In an exclusive interview with the Wiener Zeitung, Terrence McDonough, an economist based at the University of Galway, Ireland, says the EU Fiscal Pact is anti-democratic, is a straitjacket put over politicians dis enabling them to react properly against the economic depression, thereby worsening the situation. McDonough is an activist for the “no” camp in the Irish referendum.
He says that the Irish government’s argument that if Ireland rejected the Pact, it would no longer receive any money from “Europe”, is a scarecrow campaign not based on facts. Ireland would still get money, he is convinced, for example because neither the EU nor the IMF in their own interest want a domino effect to emerge from a worsening of the Irish situation. Ireland’s government could also raise taxes, and negotiate a debt restructuring with the creditors. The best solution of all would be a state default, however, Mc Donough argues, adding that what Ireland should have done long ago instead of pursuing the pro-austerity course, is the separation of the good assets from the banks, reorganizing them in a state-run “Good Bank,” leaving the banks alone with their bad assets instead of bailing them out.