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In the absence of a further income stream austerity is the only alternative to debt restructuring.
But if further austerity, in order to meet the current Anglo Promissory Note (APN) deal, will only result in negative or at best flat growth, and if significant positive growth is what is necessary in order to make our debt repayments any way sustainable, then ipso facto, Ireland’s debt burden is unsustainable without a new deal on the APN.
The Fiscal Compact (FC) is a means of gaining access to a new source of funds, meaning debt. If our existing debt is unsustainable, then further debt under the FC is even more unsustainable. Therefore, signing up for the FC in the Referendum will not solve our debt problem and is pointless. This is why a new APN deal must be a pre-requisite to signing up to the Fiscal Compact. That new deal should be something approximating a 30-year bond at 1%.
Kevin T Finn
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