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Ireland needs a debt write down not longer loan terms

18 June, 2012 - by Pearse Doherty TD

Responding to news reports that the Troika is considering extending the maturities of its loans to Ireland under the current bailout programme Sinn Féin Finance spokesperson Pearse Doherty said “while any progress in dealing with the state’s unsustainable debt would be welcome it is clear that Ireland needs a debt write down rather than longer Troika loan terms.”

Deputy Doherty said:

“Today’s news report that the Troika is considering offering the Irish Government longer maturities on their emergency programme loans is an admission of failure. It implies, as Sinn Féin has been saying for some time, that Ireland will not be able to re-enter the sovereign bond markets in 2014.

“The reason for this is very clear – the state’s debt is unsustainable.

“Any progress on reducing this debt burden would be welcome. Whether extending the maturities on the Troika loans would achieve this is not yet clear. Would such a move mean the tax payer would still have to pay the toxic banking debt in full? Would the cost of servicing these loans be higher or lower?

“On the basis of the limited information available to us it would appear that the answer to these two questions is yes. If this is not the case the Troika and the government must make that clear.

“Unfortunately neither the government nor the Troika are addressing the real issue. Our debt burden is too high. Return to the sovereign bond markets will only happen if that debt is written down.

“We need a deal on the promissory note in which the debt is taken off the shoulders of the taxpayer and the state. This would do more to assist the government regain access to the sovereign bond markets than extending the maturities of current Troika loans. Unfortunately the Minister of Finance continues to rule this open out.”


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