Bondholders and a legacy of debt
Sir, – Stephen Collins writes that Peter Sutherland “supported Lenihan in countering the array of forces who urged default on the national debt and defiance of the European Central Bank” (“Sutherland never quite got recognition at home he deserved”, Opinion & Analysis, January 11th).
Of course no-one suggested defaulting on the national debt. However, Ireland could have refused to make its taxpayers cover €64 billion of private speculative debt incurred by European banks, the route taken by Iceland, whose economy has now recovered. The Irish economy has also recovered but with the second highest per capita debt (after Japan) in the developed world, thanks partly to the burden of repaying speculative debt. The “correctness of that approach” is far from “self-evident”. Stephen Collins also claims that Peter Sutherland “used his extensive international connections to argue Ireland’s case”. However, the Irish taxpayer still had to shoulder 10 times the German citizen’s share of private banking debt, and this country was excluded from the new burden-sharing arrangements brought in by the EU. How much worse could the outcome have been?
Stephen Collins also praises Peter Sutherland’s performance as head of the World Trade Organisation and a promoter of globalisation, which he credits with “spreading wealth more equally”.
In fact as recent Oxfam reports show, global and sectoral inequality are rising rapidly due to globalisation.
In Ireland, the share of labour in national income is falling and is at the bottom of our peer group in the EU. – Yours, etc,