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Austerity was wrong option for Republic of Ireland, says former IMF chief

By Ailish O'Hora

Published 12/04/2013

A former International Monetary Fund (IMF) chief has admitted that austerity alone as a way of solving the Republic of Ireland's economic crisis was a mistake and is counter-productive.

Ashoka Mody, former IMF chief of mission to Ireland, also said that bondholders should have been burned, while a sovereign default would also have been manageable.

But Taoiseach Enda Kenny responded tersely, saying: "Hindsight is a wonderful thing."

Mr Mody's comments come as eurozone finance ministers are in Dublin for an informal meeting this weekend, where it is understood longer repayment terms for our bailout loans will be discussed.

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