...but its GDP sank by 1.2 per cent in the second quarter of 2010.Yes, Ireland, held out by 'The boy' George Osborne as the country that had the right approach: slash public spending and all will be well.
Well, that's not exactly how it is turning out. It is no shock to us the news that Irish GDP fell by 1.2 per cent in the second quarter of 2010, after a brief increase of 2.2 per cent in the previous quarter. Output was still 14.2 per cent down since the beginning of 2008 - more than twice as large as the drop in UK output - and tax receipts are now only 65 per cent of what they were at the beginning of 2007. Yet the governor of the Bank of Ireland is demanding even deeper cuts. To support the very banks that are causing the problems.
Unemployment rose from 4 per cent in the fourth quarter of 2006 to 13.6 per cent in the second quarter of this year, and long-term unemployment is rising sharply. It is presumably not unrelated that, from 2008-2009, burglary (not aggravated) and theft from shops increased by 9 per cent and 3 per cent, respectively. A quarter of a million jobs have been lost, half of them in construction. It is unclear where any new jobs are going to come from.The Irish government's borrowing costs have increased, not fallen, as a result of the austerity measures.
On 24 September, the spread on Ireland's ten-year bonds over benchmark German bunds widened 12 basis points to 430 basis points, having risen 112 basis points over the past month. Spain, by contrast, has plans to cut much more slowly than the Irish and the spread on its debt now stands at 157 points.
The ConDem plans to slash public expenditure on a scale with the Irish seem ludicrous when the evidence from our neighbours is examined closely. But then, Tories never let evidence get in the way of their ideology.
