The Government should show leadership and host a European debt conference to look at solutions to the burden of debt both in Ireland and in Europe, a press conference has heard.
Independent TD Catherine Murphy has tabled a Private Members’ Motion which will be debated in the Dáil on Tuesday and Wednesday nights.
Launching the motion on Tuesday morning, Ms Murphy said a debate was needed as the dynamic in Europe had changed following the Greek election.
The new Greek government has also called for a debt conference.
“We are all aware of the impact a debt burden has; the problems it causes including the lack of fiscal expansion and the lack of investment,” Ms Murphy said.
"What the private members' business is looking for tonight is for the Government to endorse the call for a debt conference. There has been a similar conference in the past with the London Debt Agreement of 1953 to which Germany owes its position as the powerhouse of Europe and I think the very fact that you can point to that as a model that worked is something we need to take note of," she said.
Brian Lucey, professor of finance at Trinity College Dublin, said a debt conference was a "political, social and economic no brainer" because you "cannot dig yourself out of a hole."
He said it would be a good opportunity for Ireland to take the lead having shown that “we will take almost any medicine up to a certain point”.
“My view is that ecnomially it makes sense to have a debt conference. That debt conference can come up with something like the London write-off. Or it can come up with something like the Brady bonds initiatives of the 1980s... There are many many methods out there by which everybody’s face can be saved,” he said.
He said the argument for a debt conference was one that had been supported by a very large number of people across the economic and political spectrum. Should a conference be hosted, he said, it would need to include, not just European countries, but Russia, Israel, the US, IMF, World Bank and a whole "alphabet soup" of organisations.
“It’s a big group and if it doesn’t come up with anything it doesn’t come up with anything. It really isn’t going to cost the Irish government a huge amount of money to host this for a couple of days at Farmleigh”.
Michael Taft, research officer with the Unite trade union said a debt conference would not be about reducing anyone's debt.
“If you look at the 1953 London agreement it was a very creative proposal. [It said] Germany had to pay back a lot of their debt but they only had to pay it out of their trade surplus and only up to 3 per cent of their export earnings.
“It meant that the creditors had an incentive to import German goods which grew the German economy which in turn grew the European economy in the 1950s… In other words they linked the repayment of debt with growth at no cost to taxpayers.”
He said the conference would help create a new type of dynamic in European economic policy and would allow a return to the founding principles of European solidarity and convergence between the high and low income countries.
