Ireland

Next time you hear a Labour politician arguing that the markets are punishing Ireland despite its austerity drive (and therefore Britain should not rush to cut its own deficit) you might kindly point out that, because of the horrors at Anglo Irish and elsewhere, you can certainly argue that there hasn’t actually been an Irish austerity drive: In a statement, Mr. Lenihan conceded that the bank bailout would have an immediate and dire effect on Ireland’s budget deficit, pushing it up to an extraordinary 32 percent of G.D.P. Taking out the bank costs, Ireland’s deficit is expected to be around 11 percent, despite two years of an austerity drive. The

Thursday is an important day for Ireland and, in the end, another reminder that Ireland’s economic woes and the measures taken to alleviate them don’t offer much of an example for other countries or their governments. The Irish government is going to have to announce its plan for bailing out (or not) Anglo Irish Bank’s bondholders. None of the options – outlined by the FT here – seem attractive. The political cost of meeting the bond market’s hopes will be severe; the economic cost of not doing so could be equally horrendous. Robert Peston has a good post explaining just why the Irish economic elite is so out of touch

As Iain Martin notes, it didn’t take Labour long to welcome the news that the Irish economy shrank by 1.2% last quarter*. Welcome isn’t quite how they put it but since Irish economic pain is a weapon with which the opposition can attack the coalition, Irish misery is a price worth paying so Ed Balls can feel vindicated. At least those who think fiscal restraint is needed at times such as these and who were perhaps too quick to welcome last quarter’s healthy growth in Ireland can say they want to see Ireland do well. In truth, both sides of the British (and for that matter American) debate are too

Paul Krugman is back banging a familiar drum: austerity is not a good idea. Anywhere. As always, Ireland is one of his favourite examples: [V]irtuous Ireland never did better than malingering Spain. And now, Ireland’s risk premium has exploded, here; Spain’s not so much, here. Of course, it’s not at all a clean experiment; Ireland’s banks were arguably second only to Iceland’s in their irresponsibility, and the Irish government’s blanket guarantee has exposed it to huge losses. But bear in mind that when Ireland seemed, briefly, to have regained the trust of the markets, this was touted as proof that austerity will be rewarded. Funny about that. As always, I’m

A follow-up to this post on the Irish economy: our friends on the Emerald Isle are now officially out of recession. That’s good news. The bad news? Unemployment remains above 13% and, if you exclude multinational corporations, the “indigenous” economy (if you can call it that) still hasn’t recovered completely. The bleeding has slowed but the patient remains enfeebled. Nevertheless, overall the economy grew by 2.7% in Q1, assisted by the euro’s decline agaist the pound and dollar. It’s going to be some time before all is well but it’s certainly possible that Irish Austerity, painful as it may be, is not proving a terrible failure. Then again, Ireland is

So it seems you have to vote Conservative to accept the party’s invitation to join the government of Great Britain? Who knew? Tory warnings of the dire consequences of a hung parliament are understandable but, I suspect, unfortunate. There is little evidence that the electorate believes that a hung parliament will be a disaster, far less than they can be cajoled into thinking that they’re letting Britain down if they don’t vote Conservative. And that, my friends, is the underlying message sent by the Tories’ blitz against a hung parliament. A hung election might not be ideal but it might also be a fitting end to this exhausted, depressing parliament.