Economist Morgan Kelly reveals in the Irish Times today that a deal last November to haircut approximately 30B Euro of Irish bank debt was sabotaged by financial terrorist Tim Geithner. The 20B Euro or so reduction in Irish bank debt entailed by the haircut would not, of course, have saved Ireland from sovereign default, but it would have been a symbolic victory and would have set a good precedent.
But Geithner and the ECB would have none of it. Kelly recounts a G-7 conference call in which Geithner struck down the deal to haircut bondholders.'
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