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Ireland's Economy Becomes Fastest-Growing in the Eurozone

After an economic implosion, could Irish resilience be reasserting itself? According to the WSJ, country’s economy became the fastest-growing in the Eurozone in the three months leading up to June. The financial crisis hit Ireland very hard, leading to the depopulation of many of the country’s more rural places as people left to find work. Out of all the countries decimated by the recession, however, it’s the one that has the best chance of recovering from the financial collapse. That recovery may already be beginning:

Ireland’s Central Statistics Office Thursday said gross domestic product rose 1.5% from the first quarter and 7.7% from the second quarter of 2013. For the eurozone as a whole, economic output was flat in the second quarter, while Latvia recorded the second most rapid expansion in the EU, a 1.0% increase from the three months to March. […]

As a result of stronger growth, government tax revenues have picked up, making it more likely the government will meet its target of reducing its budget deficit to 3% of GDP in 2015 from a peak of over 30% of GDP in 2010.

Some of this growth has to do with overall UK economic expansion and other factors outside Ireland’s direct control, like falling borrowing costs. But Ireland also appears to have learned its lessons from the first crash, and the government is pursuing smarter policies to build on the growth it is experiencing. The Irish Times:

Despite the better-than-expected figures, [Minister for Finance Michael] Noonan said he did not think there was a “clamour for a giveaway budget”.

He said the Government was aiming to get unemployed people back to work and attract young graduates who had emigrated back to Ireland. “The budget will be designed with those objectives in mind.”

He said the Government wanted to “get away from the boom and bust model”.

Ireland still has a long way to go before it can start to breathe easy: The WSJ notes it will need even more growth to meet its debt burden. But this is a good first step, and more may well follow from a country known for its people’s creativity and resilience.

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  • Duperray

    Keys to remember are:
    1- Bring disoccupied to work,
    2- the battle never ends.
    All european governments caring disoccupied so much have rather to think about this than expanding “State Providence” mind which put UK on its knees before Margaret Thatcher came in power.
    In many european states now, an unmarried couple with one child better not work at all: With legal public subsidies they can easily make $5000 / month, eternally.

  • Corlyss

    And the reason for their success . . . . ?
    God bless ’em! The Irish did the hard work of austerity that all the other Eurotrash pols fled from faster than a formula 1 racer. Collective cowardice was embodied in the remark of a EU finance minister leaving a crisis conference in early 2009: “We know what to do. We just don’t know how to get re-elected if we do it.”

    • Andrew Allison

      “We know what to do. We just don’t know how to get re-elected if we do it.” can also be said of our reprehensatives in Congress, who manifestly care about nothing else.

      • Corlyss

        Yes. I know.

  • Andrew Allison

    There must be some mistake; Dr. Krugman assures us on an almost daily basis, that austerity doesn’t work!

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