IMF Deal – ECB puts its own interest first and not Ireland. IMF outs the truth. Chopper on the ball.

Colm McCarthy in the Sunday Independent P31 writes that the IMF report suggests that Ireland will not be able to re-enter the bond market in 2013 because we have taken on too much in the bank bailout by saddling the Irish tax payer with the complete burden. Clearly, the IMF want the bank bondholders to share the insolvency burden where as the ECB clearly does not because they themselves will then take a hit on the big debt that we owe them.

“Being kind to the bondholders” has been a disaster for Ireland and the IMF is a little worried about its loans in this situation. The IMF appears to have wanted the Bond holders to be part of the resolution now but the ECB won the argument.

Irrespective what happens bank debt, Ireland Inc will have to undergo cost cutting and austerity which is unavoidable. So if Sinn Fein or ‘Gilmore’ Labour claim otherwise, either or both are telling porky pies.

“Employment in manufacturing, having risen steadily from 1993 onwards peaked in 2002 and has been falling ever since.” The twin bubbles in public spending and in bank credit squeezed the traded sector badly, and the strong euro wexchange rate did the rest. The result has been a serious and widespread loss of competitiveness across the traded sector, including agri-business, manufacturing, tourism and export services. Since it is not possible to cut the exchange rate…that means reductions in payroll costs and in all other elements of non-payroll overheads.”

I include the IMF report in its entirety here: IMF report on 2010 deal with Ireland

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