From Dr Louis Brennan.

Sir, Phillipe Legrain is correct (“Don’t blame the euro for Ireland’s mess”, Comment, November 18). Bondholders should bear losses and they should do so now.

Imagine foreign drug lords flooding Ireland with an addictive matter leaving indigenous junkies in such a dysfunctional state that their capacity to meet their liabilities to the drug lords is compromised. Would European and global institutions then demand that an already indebted Irish government seek loans to cover the full liabilities of these junkies to the drug lords? Hardly.

Yet this is effectively what the Irish government has now agreed to do in relation to Irish banks’ bondholders. The only sustainable solution to the current debt crisis is one that involves all those with a part in its making, contributing to its solution. However, by continuing to bow to the nihilism of reckless bondholders, and failing to require them to contribute to the solution, European and global institutions are simply ensuring that the debt crisis will not be contained. Consigning to history the farcically rigged system of complete indulgence for reckless lenders is a sine qua non for resolving the current debt crisis.

Louis Brennan,

Associate Professor and Research Associate, Institute for International Integration Studies,

School of Business, Trinity College,

Dublin, Ireland

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