An economist has said Ireland's economic and financial problems are 'acute but solvable', and that they are best solved without outside help.
Charles Dumas of UK-based economic research group Lombard Street was speaking to members of the American Chamber of Commerce in Dublin today.
Mr Dumas said Ireland has two advantages in tackling its current problems, saying government debt was 'negligible' at the end of last year, while Ireland also had much higher incomes than Germany, France or the UK. As a result, he said, Ireland had room to manoeuvre.
The economist said he favoured temporary nationalisation of the banks rather than the establishment of a 'bad bank', in the form of the National Asset Management Agency. He said nationalisation allowed speed and the inclusion of all bad loans, plus the skilled staff to deal with them.
Mr Dumas argued that NAMA, by taking over all property and construction loans, would effectively reduce the banks to shells. He added that, to function effectively, it would require stripping out the relevant staff from the banks to run NAMA.
American Chamber president Dr Paul Duffy said Ireland's international reputation hinged on implementing the right solution in the financial sector. 'If the Government has decided that NAMA is the best solution, it is critical that NAMA is implemented quickly and successfully and that the government acts quickly to restore stability quickly to public finances,' he added.
