Debt conference backed by academic group

A cohort of the country’s leading academics has called on the Government to publicly back a European debt conference and offer to host the event, in a show of solidarity with Greece.

The open letter calling for a debt conference along the lines of that sought by Greece’s new left-wing government, is co-signed by Trinity College finance professor Brian Lucey and adjunct professor, Constantin Gurdgiev as well as more than 30 others.

A reduction of European sovereign debt burdens to economically objective and socially sustainable levels should be the sole goal of any such conference, the group claims.

The suggested process should constitute a number of different elements but have an increased emphasis on debt writeoff and monetisation.

Debt monetisation is the term given to a two-step process whereby a government issues debt to finance its spending and the country’s central bank in turn buys the debt by printing money.

Effectively, the process parks debt at a central bank for an indefinite period at a low interest rate. Speaking to the Irish Examiner yesterday, Mr Lucey said Greece’s newly elected Syriza-led government has “a very strong economic and social case but the politics of Europe seem to be against them”.

Mr Lucey added that politically and socially, the Greek people had moved past austerity as a policy while running a 4.5% primary budget surplus as required of the country — whereby tax receipts outweigh expenditure by 4.5% of national output — doesn’t make economic sense in a country in need of investment.

Other signatories of the open letter include Michael Taft, research professor with UNITE trade union; Tom Healy of the Nevin Economic Research Institute; and UCD senior sociology lecturer, Kieran Allen.