"Ireland is not Greece"

Speaking in Luxembourg on 4 October 2011, Michael Noonan insisted that “Ireland is not Greece.” Now, in April 2014, the graph below by David McWilliams proves that Noonan was correct—to the detriment of us all.

The fact that the Greeks can raise money shows that the markets have absolutely no memory. Two years after the biggest sovereign default in history they are back at it—though it should be noted that their balance sheet is immeasurably better after the default than before.

Greece’s debt is still almost 180 per cent of GDP. But the bulk of the debt is owed to other

euro-zone governments, as a result of its two “bail-outs.” Not only do these loans pay a low interest rate of a little over 2 per cent, but Greece doesn’t need to begin repaying them until 2022, and then it has another twenty years to complete the job.

Greece shows just how quickly things can turn about. Note also that its ten-year bond yield, which hit 30 per cent after the debt default two years ago, is now 6.2 per cent.

Two of the country’s big four banks— Piraeus and Alpha—have raised €3 billion of equity between them in recent weeks, and Eurobank, another big lender, is planning to follow with a €3 billion issue later this month.

So it was just more bragging from Noonan when we should have been planning to emulate the Greeks, if not surpass them, by repudiating the debt. Instead we have water charges, another austerity budget ... and so on.

Doesn’t it make your blood boil?