Mark Carney: belief

Transcript context

…As an Irish citizen, what should the Irish government have done in 2008? Irish austerity is much criticized, but it does seem they ran out of money. What could they have done better? They ran out of money; what could they have done better? I think, broadly, they handled a terrible situation well. We worked closely with, funnily enough — well, not funny, but Canada and Ireland are in the same constituency in the IMF, and we worked closely with them during the crisis, including with determining how and when to support their financial institutions. And how that support ranked in terms of the overall — it sounds like an esoteric point, but it’s an important point in terms of the overall debts of the country — that, in other words, that support was junior as opposed to pari passu and, I think that contributed to their recovery. Now, as you know, Mario Draghi, who was a central banker — he’s now running Italy for at least some while. He’s put forward a plan to have a very aggressive fiscal policy, spending about 200 billion dollars, euros, whatever. From my great distance, it seems to me Italy’s problem is not mainly one of demand. It’s been running on for 25 years. It’s a real problem often resulting from local or even municipal rigidities. If that’s the case, why would spending 200 billion, when debt levels are quite high already, why would that help? What do you think?…

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