Get back to basics and build future

I REFER to an opinion piece published in The Financial Times (April 12) submitted by an ECB official, Lorenzo Bini Smaghi, in which he effectively admonishes Irish taxpayers, “Pay Up and Stop Whining”.

The Irish taxpayer has just cause to complain. In light of the colossal magnitude of the sovereign debt burden, it is difficult to see how a small, peripheral, export-driven, open market economy on the fringes of Europe can afford to service the ECB/IMF bailout interest charges.

The economy’s annualised growth rate is forecast to be of the order of 0.5%, whilst debt servicing charges are expected to be 5-6%.

Apparently, the Government is intent on entering debt “restructuring” negotiations, with the ECB insisting on immunity for senior bondholders, fearing risk of contagion. But no correlation exists between projected Exchequer revenue streams and interest outflows on loan servicing, precipitating a huge deficit.

How will this deficit be reduced?

Partial sovereign debt default, albeit in a structured and systematic manner, seems inevitable.

Irrespective of what eventuates, Mr Brian Charles (Letters, April 13) is right when he declares, “Ireland has a great future if everyone gets back to the basics and capitalises on its natural resources of culture, people and geography.”

DM O’Connell

Skibbereen

Co Cork