Mr. Colm McCarthy:

I do not believe so. Debt write-down is a necessary condition. It is not sufficient. I will put it this way. Consider April and May in 2010, a time when the Greeks owed approximately 120% of GDP. It turned out to be a little more when the final figures were compiled, but everybody thought at the time that it was 115% to 120%. The Deputy will recall that it was the Papandreou government. The deficit was thought to be 10% of GDP that year, although it turned out to be a little higher as well if memory serves. In addition, and very importantly, the economy was in a nose dive. If one has a high debt and is running a high deficit, which means the debt is increasing, and the economy is sinking, that is debt unsustainability on any reasonable metric. That is why the first Greek deal was such a mistake.

Currently, there are people who are saying that the Greeks owe 180% of GDP, but the repayment terms have been stretched out, some of the loans are now 30 year loans and so forth. Some of the loans have the feature that the coupons do not have to be paid for the first five or six years, although some of the IMF loans are more up-front. Some people have been saying that Greek debt is not as bad as it looks because of favourable reprofiling and the other matters Professor Barry mentioned. That is fine. However, look at the Financial Timessupplement today and the page which shows what government debt is trading at in the secondary market. One should do that from time to time because everything else in the Financial Timesis some guy's opinion. The figures show what that debt traded at yesterday, which was an interest rate of 12.26%. That means Greece has unsustainable debts. There is not a large amount of Greek Government debt out there at present, but what is out there is trading at an interest rate which is way off the chart of anything that is conceivable. That is the bond market to which Greece is allegedly going to return.

I cannot repeat this often enough - the purpose of these financial rescues is to get the distressed country back to an ability to borrow at affordable rates of interest within two or three years. That is what those programmes are always designed to do.