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Options for Ireland's situation

Page history last edited by Holbrook Fields 10 years, 2 months ago

Introduction

Below are broad options set out for Ireland's economic situation.

 

Stick to the Plan

 

Positives

 

Negatives

 

Default

 

The points below are based on Wolfgang Munchau's article in the Irish Times of 2 December 2010 which can be found here

 

How could this be done

 

  1. Revoke guarantee of banking system
  2. Convert subordinated and senior bondholders into equity holders
  3. Assume a growth rate of 1% and if Ireland is found to be unable to pay its debts then restructure Irish sovereign debt

 

Positives

 

  1. Ireland's debt burden would be reduced and its taxes could be spent on the needs of its citizens
  2. European banks would be forced to write down losses on loans to Irish banks

 

Negatives

 

  1. Irish banks would have no funding to provide money for an undetermined period of time
  2. Ireland would be cut out of capital markets for an undetermined period of time
  3. European bond yields would rise
  4. Relations would European partners would be severely damaged
  5. Ireland would become less attractive for foreign direct investment due to instability.

 

Leave the Euro

 

How could this be done

 

Positives

 

Negatives

 

Other

 

How could this be done

 

Positives

 

Negatives

 

What the EU should do

 

 

Useful Links

Name of website/document
Description

Will it work? No. What can Ireland do? Remove the bank guarantee and default

Article by Wolfgang Munchau's in the Irish Times of 2 December 2010

Another Voice for Default


Blog post by John McHale on The Irish Economy blog based on Wolfgang Munchau's article
   

 

 

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