So you're sure the debt can be paid and isn't onerous, but you're also arguing that lenders should impose punitive rates?

IM:

Even if we ignore Japan

Japan "managed" by adopting a zero interest rate policy. This had the effect of making it cheap to hide the insolvency of its major banks for a decade -- at the cost of a "lost decade", (or two), of economic stagnation from which the Japanese economy has yet to truly emerge. It also helped GE and others who profited immensely from the "Yen carry trade". Richard Koo has written extensively about this "lost decade" and made an excellent presentation at George Soros' forum this last spring.

A common consequence of prolonged cheap money regimes is the creation of asset bubbles. In the US Greenspan's prolonged cheap money policy combined with "see no evil" regulatory forbearance helped fuel the bubble that broke in 2008. That bubble which began in 1999 served to facilitate the extraction of wealth from the US middle class by the US banking elites through home equity loans that made possible the continued purchase of cheap Chinese goods that also profited those same elites -- at the expense of the US worker whose real income has declined.

The end result of such cycles is economic devastation for the many and, absent governmental intervention as with FDR, consolidation of the wealth and power of the financial elites. As a collective institution that financial elite is incapable of concern for the health of the body politic or the average citizen and, in a failed attempt to continue to extract expected returns, imposes massive gratuitous damage on the society as a whole. This is what is looming for Ireland.  

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."