By staff reporter
Irish economist Morgan Kelly has told UCD students that if a swift ‘clean-up’ of Irish banks takes place, Ireland could be facing something ‘very, very horrible quite soon’.
The UCD economics professor warned that the proposed European Central Bank (ECB) “clean-up” of Irish banks could mean a host of small businesses across the country would be forced to close.
Prof Kelly said in the Q&A session last week that the Frankfurt-based ECB wanted to do a “trial run” on Ireland and take action against the banks’ distressed loans.
He said if there was a quick clean-up of remaining backs, the country could be facing something “very, very horrible quite soon”. He added that a big section of the Irish economy would be destroyed in one go.
Prof Kelly said Mario Draghi, the governor of the ECB and not the Government were behind the Irish economy’s recent recovery.
“The ECB has basically kept pumping that sweet, sweet credit into our veins and we haven’t had the real crisis yet,” he said.
See the full lecture below: