It was just a year ago that Ireland was in recession and losing a job each and every five minutes. Yet according to the Wall Street Journal, a 2.7 percent bump in GDP as it relates to Ireland’s export market is an official sign of the end of recession. But the overall consensus among experts is that Ireland has a long road to travel before they reach economic recovery. Ireland lost 14 percent in GDP figures from 2008 to 2010, placing them squarely among the worst off euro zone nations during the global recession. Prime Minister Brian Cowen is urging Ireland to be prepared for hard times for the next 10 to 15 years.
Ireland and also the recession: Investor confidence required
Sky-high benchmark bonds are keeping Ireland within the recession, reports the New York 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. Low cost loans for the Irish government – not to mention high taxes, lower public salaries and the smoldering housing market crater – have made it difficult for them to attain their goal of recapturing investor confidence.
Relying heavily on exports
Ireland has previously depended upon the business of info companies like Intel and Microsoft, but this time, they’re hoping exports will fuel their economic recovery. When lower public wages and energy costs might have helped somewhat, the fear that the export market won’t create enough jobs – not to mention fear for the falling euro – is very real, writes the Times. Lower wages are sending bright young graduates elsewhere. They want cash until payday, not the promise of a better Ireland in 10 to 15 years, when experts predict future infrastructure spending will resume.
Cowen hopes low for 2012
The long, hard road to economic recovery via tough deficit reduction may be the only way that Ireland will escape recession. But it will likely not happen fast enough for Irish voters within the next election. Prime Minister Cowen has promised the already slashed public salaries won’t go lower, but that may be a case of too little, too late. Irish voters might have had enough.
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
