The Irish government has been quick defuse any market concerns after a local economic doomsayer who predicted the recent financial crisis, professor Morgan Kelly, came out and said the nation was at risk of insolvency.
Writing in Saturday’s Irish Times , Prof Kelly, who originally predicted the crisis, said the open-ended guarantee of banks’ liabilities and the Nama bailout will leave the Republic with a “a worse ratio of debt to national income than the one that is sinking Greece” by 2012.
A department spokesman said yesterday that the academic’s analysis was extremely pessimistic and based on a number of very serious inaccuracies. He said that two weeks ago, Central Bank governor Patrick Honohan told the Small Firms’ Association the cost of getting the banks out of trouble was manageable and that most of them started the boom with a cushion of shareholders’ funds that would enable them to pay their debts from their own resources.
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