Seems like like yesterday that Ireland was in recession and losing jobs at the rate of one each and every five minutes. Now the Wall Street Journal reports the nation has officially exited the recession, depending upon export-driven domestic product growth of 2.7 percent for Q1 2010. But the overall consensus among experts is that Ireland has a long road to travel before they reach economic recovery. Entering 2010, Ireland had lost 14 percent off their GDP over two years, making them one of the hardest-hit euro zone countries. Prime Minister Brian Cowen is urging Ireland to be prepared for hard times for the next 10 to 15 years.
Ireland’s recession – Investor medicine needed
Ireland and its recession have continued largely as the country is paying much more on its benchmark bonds than more economically healthy euro zone countries, says the Times. This has given investors pause and has not reduced guaranteed loan borrowing, making it all the more difficult for Dublin to take care of business. Ireland’s primary goal is to restore investor confidence through deficit reduction, but higher taxes, lower salaries for public workers and also the fallout of the burst housing bubble – including an uptick within the origination of low cost loans – have made it difficult for Ireland’s population to wait patiently.
What can exports do for Ireland?
Ireland attracted companies like Intel, Microsoft, Facebook and LinkedIn to address previous recessionary woes, but this time, the Irish government is depending upon an export revival, as outlined by the Times. Wage and energy cost decreases – also as a falling euro – have “improved competitiveness,” writes the Times, but that might not create enough jobs. Lower wages are sending bright young graduates elsewhere. Graduates want fast cash, not promises of hard times before the dawn.
Irish elections may not go well for Cowen in 2012
Ireland will escape recession via touch economic choices, says the nation’s government. However, politics are often a “What have you done for me recently?” arena. Prime Minister Cowen, despite his promise that he will not cut public salaries further in Ireland’s next budget, is on the ropes after the haymaker of public opinion. The people can only take so much.
More information about this topic at these websites:
http://online.wsj.com/article/SB10001424052748703426004575338433422665358.html?mod=googlenews_wsj
http://www.nytimes.com/2010/06/29/business/global/29austerity.html?hp=&pagewanted=all
