Back to the West: Irish Economic Update

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 helped, perhaps, by the fact and the memory that it’s done this before. The failure of a Keynesian spending strategy in the 1980s granted Charlie Haughey’s 1987 government the room to sharply cut public spending, decrease debt and, eventually, cut taxes – moves which helped lay the foundations for economic growth throughout the 1990s.