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Dublin: 8°C Wednesday 28 October 2020

Ireland 'should be praying for a second bailout', DCU economist warns

Tony Foley said only borrowing more billions from the EFSF would save Ireland from paying punitive interest rates on financial markets.

IMF official Ajai Chopra arrives at the Central Bank in November 2010
IMF official Ajai Chopra arrives at the Central Bank in November 2010
Image: Peter Morrison/AP/Press Association Images

IRELAND IS LIKELY to require a second bailout – and we “should be praying” that the EU and IMF are willing to arrange one, a senior economist at Dublin City University has said.

Tony Foley said the current Government proposal was for Ireland to borrow around €12billion on international financial markets in 2013 – but warned the country would likely end up paying crippling interest rates.

It would be far preferable to arrange a second bailout from the European Financial Stability Fund, he told RTÉ’s Morning Ireland, saying:

The country will owe €206billion in total by 2015, and be paying around €10billion in interest alone every year [...] We should be praying for a second bailout, because it will be a much better deal than going into the markets.

Foley, a senior lecturer and head of the economics group at DCU Business School, was commenting on a warning made yesterday by Citigroup economist Willem Buiter that Ireland should negotiate a ‘standby’ second bailout  in case we are unable to return to the markets.

Backing Buiter’s analysis, he said the international lending climate was now far worse than when we received the first bailout.

More: Ireland should negotiate ‘standby second bailout’, says Citi chief>

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Michael Freeman

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