Ireland’s soggy patch

Ireland was one of the first countries to fall into the abyss of the 2008 credit crisis, and has been a brave model for austerity efforts since. But the coast is far from clear for the Emerald Isle. Those who have been holding Ireland up as proof that bailing out the banks is an affordable model, should take another look.

“The economy has just entered a double-dip recession, shrinking for two quarters. Fourth-quarter GDP was up year-on-year, but the recovery faltered as the year ended.

The weakness is clear in more frequent measures: on Thursday Ireland reported house prices fell again in March to a new low, down 3 per cent on a year ago. Nationally, prices are down more than half from their peak.

The plunge in goods exports has been partially cushioned by services – from Google’s European HQ, for example – but total exports in the second half of last year still grew at the slowest rate since they restarted after the 2008-09 crisis.

As the economy weakens again, workers seem less pliant and politicians less brave. Civil servants last week rejected a union-agreed deal to cut €1bn from the government pay bill. Plans for water charges have been delayed, the first miss of a restructuring target.”

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