I do not see this so much about the debt itself, but about the belief that Ireland is out of money ("We are in dire straits. We cannot borrow money in the markets." to quote the initial letter) and thus has to accept ECB's program of austerity in order to borrow money. If the belief in that the debt needs to be repayed (it does not) is undermined, the need to accept the austerity package goes away.

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