion, the Government's planned deficit reductions over the next few years are supposed to see Ireland's debt peaking at 118 per cent of GDP by the end of 2013. In this scenario, the plan is that the State will be able to borrow whatever it needs, both for smaller ongoing deficits and for refinancing maturing debts, from 2014 onwards, without any further loans from the EU and the IMF.

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