Professor Patrick Honohan:

The path of adjustment, to which the Government has committed itself and has maintained up to now, is the best chance of not only getting the debt under control - it is coming under control and this should be the peak year - but also for getting to a growth path when people understand that the adjustment has been concluded. That is why I am not in favour of postponing this adjustment. Getting to the end of this adjustment as fast as possible will mean that confidence can return domestically, people can see light at the end of the tunnel, and the growth can come back. The combination of discipline and growth is what will assure lenders and everybody else that things are under control.

I listened to Ashoka Mody, who is a good friend, and I agree with much of what he says. The only difference is that my view is that we should get the adjustment over with as soon as possible in order that we can get that upturn, whereas he is saying that perhaps we can get the upturn without the adjustment, and I do not think that would work as well.