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Home Publications Blogs Beat the Press Hold the Champagne on that Celebration Over Ireland

Hold the Champagne on that Celebration Over Ireland

Thursday, 14 March 2013 10:59

The Washington Post had an article that touted Ireland's success with its austerity program, which has allowed it to sell long-term bonds in financial markets at reasonable interest rates. The article questions whether Ireland can be an example for the rest of Europe with the first sentence posing the question:

"In Europe’s grand battle over growth vs. austerity, has Ireland proved that austerity works?"

While it is undoubtedly good news that the Irish government can re-enter credit markets, it is worth noting that the unemployment rate in Ireland is still 14.7 percent, down very slightly from its recession peak. This is still 10 full percentage points above the pre-recession level. This is supposed to prove that austerity works?

Comments (4)Add Comment
written by Chris Engel, March 14, 2013 12:12
Ireland's successful bond auctions are more a result of the market calm that came about from Draghi's 2011 major bond purchases to banks all around Europe that provided the demand to stabilize yields.


That, and not the needless fiscal austerity, was the reason for the return to normalcy for Irish credit conditions.
Look over there, something shiny!
written by Amit, March 14, 2013 12:33
European politicians (and those in Washington), along with non-serious publications, are looking hard for something, indeed anything, that will prove that contractionary austerity measures are working. Have these guys ever been concerned with trifling issues like unemployment and its long-term impact on those still looking for work? And will they ever change their minds and accept they were wrong, and that they have caused much suffering? Regrettably, the answer to both is a cynical "No".
Erin's Isle is doing so well they are thinking of selling off the National Forests...
written by BigUgly, March 14, 2013 4:57
Yeah, Ireland is doing great...

written by watermelonpunch, March 14, 2013 6:49
What do regular people in Ireland think?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.