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IMF Mody: Irish blew chance of debt cut

Written by Business World, on 16th Feb 2015. Posted in Economy

article headlineIreland had the chance to cut a new deal with its bailout creditors and reduce the country's debt burden back in 2011 but failed to capitalise on it. That's according to Ashoka Mody, the former IMF mission chief, who said that the Irish Government reinforced the view that Germany and Brussels have the right to dictate internal economic policy of member states. Speaking on Newstalk's Lunchtime programme today, he said: "Ireland fell in with that culture, Ireland had its opportunity to, not just for itself but for Europe, in a way, Ireland in accepting the premise that Brussels and Berlin determine economic policy in every country. Ireland fell in with that premise and therefore perpetuated a culture that this current Greek government is trying to break." Asked if the Ireland missed an opportunity to strike a deal, Mr Mody said "absolutely". "There was a burden of debt that would legitimately be declared as an odious debt and this was not necessarily because there was something unique about this particular government but because there had been severe and egregious errors that it inherited," he said. "It was on that premise that it won the election and what the deal at that time could have been, I don't know but it should certainly have been a superior deal," His assertions were rejected by Finance Minister, Michael Noonan: "I suppose when he was there and when he was in a position to do something, he didn't do much for us, so advice now that he is no longer in a position of influence, would be taken lightly," he said. Sinn Fein TD Peadar Toibin has said comments today from the former IMF man in Ireland have hit a nerve with Minister Noonan and the government because they are true. "The comments today by Ashoka Mody have clearly hit a nerve with Minister Noonan and the government. This is because they are true," he said. "His comments that Fine Gael and Labour squandered their mandate for change, refused to win acceptance that the Anglo debt represented an odious debt and that they simply took their lead from Berlin and Brussels are all true and Minister Noonan and his colleagues know it. It seems the IMF themselves and other Troika members were taken aback by the meekness of the Irish government's stance on our debt and the austerity regime. Minister Noonan's dismissal of the comments by shooting the messenger, Mr. Mody, is a flimsy attempt to distract from the comments. As the Eurogroup meet today, the government can still develop a backbone beginning by joining forces with the Greek efforts to steer the EU away from a direction of constant austerity and put in place a plan to deal with the EU's debt problem," said Mr Toibin. For more visit www.businessworld.ie

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