Taoiseach rejects Kelly argument - The Irish Times - Wed, May 26, 2010
Taoiseach Brian Cowen said today he does not accept the argument that it would be better for Ireland to default.Responding to claims made by UCD academic Prof Morgan Kelly that the Government bank bailout will ultimately leave the State insolvent, Mr Cowen said the balance of evidence suggested a more optimistic scenario than that put forward by the professor.Speaking in an interview with RTÉ radio earlier today, Mr Cowen again said he believed the Government's approach to dealing with the economic crisis was the correct one.Writing in Saturday's Irish Times , Prof Kelly, who originally predicted the crisis, said the open-ended guarantee of banks' liabilities and the Nama bailout will leave the Republic with "a worse ratio of debt to national income than the one that is sinking Greece" by 2012.However, this analysis was roundly rejected by the Taoiseach, who said there was evidence to suggest that Ireland was already in a better place than it had been."I think it is obviously true that one has to try and deal with some of the narrative that has been allowed to be formed which i think doesn't reflect a comprehensive or balanced commentary of where we are at," said Mr Cowen."Really implicit in some of the argumentation is the idea that it would be better for Ireland to default. But we simply don't accept that at all and I think all of the implications from other countries where that happens greatly undermines, not just in terms of financial credibility but also the ability to retain confidence at home," he added.The Taoiseach said there was objective evidence available which confirmed that the Government was taking the right approach to dealing with the economic crisis. However he conceded that the approach chosen was "a difficult one that imposes its own hardships and difficulties for people."
Taoiseach Brian Cowen said today he does not accept the argument that it would be better for Ireland to default.
Responding to claims made by UCD academic Prof Morgan Kelly that the Government bank bailout will ultimately leave the State insolvent, Mr Cowen said the balance of evidence suggested a more optimistic scenario than that put forward by the professor.
Speaking in an interview with RTÉ radio earlier today, Mr Cowen again said he believed the Government's approach to dealing with the economic crisis was the correct one.
Writing in Saturday's Irish Times , Prof Kelly, who originally predicted the crisis, said the open-ended guarantee of banks' liabilities and the Nama bailout will leave the Republic with "a worse ratio of debt to national income than the one that is sinking Greece" by 2012.
However, this analysis was roundly rejected by the Taoiseach, who said there was evidence to suggest that Ireland was already in a better place than it had been.
"I think it is obviously true that one has to try and deal with some of the narrative that has been allowed to be formed which i think doesn't reflect a comprehensive or balanced commentary of where we are at," said Mr Cowen.
"Really implicit in some of the argumentation is the idea that it would be better for Ireland to default. But we simply don't accept that at all and I think all of the implications from other countries where that happens greatly undermines, not just in terms of financial credibility but also the ability to retain confidence at home," he added.
The Taoiseach said there was objective evidence available which confirmed that the Government was taking the right approach to dealing with the economic crisis. However he conceded that the approach chosen was "a difficult one that imposes its own hardships and difficulties for people."
Prof Kelly isn't saying Ireland should default, but that it should end the Guarantee of private banking debt and encourage bondholders to seek an equity for debt swap instead. Cowen seems to find it impossible to differentiate between the debts his developer cronies and the banks built up, and Ireland's national debt. L'etat - c'est moi et mes amis? Frank's Home Page and Diary Index
Unfortunately, Brian Cowen [the Irish Taoiseach / Prime Minister] isn't the Sun King. Louis XVI is far more his style. Last of the Fianna Fáil monarchs we hope, but that won't stop the peasants from starving in the mean time.
A bigger man (not in the dimensional sense - check out his photo) and a better leader would be able to admit that the guarantee was a mistake, or at least has served it's time.
It's not even AAA waffle - "doesn't reflect a comprehensive or balanced commentary of where we are at" - really who wrote that for him?
We'll see just how credible any of it is when those bonds start to roll over.
