Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
THE STARK FIGURES released by the Central Statistics Office yesterday have sent commentators on the economy into a tizzy.
To recap, the Irish economy is still officially the worst-performing one of all the 27 EU states. Our Gross Domestic Product (GDP) fell by 1.9 per cent in the months from July to September this year. Gross National Product (GNP), a more accurate barometer of economic performance, fell by 2.2 per cent in that time. This contraction in the economy is the worst since early 2009 and reverses the growth trend of Q1 and Q2 of this year.
So where does this leave us “going forward”? The Irish Times carries a front page story that puts together these figures, and the “exceptional circumstances” as described by Herman van Rompuy of the European Council which prompted him to release the draft EU fiscal deal yesterday, and comes up with the headline, “Fears of new recession as economy suffers sharp decline”.
Certainly, the latter document does not make for comfortable reading – it says that countries with a debt-to-GDP ratio of over 60 per cent would have to agree to reduce their debt by 5 per cent per year. As Ireland currently falls into that category (our ratio is around 90 per cent), that would mean coming up with billions more in taxes and cuts from each Budget for the best part of the next decade. Sinn Féin finance spokesperson Pearse Doherty was quickest off the blocks last night to criticise the clause and told TheJournal.ie that it is “unworkable”.
The London Independent’s Economics Editor Ben Chu is also sounding a note of caution over the “poster child of the eurozone’s austerity drive” because of the figures. Business Week also had a pop at Ireland’s ‘Poster Boy’ image, saying the figures had “tainted” it.
So it’s rather heartening to consider the Wall Street Journal’s take on the situation. Eamon Quinn has written that the figures “should certainly not be read as a sign that Ireland – long praised (or patronised) as best in class of the eurozone’s troubled bailout-out economies – is sliding back into its deep three-year recession”.
Instead, Quinn focuses on the fact that these quarterly figures can be “remarkably volatile” and claims that it is austerity that is stopping the Irish economy from growing. In fact, he says, the Department of Finance is probably right in predicting a 1.3 per cent growth in Irish GDP next year.
So who is right? Investors.com – the digital portal of the Investor’s Business Daily – posted a brief comment yesterday:
With Europe falling into a recession and the global economy slowing, foreign demand may not offset government austerity measures and weak domestic demand.
The question, ultimately, is whether the economic downturn of Q3 is here to stay. This is a visualisation of what Q3 looked like. Let’s hope the guy from the Wall Street Journal and his caution on calling a full-blown ‘new’ recession is right.
(via CSO)
To embed this post, copy the code below on your site
I’m calling time on the ‘democracy’ of the Irish Republic. It isn’t a century old yet and we have already made a right hames of it. Its time for the revolution. Does anyone have a Guillotine?
Yes and it is used with monotonous regularity in Dail when legislation is forced through with minimum discussion
Heading for a recession, you mean we left the last one? Gimme a break?
As for the legislation in the Dail, ever noticed how, when it suits our masters, they can rush through legislation in days but when it doesn’t, well they can’t? Sometimes they just can’t manage the legislation at all, like the upwards only rent issue, “can’t be done, sorry” they said. Now who’d benefit from that…?
The best and most motivated, to earn a living and provide for their children, will emigrate. The illiterate, 20 a day, fat wasters will stay to fight over their share of the social welfare sponge.
Are you staying or going?
My guess, Rommel we’re stuck with him.
Sorry, can’t see your comment, my belly’s in the way and the fog of smoke is making my eyes water. Wouldn’t matter anyway ‘coz I can’t read!
I’m as much motivated by the fact that I want to stay in this country to pursue my career, my goals in life here in Ireland! I don’t want to leave!! What does that me or others like me?
Patriot Aine? If you can manage at all I think you are. I know it’s a tough one for people not working but makes me mad watching people having to emigrate. Wish it was just a choice v
The problem is that our austerity makers have not been affected by the recession. They are continuing to pay themselves ridiculous wages topped with expenses larger than most people’s salaries, they get massive pensions when they leave before 65 mostly, they continue to line their pockets with our taxes and have the cheek to force measures on us that cripple our country and people. If they were paid on the basis of economic performance I’m sure theyd get it right. I have always been pro Europe until recent times, I say drop the euro, go with the punt following our friends next door in the uk’s sterling, burn the bondholders, reduce our corp tax even more and become a haven to multinationals. We have paid more back to Europe via bank guarantees than we’ve ever received from Europe since the 70′s.
And what about all the sand the EU is giving our government?
They go through tonnes of it each week to accommodate their heads.
Did anybody notice the last recession actually never finished?
When are they going to confirm that we are in an economic depression? Nearly 4 years later and things have progressively gotten worse.
We have finally reached “Laughingstock Status”….
Ah sure we have our health, I know these are hard times but we’re Irish we will battle on. If you visit a hospice you will realise that money definitely isn’t everything
I think the government needs to finish this recession first before they start a new one. Two recessions on the go at once would be head wrecking not to mind double the pleasure for the politicians and they are having enough fun with one as it is.
In the Dail bar, where every round is the tax-papers round, all having a good laugh “I heard today some old people have to choose between food or heat” “HAHAHAHAHAHAHAHAHAHAH, the silly stories some poor people come up with” “I’m off to get myself a swan sambo and a pint of Champers”.
Well said man. I’m sick of them laughing everytime I see them on tv as well. They are so arrogant. They haven’t a clue.
