Bank of Ireland on College Green, Dublin

In a strongly worded editorial The New York Times has called for European leaders to allow Ireland to renegotiate its debt.

The Times says the European deal was far too strict on Ireland.

“The European Union provided bailout money last fall, but with austerity conditions so strict and interest rates so high that Ireland has been left with no realistic prospects for resuming growth and paying off its debts.

The consequence of the debt was that “the bankers emerged nearly whole. Ireland emerged nearly broken.” The Times said.

The editorial pointed out that; “too much austerity too soon can trap an economy in a vicious downward spiral of decline.... Shrinking economies cannot shrink their ratios of debt to output. Only recovery programs premised on renewed growth can do that.”

Ireland is in deep difficulty as a result The Times notes.

“Ireland’s debts are so large, and its interest rates so high, that it now needs 5 percent annual growth just to stay afloat. Because of the harsh austerity budgets Europe has demanded, it is generating no growth at all.”

The Times says Germany must rethink “Creditor nations like Germany insist there can be no renegotiation. They need to think again.”

The editorial called for “a negotiated debt rescheduling and an explicit link between deficit reduction timetables and the return of economic growth. There is no more time to delay.” it concludes.