There is bitterness over the EU-IMF loan rate of 5.8pc, which may be too high to allow Ireland to claw its way out of a debt trap. Interest payments will reach a quarter of total revenues by 2014. Moody's says the average trigger for default in recent history worldwide has been 22pc. "The interest bill is enormous. The whole process lacks feasibility," said Stephen Lewis, from Monument Securities.
Hmm. What is the current ratio of interest to revenue in the US? 8.5% (188/2213). When will the US ratio exceed 22%? Maybe 2022. According to the official projections, the ratio will be 20.7% in 2020 (912/4400), assuming a 4.1% interest rate on 91-day t-bills. If interest rates exceed this then the 22% will be reached much sooner.