Past Event

Adjustment through the crisis: the case of Ireland

Following the burst of the credit and housing bubble, Ireland has undergone remarkable adjustments. Productivity has increased at the fastest rate among EU countries and also outperformed the US, the real effective exchange rate has depreciated, economic growth has resumed and fiscal targets have been met. As a consequence of these positive developments government bond […]

Date: Dec 2 - Topic:

Following the burst of the credit and housing bubble, Ireland has undergone remarkable adjustments. Productivity has increased at the fastest rate among EU countries and also outperformed the US, the real effective exchange rate has depreciated, economic growth has resumed and fiscal targets have been met. As a consequence of these positive developments government bond yields have declined substantially. However, current yields are still too high, gross public debt is forecast to reach 120 percent of GDP, the labour market has not yet recovered, and risks remains in the banking system. What lessons to draw from the Irish adjustment? Can economic growth be sustained when significant fiscal consolidation and private sector deleveraging is set to continue? Will the Irish government be able to borrow from markets after the expiry of the current official lending programme or will a second programme be necessary?

The brief initial presentations by István Székely, Director, Directorate General for Economic and Financial Affairs of the European Commission and Philip Lane, Professor of International Macroeconomics and Head of Economics Department at Trinity College Dublin were followed by an open discussion chaired by Bruegel non-resident scholar Alan Ahearne.

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