‘An expert says’: Oh, really?

I must admit it was the headline on this one caught my eye… The core of the claim by Alan Aherne is that a No vote would adversely affect Ireland’s standing the international bond markets:

Addressing a gathering in Dublin of economists recommending a Yes vote, Dr Ahearne said the markets are “fairly confident” that Irish voters will vote in favour of the treaty on October 2nd. The opposite result would, therefore, automatically damage sentiment, leading to higher borrowing costs for the State and for banks, he told the Economists for Europe seminar.

I bounced it over to Stephen who came back with this one.. from Ciarán O’Hagan, a highly respected Bond Trader:

Ireland has already paid a tribute in voting No last year. I would not able to quantify it. But it was real.

I don’t think many investors would have dumped Irish government bonds on account of the No vote alone. The cost of borrowing did not of course jump dramatically on 13 June 2008.

The far bigger tribute was paid some months later, coming on top of a number of other significant negatives. The banks crisis (and its mishandling), along with the prospects of persistently wide budget deficits over the coming years, was of course the major culprit for the severe cheapening of Irish bonds.

  • RepublicanStones

    Just part of the scaremongering both sides are guilty of.

  • Jer

    I must say when I saw the bald statement – expert at the end of the title I viewed it with a jaded eye. When I saw it was Alan Aherne it cruelly thought to myself they could have ended with – govt. hack.

    He is a fine and learned economic but he is still a representative of the Govt. view and no lonfer independent.

    Is it too much to ask the irish times to avoid such amibiguity.

    Can the paper of record be an opinion paper at the same time?

  • fin

    all this rubbish about the cost of borrowing and triple A ratings (or not) is just rubbish.

    Money is a commodity, when its scarce the cost of borrowing goes up regardless of a borrowers status, when its plentiful the cost goes down.

  • It’s absolute rubbish what they are claiming. FDI in Ireland has actually increased since the no vote. Dan O’Brien and Jim Power largely subscribe to their analysis, and they were at the fore of predicting a ‘soft landing’ in the property market and the stock-market.

    On an annual basis, Irish industrial production for June 2009 was 4.3% higher than in June 2008, according to the CSO. Growth was dominated by the US-owned chemical sector. The Chemicals and Pharmaceuticals category was up 30.5% in year to June. The Irish Exporters Association’s half-year review reveals that merchandise exports showed a return to growth of just under 2 per cent, which the association called “a remarkable performance given the current economic climate”.The Irish recession is predominantly construction-based. That is the epicentre, and the aftershocks have effected other sectors of the economy but it has nothing to do with Lisbon and the resilience of FDI into Ireland attests to that fact. Indeed, I would contend that the EU shares some of the blame for the recession because of the imposition of Franco-German interest rates on a formerly overheating economy and the mass-importation of cheap labour that pushed up demand for housing. That of course is the fault of the politicians and I don’t blame the immigrants.