Sunday, 21 February 2010

No laughing matter

Michael Burke: The British Tory Party have expressed open admiration for the policies pursued in Ireland by the Fianna Fail government. While the entire G20 engaged in fiscal reflation in 2009, only Ireland adopted a contractionary fiscal policy.

Partly as a result, there is a growing interest in Britain in those policies. Meanwhile, letters have been exchanged in the leading newspapers by different groups of economists as to the merits of rapidly adopting contractionary policies which, so far, are unique to Ireland. There is therefore a growing interest in Britain in the nature and impact of recent Irish economic policy. This was the explicit reason for a BBC radio interview with Martin Mansergh which was aired on Sunday morning. The interview is here, almost exactly 15 minutes into the broadcast.

There is perhaps a less-than-commanding grasp of ther government's actual measures, and the degree of levity displayed may disappoint some. But perhaps the most interesting aspect of the interview was the claim that we were fortunate in the timing of the crisis, which gave us until 2012 to face the electorate. Fortune is clearly a relative term.


rubensni said...

This works both ways. In her BBC Hard Talk, Mary Coughlan kept attempting to equate the situation in the UK to Ireland and the rest of the so-called PIGS. This is a trend that has been growing in certain Irish newspapers or other sources of commentary.

There is one big reason why this comparison doesn't stand up:
2010 is an election year in the UK.

Rory O'Farrell said...

Brian Lenihan is an excellent lawyer.

In much of the media an illusion has been created that Ireland is not one of the PIGS and we are in a far better position. At the presentation of the European Economic Advisory Group report in Brussels today a member of the panel stated that Ireland's position regarding the bond markets improved.

However, he was quickly corrected by an author of the report, saying that this is not the case. Irish bond spreads are the second highest in the Euro area, having been overtaken by Greece at the end of 2009. Irish bond spreads have not come down significantly since mid-2009 and are considerably higher than Portugal, who is next in line.

I must give credit to the governments ability to 'talk up' the economy. However, do the realise that 'spin' is no replacement for broad band infrastructure, lower rents, or school buildings.

Damian said...

The claim that we should not over exaggerate the extent to which businesses blame government is certainly “laughable” - perhaps the minister should have said that it would be good to have an estimate on the extent that government policies damage business!