Central Bank Governor Patrick Honohan has stated in a recent publication that the country’s critics are failing to recognise the dynamism of Irish Exports as the country returns to a current account surplus or the revolution in public accounts as taxation reform kicks in.

 

In his most recent interview Professor Honohan stated “That Irish taxation revenues are undershooting a little but there in no cause for concern. The net cost to the Irish State of recapitalising the banks is € 25 billion or 15-16% of Irish Gross Domestic Product”

 

He also stated the premium investors demand to hold Irish 10 year bonds over German bonds as “ ridiculous” and a “ setback after such budgetary reforms.

 

Spreads on Irish 10 year bonds reached 2.97 percentage points over German Bonds yesterday amid reports the European Central Bank in intervening to shore up Irish debt, a reversal of the banks plans to withdraw emergency support. The rise in spreads come after higher costs to support Anglo Irish Bank were revealed earlier this week , when the European Commission said it recently approved Government support worth € 24.3 billion for the bank.

 

Professor Honohan closed his publication by stating that Ireland is not a risk of being pushed into a deflationary spiral by the discipline of European Monetary Union membership.