Ireland is making a spectacular recovery from its economic woes, the Financial Times has stated in an editorial entitled ‘The Irish Patient.’
“Ireland's epic economic binge was so intoxicating that the ensuing hangover was certain to be a long, painful and humbling experience.
Yet there are encouraging signs that the worst is over," the editroial stated.
“Other countries caught in the eurozone's sovereign debt and financial sector turmoil could learn from the way that Ireland is nursing itself back to health.
The FT states that problems remain such as high unemployment and one in ten mortgages under water.
But the editorial stated: “Wage cuts and price deflation have restored Irish competitiveness. In contrast to Greece and Portugal, its fellow occupants of the eurozone's intensive care unit, Ireland's current account deficit is moving into a surplus.
"The rebound is explained partly by the multinational companies, chiefly US-owned, that use Ireland as a European base. But Irish policymakers have played their part, too ... Ireland is regaining the confidence of global investors,” the editorial says.
The editorial has praise for the new Irish government also.
“The Fine Gael-led coalition government earned credibility after it took power in March by swiftly cleaning up and consolidating Ireland's banking sector. Outside assistance has helped: eurozone leaders acted wisely in July when they eased the terms of Ireland's rescue loans.”
The editorial is one of several in recent days, including from the Wall Street Journal, that is highly positve about an Irish rebound. In addition, billionaire investor Wilbur Ross has stated that Ireland is now the best investment in Europe.
All this explains why, despite severe debt market turbulence in July and August, Irish 10-year government bond yields have fallen to less than 9 percent from over 14 percent.
The patient is not yet fully on his feet. But Ireland is showing that, under the right conditions, recovery is possible.
(Courtesy of The Financial Times)