Saturday 18 November 2017

We can't pay this burden of bank debt, so let's start talking default

Political parties need to address the issue of debt restructuring in this campaign, writes Brendan O'Connor

RELUCTANT CONVERT: Even Brian Lenihan has shown signs that he is slowly coming around to accepting that bondholders have to share the burden. Photo: Gerry Mooney
RELUCTANT CONVERT: Even Brian Lenihan has shown signs that he is slowly coming around to accepting that bondholders have to share the burden. Photo: Gerry Mooney

THE elephant in the room is slowly coming into focus. Up to now, there had been a bizarre situation whereby most of the international community, from left to right -- excluding those who work for the EU and the IMF -- and a huge majority of the Irish people, knew the level of debt facing this country was not just immoral but also impossible.

Even our great god the markets believed it, the evidence being that they were increasingly pricing in a default of Irish sovereign debt. Our other great god, the EU, probably believed it too, but obviously it couldn't say so. But our politicians, even in a general election, were unwilling to articulate this widely held belief.

We were constantly told we needed to put aside the moral part of it. Apparently morality is not important in these things. Everyone agreed it was wrong in a capitalist society that the debts incurred by a small number of people in the private sector should be turned into crippling public debt. We were just told that this is how it had to be.

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