Dr. Donal Donovan:

The ESM agreement in July is a perfect example of something that was decided very late in the day or very early in the morning, to which not everybody subscribed, and which was written in a way that allowed everybody to go away with different interpretations of it, which they did starting the next morning. The same people are now interpreting this and it can be interpreted in different ways. One should be careful in interpreting communiqués with general statements signed at 4 a.m. because they mean different things to different people.

We have not modelled a specific number of a possible debt reduction in our work. One reason we did not do that is that we did not want to put out a number, say X, which could then be turned into the view that the council thinks that X is necessary or X will be or should be got. It is not too clear what we will get; we do not know that and nobody knows it.

The IMF was a little more brave than us, as one will note if one reads its last report, picked out as an illustrative scenario, as it called it, a €24 billion reduction in the debt, and it worked through the arithmetic of that. I do not recall the details but it is useful to have it. We did not do that although perhaps we should have but we decided not to.