The full extent of the treachery of government and bankers and the damage done by them to Irish National interests has yet to become clear.
In a truly frightening article, Morgan Kelly, Professor of Economics at UCD, analyses the problems yet to be faced and makes recommendations.—Irish Times 22/05/2010
Burden of Irish debt could yet eclipse that of Greece
Sat, May 22, 2010
OPINION: What will sink us, unfortunately but inevitably, are the huge costs of the September 2008 bank bailout, writes MORGAN KELLY
IT IS no longer a question of whether Ireland will go bust, but when. Unlike Greece, our woes do not stem from government debt, but instead from the government’s open-ended guarantee to cover the losses of the banking system out of its citizens’ wallets.
Even under the most optimistic assumptions about government spending cuts and bank losses, by 2012 Ireland will have a worse ratio of debt to national income than the one that is sinking Greece.
On the face of it, Ireland’s debt position does not appear catastrophic. At the start of the year, Ireland’s government debt was two- thirds of GDP: only half the Greek level. (The State also has financial assets equal to a quarter of GDP, but so do most governments, so we will focus on the total debt.)
Morgan Kelly is professor of economics at University College Dublin
© 2010 The Irish Times