Yes, Ireland can apply to the IMF for money, but…

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If you want proof that SF dropped the ball on the anti case last week by putting partial quotes from Karl Whelan and two other eminent economists, it’s the fact that they have lent their own authority to an economist who is way off base from their own anti Fiscal Compact position. On Morning Ireland this morning Whelan gently debunked the idea, arising from (though strictly speaking, not contained within) a Sunday Times’ story yesterday that Ireland would be able to apply to the IMF for funding if locked out of the ESM…

In passing he also notes that Ireland, inside the ESM, has already borrowed 15 times the normal IMF quota for borrowing (in extremes, they will normally stretch to five), something they’ve only done because of guarantees (and money) from the European Central Bank. If Ireland found itself locked out for any reason, in Whelan’s view, the only way the IMF would be persuaded to come in and pick up the pieces would be on foot of a default.

On the programme he also goes on to point out that Greece has changed everything (who’ve had major debt forgiveness, but only in exchange for ruinous slashing of public sector expenditure). In fact the critical change has not been inside Greece itself, but the fact that Greece can be allowed collapse without sending contagion back in to the rest of the Eurozone.

It’s possible that there’s a game of Chinese whispers going one, but the bigger prize at this stage of the game is to keep the Euro together, not to keep Ireland inside at any price.

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