Dr. Donal Donovan:

I will respond to Deputy Doherty, and if you do not mind, Chairman, I will make one or two comments about the remarks of Mr. Mody. He was part of the troika mission. He was not the head of mission; that was Mr. Chopra. I wish to correct that point for the record. He was one of a team of ten. When Mr. Mody retired from the IMF about six months ago, he gave an interview, which is slightly unusual because civil servants typically do not in general discuss all of the details of the decisions that were taken which involved ultimately political decisions by the head of the IMF, subject to the board of the IMF, which is itself a politically appointed board. In my experience that is a little bit unusual anywhere. That is one point.

Looking at the substance of what was said, Mr. Mody said that there were three options as he described it. The first was to burn senior bondholders, the second was the provision of long-term concessional assistance and the third was austerity. The way it came across was that it was all austerity and that austerity was a bad thing. We know about the bondholder story. There were debates at the time of the bailout and we know it was the intervention of the United States in the form of the US Treasury Secretary, not the ECB, who decided for good or bad, taking into account worldwide considerations. I am not trying to say it was right or wrong. That was decided by the IMF not to be an option.

I am a little puzzled by the second option because in November 2010 I do not think anybody was offering this country long-term concessional assistance. It certainly was not the IMF because it does not offer long-term concessional assistance to any country except the poorest countries in Africa. We are not and hope not to be in a situation such as Mali, which is the type of country that receives long-term concessional assistance. I do not think Chancellor Merkel and German taxpayers were willing to provide this country with long-term concessional assistance in November 2010. I found it a little odd that this option was suggested because I do not see it as an option and I certainly was not around at the time. Given those two options, such as they were, then one was left with austerity.