Here‘s an article I wrote for Business and Finance on the question of whether Ireland’s fiscal debt is sustainable.
One correction I’d add to the article is that I miscalculated the average interest rate on existing Irish debt and reported it in the article as about 3 percent. The correct figure, as calculated by the EU Commission, is 4.6%.
Gary O’Callaghan has an interesting article in today’s Irish Independent on the ECB’s role in the Irish crisis.
Via FT Alphaville, here‘s a draft copy of Portugal’s “Memorandum of Understanding on Specific Economic Policy Conditionality.”
As promised a few weeks ago, here is a link to the video of EUI’s workshop “Life in the Eurozone With or Without Sovereign Default?” held a few weeks ago. All of the presentations were interesting but I’d particularly recommend Martin Hellwig’s presentation in part 2 and sovereign debt lawyers Mitu Gulati and Lee Buchheit’s presentations in part 3. Unfortunately, there doesn’t seem to be video of Charles Calomiris’s thought-provoking presentation but his slides (and the other presentations) can be found by clicking on the links here.
As stories about a Greek sovereign debt restructuring gather pace, expect to read lots more stories like this one in which some guy claims that a Greek restructuring would “severely damage the banking systems of Ireland and Portugal.”
Let’s be clear. It won’t. We’ve been here before with people quoting figures from the BIS on Irish exposure to Greek debt that stemmed from holdings of foreign-owned banks in the IFSC. However, even the BIS figures now show “Irish” bank exposure to Greek debt has collapsed to below $1 billion (you can find a time series in here if you look hard enough.) God knows there’s enough to worry about in relation to the Irish economy and its banks, so let’s at least try to put this one to rest.