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Follow either Greece or Iceland

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Greece has now signed up for a second bailout accompanied by massive haircuts for bondholders, Given that its projected Debt/GDP ratio might decline - with luck - from 160 percent to 129 percent by 2020, a third bailout or even deeper crisis seems inevitable.

Many commentators expect that Ireland, in the absence of a general economic upturn, will also require a second bailout given that our Debt/GNP ratio, which excludes multi-national profits, currently exceeds140 percent.

It is high time to start thinking outside the box and to do a deal with the Devil, i.e. get the more realistic and enlightened IMF to underwrite fully any possible second bailout, instead of relying on the restrictive European Stability Mechanism.

On the foot of this, new terms should be imposed on bondholders and promissory notes, thereby easing the task of sorting out the self-inflicted domestic deficit.

Based on Iceland's rapid recovery from its crisis, we could transform that derogatory phrase -  "The difference between Iceland and Ireland is one letter and six months" - into something much more positive. The alternative seems to be death by a thousand cuts, like Greece, with no certainty of recovery.

Letter published in the Sunday Business Post on 5th March 2012.

Referendum on European treaty

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For me, a decision to vote yes in the forthcoming referendum will hinge on the willingness of the EU and ECB to assume responsibility for the cost of bailing out Anglo. I appreciate that if Ireland votes No, we will be denied access to the restrictive European Stability Mechanism in the highly likely event that a second bailout  is needed.

To address this, the country should turn directly to the more realistic and enlightened IMF and, with its support, impose tough new conditions on the promissory notes and get on with the task of sorting out the self-inflicted domestic deficit.

Letter published in the Irish Times on Friday 3rd March 2012.

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