Sir, – Central Bank Governor Patrick Honohan (Opinion, September 10th) cites the experience of Britain in 1945 to claim that calls for the writing down of debt are naive and even counterproductive, generating as they do “a self-destructive policy of ignoring available opportunities to defer and spread out debt repayments”.
The obvious lesson for Ireland that Mr Honohan draws is to pay the debt in full but perhaps over a longer time period (as with the promissory note arrangement agreed earlier this year). Yet, only eight years after 1945, the 1953 London Debt Accord cancelled much of Germany’s pre- and post-war debts. The accord was signed by countries that had been at war only a few years previously, including the highly indebted new German Federal Republic (the successor to Hitler’s regime) and Germany’s creditors, led by Britain, France and the US, but also including countries such as Greece that had recently experienced German military occupation.
Far from being a utopian aspiration, the write-down of debt has historically proven to be both feasible and effective, as many other examples would attest. The fact that Britain did not get a write-down of its own debt in 1945 does not prove otherwise. – Yours, etc,
ANDY STOREY,
Arklow Street, Dublin 7.