WHEN I was in Dublin earlier in the year every taxi driver, without exception, lamented the economic plight of Ireland.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
To cite just one example, they spoke of “a whole generation of young people” who had bought an apartment in Dublin just a couple of years before for, say, 300,000 Euros, fully financed and mortgaged, now found that these apartments were only worth about half that amount, on a good day, yet they still had to service the full mortgage in the face of perhaps losing their job.
They also spoke of the “savage” policies of the government, slashing government expenditure and wages, nationalising banks etc, which they nevertheless hoped would soon turn things around.
At the time, the government, from the PM down, assured our group of their determination to solve their problems themselves and that they were well on the way to doing so.
Well, what was bad then is now even far worse.
This week, global financial markets have been rocked by the news that the Irish government will now have to endure the ultimate embarrassment and accept a financial support package from Europe, with the policy discipline of the IMF.
It is extremely hard for most of the Irish to accept that their economy that, only a few years ago, was the darling of Europe, an outstanding economic success story, could now be on the brink of bankruptcy.
And, as tough as their austerity measures were seen just a few months ago, they now face even more austerity and even tougher times ahead, before their economy will turn around.
What is coming home to roost is the recognition that much of their past economic “success” was artificial and unsustainable, built on excessive debt and government concessions and slack banking practices.
What is now difficult for most to accept is that the sort of policy measures now being specified may risk tipping their economy even further into recession. This is now the subject of active debate within the economic profession.
Ireland is not alone in its plight. Several other European counties are facing similar difficulties, in particular the so-called “PIGS” – Portugal, Italy, Greece and Spain.
The bottom line is that the GFC is far from over for much of Europe, as in the US and Japan. So, expect continued, sometimes extreme, volatility in global financial markets for probably the next couple of years as they are buffeted, from time to time, with unfolding news of the difficulties of these and other countries.
Secrecy and the NBN
IT BOGGLES the mind why the Gillard Government, which promised a “new world” of transparency and accountability, has been so reluctant to release and debate details of the business plan for its national broadband network, especially given the projected cost of the network, the debate about the effectiveness and viability of alternative technologies, and the establishment of what will be a new government monopoly.
Without taking sides in the debate, the government’s reluctance to release and debate the business plan begs the question, “What do they have to hide?”.