Government urged not to ease up on fiscal consolidation efforts

The restructuring of €28bn in promissory notes last week reduces the net present value (NPV) of government debt by €13bn, or 8% of GDP, according to a research paper by Goodbody Stockbrokers.

While the deal will improve Ireland’s chances of meeting the troika-imposed 3% budget deficit target by 2015, the Government should not ease up in its fiscal consolidation programme over the next two years. The deal was a credit positive event which should be reflected by the ratings agencies, added Goodbody.

Ireland still has a junk status rating from the credit ratings agency Moody’s.