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Former IMF deputy director credits Fianna Fail with design of crippling Irish bailout programme – Reilly

10 September, 2015

Sinn Féin Senator and Seanad Spokesperson on Finance Kathryn Reilly has stated that the evidence given to the banking inquiry by the former International Monetary Fund (IMF) deputy director Ajai Chopra outlines that it was the former Fianna Fail government who designed the crippling and harsh bailout plan for Ireland and not just the ECB.

Senator Reilly stated:

“It is apparent from Mr Chopra’s evidence today to the banking enquiry that the bailout plan put forward to the Troika was designed in the main by the Irish government. This dispels the narrative pushed by Fianna Fáil that they were strong armed into accepting this programme by the ECB. Indeed, Mr Chopra described the programmed as ambitious and had too much focus on structural reforms, more focus than he believed was necessary.

“It was stated that structural reforms were not part of the problem in Ireland and that structural reforms were never front and centre in his view as part of addressing this crisis. Therefore, it leaves the question as to why Fianna Fáil put forward this programme and why Fine Gael and Labour implemented such harsh structural reforms in an effort attain economic growth. What makes this even more frustrating is that it is madness to believe that an economy can cut its way to growth, it is impossible.

“It is self-evident that the bailout placed too much emphasis on supply side economics and not enough emphasis on growth-led policies. This was reinforced by the evidence today where Mr Chopra stated just that in reply to a question from Deputy Pearse Doherty. 

“As a result of the structural reform measures in the bailout, none of the growth targets outlined for Ireland were ever reached and the austerity measures implemented caused a double-dip recession which prolonged the crisis and caused economic growth to stagnate.

“From Mr Chopra’s evidence today, it is apparent that Fianna Fáil, in the main, designed the crippling bailout programme for Ireland which was signed up to and implemented by Fine Gael and Labour. This dispels the myth that the ECB pressured successive Irish governments into accepting a harsh bailout programme designed by the ECB.” 

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