Madam, – The article by Michael Cragg and Joseph Stiglitz (Opinion, April 9th) makes me wonder if Garret FitzGerald would like to reconsider his remarks about “celebrity economists” and the damage they are supposedly doing by suggesting that the policy measures being imposed on the country by the EU (and to a lesser extent by the IMF) may not work (Opinion, April 2nd).
Prof Stiglitz, a Nobel prize winner, and one of the small number of economists of international standing who have taught at an Irish university, is most certainly a celebrated economist, and more so than any currently working in Ireland.
The opinions expressed by Cragg and Stiglitz are not peculiar to them and to home-grown “celebrities”. We know they are shared within the IMF and even within the ECB. We know that the overwhelming majority of informed comment from the United States and the United Kingdom has been highly critical of the imposition of a condition of no restructuring of bond debt for continued liquidity support for the Irish banks and longer term finance to meet the Government’s borrowing requirements.
Cragg and Stiglitz criticise the Irish Government in this context because it persists in a policy of “bailing out the banks”. I find it difficult even to imagine how, given EU constraints as currently imposed, it is possible to refuse to recapitalise the banks without in effect causing a collapse of the banking system.
The present administration has inherited a disaster caused by the September 2008 guarantee. It is now faced with a refusal of the EU to contemplate our taking necessary and adequate measures to redress the situation despite the fact that the EU has accepted that these will be introduced, but only when it will be too late to deal with the Irish crisis.
The parties in Government may have been naively optimistic during the election campaign about what could be achieved, even though what they sought was what is needed. However, right now they have something like an economic equivalent of Sophie’s Choice: Frankfurt’s way or look for support somewhere else. Cragg and Stiglitz may well be proved right about the potential disaster involved in following the diktats from the IMF and the EU, but no one has suggested a feasible way for the Government to ignore the diktats without precipitating an immediate economic collapse. – Yours, etc,
Madam, – After reading “EU-IMF deal is a noose that will strangle economic recovery” by Michael Cragg and Joseph Stiglitz (Opinion, April 9th), I am finally convinced. We can no longer pour good money after bad and maintain the crazy course of saving the banks with loans that will cripple the economic life of the country. It’s time for the lenders to bear their share. Politicians please take note – there are other options. – Yours, etc,