Ireland should learn from the examples of third world and developing countries and default on bank debt, development agency Afri (Action from Ireland) has said.
Irish bank debt should be cancelled on the grounds that it is unjust and unsustainable, and the EU IMF bail-out deal should be renegotiated Afri chairman Andy Storey said.
The Government was acting as debt collectors for foreign banks, he said.
"These debts were not incurred to run Irish public services but by private speculators chasing a quick buck - why should ordinary Irish citizens now pick up that tab?"
Rather than turning around the economies of the third world or "global south" IMF intervention had had a "pernicious impact". It has increased poverty and social inequality and reduced spending on education and the social sector in countries such as Mali and Zambia, Dr Storey said.
In contrast Argentina, which resisted IMF prescriptions when it partially defaulted on its debt in the early 2000s, boosted its economic recovery as a result.
By allowing the IMF to determine economic policy, the Government had "foreclosed on Ireland's democracy," he said. The IMF agreement had locked Ireland into a "fixed solution" denying the Irish people the right to chose economic policy regardless of who they elected.
Afri rejected suggestions that Ireland would be punished by the financial markets in the event of a bank default. The markets were currently punishing Ireland through high interest rates because it was clear they saw attempts to repay the debt as futile and unsustainable, Dr Storey said.
"Drawing a clear line between the portion of the debt that guarantees the bank bondholders, and which should not be paid, and that portion that is the Government's own debt would actually serve to calm the markets, and allow Ireland borrow the money necessary to cover government running costs at a reasonable rate of interest."
Irish debt would still end up being restructured at the end of the 'bail out' period - but by then, the private institutions will have "gotten off the hook" to a significant extent and the write-downs would be largely borne by the public sector, he said.
"Irish people need to insist that they can't pay, won't pay – and shouldn't pay. This should be our new year's resolution."
Dr Storey accepted that the current Government was unlikely to listen to Afri, but he said: "Labour has made noises that bond holders should share the pain."
Afri would continue throughout the new year to lobby for political leaders to closely examine the IMF experience in the global south and considering the merits of defaulting on bank debts.
"It is imperative that the option of Ireland defaulting on bank debt be exercised on the grounds of both justice and economic sustainability."