The American Interest
Analysis by Walter Russell Mead & Staff
The Lands of Eire and Ice on Road to Recovery

Regional good news can sometimes point to larger problems. Ireland, for instance, is projected to grow faster than any other European economy over the next two years, and there are also signs that Iceland is getting back on its feet after the devastating 2008 financial crash.

First, Reuters on Iceland:

Iceland’s Arion Bank, formerly Kaupthing Bank, said on Friday it has issued its first international bond, the country’s first overseas issue by a financial group since 2007, the year before its financial system collapsed. [...]

“I think it is safe to say that it represents an important milestone in the regeneration of the Icelandic economy,” Chief Executive Hoskuldur Olafsson said in a statement.

Next, Ireland appears to be on the mend, though it’s not quite a return to the heady days when people talked about the “Celtic Tiger.” The Independent brings us the story:

Ireland’s growth will stand in stark contrast to many of the other economies in the single-currency zone, which are expected to slip into recession. [...]

While the economy here is now expected to expand for the fourth straight year in 2014, the eurozone as a whole is expected to contract again this year, before returning to growth in 2014.

In general this fits with a larger pattern in Europe: in the 1970s and 1980s, Europe’s south, historically relatively backwards and poor, made great strides in catching up with the north. But since 2000 it is the northern countries that are again pulling away from the south. Solving these kinds of regional imbalances is part of what the European project was supposed to do, but such ambitions today seem like distant memories of a more innocent and optimistic era.

Now nobody really knows what to do.

Published on February 25, 2013 9:15 am