Posts Tagged ‘ Debt forgiveness ’

Austerity Was A Mistake Says Former IMF Mission Chief

File:Protest against bailout of Anglo Irish Bank.jpg

A reliance on austerity as a measure of combating the economic downturn is actually counter-productive, said Professor Ashoka Mody, a former International Monetary Fund (IMF) mission chief for Germany and Ireland.

Speaking on RTE’s Morning Ireland, Professor Mody said that the Troika had other options besides the imposition of austerity, and added that the bondholders could have been forced to bear some of the burden. “We are seeing a belated recognition of the fact that the constraint imposed only by austerity was untenable,” he said on the programme. “Clearly the experience, if experience was needed, has demonstrated that reliance on austerity is counterproductive.” The option of burning the bondholders wasn’t considered at the time, because the government was concerned about causing further financial instability.

Continue reading