Debt breathing space but no salvation

The EU has agreed an extension for Ireland and Portugal to give them more time to repay their bailout loans. Meeting on March 5, the 27 finance ministers hailed their “successful steps” towards re-entering the markets.
Under the deal, the troika of the European Commission, European Central Bank and International Monetary Fund will agree a new repayment schedule for a significant chunk of Ireland’s €40bn in bailout loans that had been due to be repaid before 2016. However, for Irish Independent columnist David McWilliams, the deal is little more than a “gentleman’s default” designed to buy time. He warns –

The Irish economy may emerge from the bailout unreformed and weaker, unlike the original plan. [...] We can see that the EU needs a victory in Ireland because its entire "austerity works" strategy is based on Ireland squeezing itself out of the bailout next year. [...] All that has happened is the debt pack is reshuffled to avoid a principal default but the economy is not just fragile but less able to take on the challenges of the globalisation.
In a sense this might be the worst of all worlds – a fictitious victory based on kicking the debt problem out to future generations.