Louise Hannon (louisehannon1) wrote,
Louise Hannon

IMF Loans may not be managable

I've been watching how this bailout is unfolding. A number of economists think that we cannot repay the loans we are now taking on. Some think the way out is to make bondholders into shareholders and stop repaying all this interest. I would run with that one. What this country will become is one huge debt servicing agency.. In any case it will be at least ten years before we emerge from this mess and a generation of our best children will be gone and that is the tragedy of the worse government mismanagement in the history of this state.



Louise Hannon

One question….will the interest and capital repayments on all this not drag us down further and be impossible to cover?

on November 22, 2010 at 4:51 pm | Reply

It’s a good question – I think we have arrived at the point where we need consider if the burdens we are facing are “manageable”. Clearly at some point the costs won’t be manageable and when we get to that point, if not before, we need consider default. Once we take the bailout from the EFSF/EFSM and inject most into the banks then we explicitly make this a sovereign debt issue – yes, you could argue that the bank guarantee puts us in that position anyway, but I would still argue we can undo the bank guarantee.

But yes, the debt and interest will be crippling but whether it is still manageable is another question.

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