Debt restructuring would be suicide for Ireland: Fin Min

DUBLIN (BestGrowthStock) – Ireland can withstand steep fiscal cuts and has ruled out entirely restructuring its sovereign debt, Finance Minister Brian Lenihan said on Thursday.

Lenihan earlier said he would push through spending cuts and tax hikes worth 6 billion euros next year, the toughest budget in the country’s history, in a last-ditch effort to convince investors it is not on the verge of financial meltdown.

“A country that decides on a policy of bond default needs its head examined,” Lenihan told the Today FM radio station when asked whether Ireland should restructure both senior bank debt and government debt.

“You’ve already seen a drastic market reaction to the limited policy of discounting subordinated bonds. You’re now suggesting we should extend that policy to all our debts and I’m telling you that that’s a suicide note for Ireland.”

Lenihan also blamed Germany’s suggestion for a sovereign debt restructuring mechanism as part of the reason for the blow out in Ireland’s borrowing costs this week.

(Reporting by Carmel Crimmins and Padraic Halpin)

Debt restructuring would be suicide for Ireland: Fin Min