Restructure Urgently, Advises Leading Economist
While the loan get higher number than deficit total result, it is extremely unlikely that both the sovereign and the banking sector can from them without a debt restructuring. The political pressure to allow creditors of the banks and even the creditors of the government’s share of the pain that the tax payers and recipients of public spending have felt for these two years-plus it is very difficult to resist. One was that Ireland was € 17.5 billion contribution of € 85 billion facility. The other was the 5.8 percent average interest cost. For nearly a 6 percent interest on a facility provided to you by your friends is a bit of a slap in the face.
In the absence of a root, there were no major incentives for Ireland not to proceed with a restructuring, except a desire to be a good European citizen – and because Europe is not very nice to Ireland in all this, and then let a good European citizens’ argument can not win as much support as they would have had a greater generosity of spirit. In this fact, Portugal is the natural next candidate for membership” of the club of countries who need to use the European loan facilities. After that we get to the really big animals it’s just like ultimately, the ECB will have to cough up.