Honohan: Bailout programme was flawed

There were a number of flaws with Ireland’s EU/IMF bailout programme, although the outcome was much more positive than if the country had tried to avoid official assistance, according to Central Bank Governor Patrick Honohan.

At a conference in Dublin Castle organised by the IMF, Mr Honohan said the interest rate on the bailout loans were too high, but these were subsequently reduced.

Moreover, the troika made a mistake in making the Government responsible for recapitalising the banks. This funding should have come from an external source, otherwise it had the potential to put unsustainable pressure on the sovereign. Again, however, this had a much better outcome than he expected, he noted.