Via Irish Central; Eamon Quin writes in Wall Street Journal‘s The Source – More Radical Measures Needed to Solve Irish Crisis:
Surely this makes the Wall Street Journal… economically illiterate?
Ireland is still facing an economic and debt crisis of monumental proportions. Irish gross domestic product has slumped by about 15% since it fell into a yawning financial abyss at the end of 2008.
The Irish banking crisis is heading to be among the costliest in the world.
The government’s bill for rescuing private banks from the reckless behavior of a group of private bankers and private property developers during the last of the boom years will now likely reach close to €70 billion–equivalent to about 44% of the annual output of the Irish economy.
Ireland needed to strike a deal with the European Union and International Monetary Fund for €67.5 billion in bailout loans last November when markets, spooked by the bank-rescue costs, refused to lend more money to the government or Irish banks. But few believe that the program will lead the Irish economy out of its three year old recession.
Figures pertaining to the Irish bust are overwhelming. Yet, prescriptions for the crisis from the European Union and European Central Bank are underwhelming. Treatment consists of more austerity through 2015, even though all the private debt of the private banks will be paid back by Irish citizens.
The new Irish government, led by Prime Minister Enda Kenny, that came to power in March, has pledged to save about €5 billion by burning junior bond holders in the banks. But many more billions of euros will be repaid to senior bank holders by Irish taxpayers because the EU and ECB fears spreading financial contagion.
Ireland has been told to lump it. Worse, unemployment has soared from 4.4% in 2007 to 14.8% in May, new government figures showed Wednesday…
exports will not create many jobs and will do little to lift the domestic economic gloom. Today’s Irish manufacturing survey may do some good if it finally kills off the false optimism about Irish exports. Relying on an exports-led recovery to end the Irish economic malaise was always thread bare. Much more burden sharing of its banking debts and more radical EU measures are needed to solve Ireland’s debt crisis.