Don’t despair over the Irish economy, says The Economist

Worth noting the latest pronouncements on the condition of Ireland by those organs of high international prestige the Economist and the Financial Times. Contrary to what that curious mish-mash of a new website Irelandcentral

states, the Economist doesn’t claim that the “Irish economy is dead” Indeed it’s good to note that both journals are quite optimistic, in contrast to so much cynicism and rage at home. From the Economist. ( Economist and FT quotes below the fold).

It is easy now to dismiss the rise in living standards in the “Celtic Tiger” years as illusory, particularly as Ireland enjoyed house-price and credit booms that were big even by British standards. But to focus on the bursting of the housing bubble would be to miss the lasting gains that were made..
One big concern is the cost of the state’s guarantee of bank debts, hurriedly given last September. ….Even on gloomier assessments, the cost ought to be manageable, as Ireland’s public debt was low to start with.

The Economist sees an emergency budget early next week as a landmark that will help to clear the air of some of the worst prophecies of doom.
Ireland seeks salvation in lower wages, even though its households are also heavily indebted. Whereas many countries want to lift their economies by fiscal expansion, Ireland is tightening its budget. Few other countries face such big deficits. The Irish hope for a payoff in improved confidence among foreign investors and at home. Consumers are aware of the gap in the budget and know tax rises are coming, says Alan Barrett at ESRI, a research institute. Spending may even pick up if the uncertainty over taxes is ended.

For St Patrick’s week, ( if I may call it that), FT columnist Matthew Engel has been out and about on the south Armagh border and has actually managed to avoid the hackneyed phrase “bandit country”. He notes the dramatically different character of the new economic and political border, despite the formal end of the Troubles and the impact of the EU Single Market. Engels rightly deplores the latest lamentable plans for a Fortress Britain against more far-flung forms of terrorism.

Fortress Britain will depend entirely on the goodwill of the Irish government, whose policies are constrained by those of its powerful and increasingly eccentric neighbour. the Irish checks seem, if anything, even more zealous than the British ones.

Both new types of frontier may prove transitory.

Exchange rates go up as well as down; in a year or two the traffic might be the other way. As long as Ireland is divided, life on the edge will involve looking for an edge, legal or illegal. And Britain’s attempts to block itself off from an increasingly interdependent world will be fraught, if not doomed.

As I stood by the memorial to the hunger strikers, I reflected that, had he lived, Bobby Sands would now be in his mid-fifties. He might now have been applauding Ireland’s latest murderers. He might easily have been driving up from the “Irish Socialist Republic” with his children or grandchildren, seeking bargains at Debenhams.

Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London