benoit cœure : interview in the irish times interview with mr benoit cœure, member of the executive board of the european central bank, in the irish times, conducted by mr arthur beesley on 12 january, published on 16 january 2015. * * * how deep is the recovery in ireland and to what extent can we be sure that this kind of very positive growth is going to continue? ireland has a potential to be the fastest growing euro zone country in 2015. that ’ s clearly a recognition of the success of the adjustment programme... this has been done by the irish people and they have paid the price so it shows that this now comes with a reward, that it was worth it. does it mean that everything is done and that ireland is on the safe side? well i hope so. i wish the best for the irish economy but there are still some challenging areas, like obviously the labour market is still adjusting, youth unemployment is very high, which in most european countries is an issue. that ’ s an issue that ireland faces. it ’ s being addressed but it ’ s not done. it ’ s not over yet. i would also flag banking sector issues, in particular the high level of non - performing loans which remain to be addressed, i guess what i ’ m saying is consistent with what the central bank of ireland says anyway. but i would certainly encourage banks to be very forthcoming in addressing non - performing loans, in using their buffers to accept losses when they restructure loans and i would also encourage borrowers and lenders to engage directly, not waiting to go to court to settle. the more forthcoming collectively borrowers and the lenders can be in addressing non - performing loans, the faster the banking sector will restart and the more they can create room on their balance sheet to extend new loans to the economy because that is what the economy needs. the economy needs fresh money. for that you need to reset the system. one last observation to make is on the fiscal side. a lot has been done obviously, but when the economy bounces back in any country there is always a risk of being over - optimistic and of spending money that is not yet there. i ’ m not saying that this is what is being done but i certainly think the government should guard against this risk of spending money that has not come yet. they should err on the side of caution given the level of debt, which remains high. do you have any concern about

totally different discussion, in terms of size. we are talking of bailing in or not bailing in senior bondholders which would have been in the order of €3 billion or €4 billion, when in late 2011, the issue of burden sharing of senior debt issued by anglo irish bank was on the programme ’ s agenda. you can compare this figure to the total ecb and central bank of ireland lending – eurosystem lending, all in all. at the moment when the programme started, in november 2010, this was in the region of €140 billion if i ’ m right, which is 85 per cent of irish gdp and which was one - fourth of all eurosystem lending, given that the capital key of ireland in the ecb is 1 per cent. you should also bear in mind that in late 2011, the irish government was in the process of undertaking a very significant recapitalisation of irish banks to an amount of around ¤24bn, or approximately 14 % of gdp. had confidence been shaken by the bail - in, more money could have been required for recapitalisation, ultimately impinging on the irish taxpayer. so these are the numbers. so we are talking of something which would have been limited in size anyway and which would have come on top of something which has been decided. – the bailing in of junior bondholders, which took place, was also significantly larger, €14 billion i would say. we are talking of something which would not have made a difference in terms of programme funding... i say at the time because you have to judge the discussion based on the information and based on the constraints that were there at the time, right? you cannot revisit the past and the environment has changed. i ’ ll tell you why. at the time, the situation was that there was international and european consensus that the senior bondholders in a restructuring should not be bailed in at european level. this had been said at g20 level, if i ’ m not wrong, and there were significant – or very elevated – financial stability concerns related to contagion, not only within ireland but also throughout the euro zone generally. i was not there. i ’ m just explaining the arguments. the issue was to weigh the potential benefits of adding €3 billion – €4 billion or decreasing the burden by €3 billion – €4 billion or shifting €3 billion – €4 billion to one particular stakeholder, which were