I think we need to start preparing ourselves for a genuine debate and referendum regarding whether we stay in the euro or leave and defaul. While defaulting would mean huge changes for everyone, ie, don’t be fooled into thinking it’s an easy way out, it may now actually make more economical sense of the austerity will be that bad for that long.
Be warned though, if you are unemployed, or working in public service you may get stung badly. Worse than any of the budgets so far.
The problem is the unsustainable levels of sovereign and private debt.
The solution is to embrace the crash.
Most commentators are coming to realise that a crash is unavoidable and efforts to avoid this mean continued austerity with conditions continuing to deteriorate.
Lessons from Asias economic crash 1997.
http://mobile.bloomberg.com/news/2011-06-26/what-europe-can-learn-from-asia-s-1997-crash-william-pesek.html
How an economic crash can provide opportunities for those that are prepared.
http://www.marketoracle.co.uk/Article10248.html
Right, here’s my decision: I’m tired of all this crap, from today I’ll stop watching/reading any news. The Journal.ie app is coming off my iPhone – bye everybody!!
best emigrate to somewhere a little better off, not reading about it won’t save you, although, I feel your pain.
Bye Gis – sorry to hear that.
If it helps cheer you up, here’s a story about Britney Spears. http://thedailyedge.thejournal.ie/britney-spears-engaged-to-boyfriend-306847-Dec2011/
Gonta miss you Gis.
My head hurts
Recession is coming…WTF are we in now ?
You see, saying “the recession is getting worse” acknowledges the fact that the current measures are not working, meaning we bailed out the banks for nothing, all this austerity is for nothing, they got everything wrong.
So, say we’re heading into a new recession kind of glosses over that nicely.
Me too, got a banging hangover. If civil war broke out today I wouldn’t even by bothered to get out of bed.
And it all started with de-regulation!
It’s a depression we’re in…the classical definition of a recession says it lasts 9 months…we’re heading into our 5 year of this shit storm. Quinn is absolutely bang on the money when he says that the austerity measures being inflicted are exactly what s prolonging this…and they’re being inflicted because our spineless worthless political classes are being told to inflict them. He’s also right when he says that we’re not being praised for taking these measures…we’re being patronised. We’ve taken all the crap this crowd have shovelled at us because we expected them to play fair with us by reducing the debt we’re carrying…but they’ve decided not to do that. End game Europe…we’ve had it with ye and your political lackwitted puppets in Leinster House…if Europe is heading back into ‘recession’ it’s because its being pushed there.
well said, sumes that up well. Outa Europe asap, and i was always pro europe, but now I would take my chances with the punt!
Absolutely Maggie…sooner we’re free of the old lady Euro the better..
Dead on Tony, the patronizing is for our spineless clowns in the Dail who translate it as praise and pass it on to us wrapped up in the “we’re good little Europeans, don’t say anything out of line” parcel.
I’m glad more and more people are waking up to the fact that the EU is not structured around it’s citizens and ironically – the more eurosceptic we become the more we will be listened to.
It’s only when we start electing people who wear the green jersey and not wrap themselves up in the blue and yellow that we can shake off this whipping boy mantle and start playing the EU at it’s own game.
They’ve already reversed 2 democratic referendum here and further implementation of their rules here will only drive us deeper and deeper into a depression.
Now Susan that is just cruel.
Any more Britney Spears stories?
Why does Britney spears have “TGIF” wrote on her shoes?
Toes Go In First.
sigh :(
Sean, of course we are, but to economists a recession is when you have two success quarters of “negative growth”.
There’s lies, damn lies and statistics. This doesn’t take into account the 100,000 or so people who left who left Ireland. That’s about 2% of GDP..
Or 2 billion per year in social welfare payments!!
5 years ago it was all different everybody was in love with FF and you spending Money as if it was going out of fashion nobody had time for anybody it was just show me the money u cannot eat money what comes around goes around.
Well i guess cooley distillery owner John Teeling won’t be struggling too hard this christmas… Well i say fair play to him.. He thoroughly disliked FF and said as much whenever he got paper space… Glad to see the good doing well despite all this recession malarky…
Hang on when did the state improve from depression to recession…..???
Gis rarely put more than two sentences together, so his inspirational words of wisdom may not be missed.
Thought he was nice. I liked him.
If its going to turn into a 1930′s style global depression and nowhere is immune – Ireland might not be the worst place to be – irish people don’t seem to show a propensity for mob violence and aggression – or would that change after a few weeks of collecting food parcels?
Just trying to lure him back ;-)
Maybe your readers would be interested in reading the full blog:
http://blogs.wsj.com/eurocrisis/2011/12/16/austerity-bites-into-irish-economic-recovery-story/
More of the same. Maybe some time the Journal will take a new stance on these things. Every bit of news I have read today stinks of misery and desperation. As writers, creative types, surely you can see a way to deliver some inspirational news? You may not have started out as a news source to over 100, 000 people. Through good work, the product has flourished. With this, there is also a great responsibility on your writers.
Is the Journal stuck in a rut? If you need help with any of this, get in touch.
Think before you…Ink!
Hi Sandra,
I don’t know if you noticed before you left the above comment, but this article is from 44 days ago when the Central Statistics Office released some very hard facts about the Irish economy.
Thanks, Susan
My bad. ;p
have your say