ITALY:"L'IRLANDA NON e la Grecia" (Ireland is not Greece) ran the headline yesterday on an article from the Italian economics website, Fondionline.it.
In a piece that might have been written by an Irish Government spokesman, Fondionline.it argued that it is totally mistaken, if understandably tempting, to draw comparisons between the current situation of the Irish economy and that which prompted Greece to look for a €110 billion bailout from the European Union last spring.
While Greece must come to terms with a “fiscal black hole” that is the consequence of a non-competitive economy, writes the analyst, Ireland can point to a “dynamic” and “innovative” economy which has a much higher growth margin than that of Greece.
The Greek problems were “structural” while Ireland’s problems owe much to the current global economic crisis.
Furthermore, Ireland does not suffer from the sort of credibility problem which bedevilled Greece, especially in relation to the presentation of the national balance sheet.
The above analysis is not untypical of just how economists and experts view the Irish crisis.
Not only is the Irish predicament looked on with sympathy but there is also a marked reluctance to see Ireland having to resort to an EU bailout for the very obvious reason that the market instability prompted by such a rescue package could easily have negative repercussions on the heavily indebted Italian economy.
Economy minister Giulio Tremonti has many times in recent days warned against the perils (for Italy) of further instability, be it prompted by Greece, Ireland, Portugal or whoever.
A government spokesman said the Italian government’s position on Ireland was best expressed by the joint communique issued by the UK, France, Germany, Italy and Spain at last week’s G20 meeting in Seoul.
That statement, intended to calm the troubled market waters, argued that bond market jitters over a future bailout fund (with reference not just to Ireland) were “misplaced”.
Nor did the Italian government spokesman expect today’s Ecofin meeting in Brussels to produce any important new developments.
For all that specialist economists view the Irish situation relatively favourably, mainstream news organisations yesterday begged to differ with many reports suggesting the Irish bailout was totally inevitable and just a matter of days away.
In that context, much was made of comments allegedly made by Fine Gael’s finance spokesman, Michael Noonan, to the BBC to the effect that last weekend’s rumours about an “EU intervention” were true.
At this stage, an enterprising bookmaker might do well to offer odds on the timing of two forthcoming events.
In other words, which will happen first – Ireland will be bailed out by the EU or the centre-right government of Silvio Berlusconi will collapse? Many observers believe that, in both cases, it is just a matter of time.
