Saturday 19 January 2019

Irish default not on, says Trichet

THE EUROPEAN Central Bank (ECB) has rejected suggestions that Ireland and Greece would be allowed to partly default in order to ease the debt burden.

The bank's chief, Jean-Claude Trichet, said the terms of the EU-IMF bailout plan for the State have been approved by "the entire world".

Mr Trichet said the requirement on the Irish authorities to "apply the programme" as agreed has not changed.

He said the Irish rescue plan and that of Greece did "not comprehend" the notion of bondholders being compelled to take a "haircut" on their investments.

"My message (for Greece and Ireland) is apply the programme, that programme does not comprehend the kind of concept you have mentioned," Mr Trichet said when he was pressed on the subject.

Some economists have argued that both countries will never be able to pay back their creditors and have suggested 'haircuts' -- which would see investors receive only a fraction of what they are owed.

But Mr Trichet reiterated that such an option is not contemplated in the austerity programmes Greece and Ireland negotiated in return for their EU-IMF loans.

"The message is very simple -- apply the programme, as is being done all over the world in many, many, many numerous cases. It is the message we have for the Greek government. In Ireland, it's exactly the same," he said.

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