Irish bailout actions display credibility the Greeks lack - The Irish Times - Sat, Jun 04, 2011 via Irish Economy
ALTHOUGH THE size of the fiscal deficits of both Greece and Ireland are broadly similar (10-11 per cent of gross domestic product), Greece’s debt to GDP ratio is far higher. It is likely to significantly exceed 150 per cent this year, compared to just over 100 per cent for Ireland.Moreover, Greece’s growth potential, at least in the short term, is hindered by major obstacles to domestic and foreign investment, while Ireland has a broader export base linked to a thriving multinational sector. The key problem for Greece seems to have been an inability to take decisive and credible budgetary action, including effective spending control mechanisms. In addition to major statistical misreporting of the fiscal gap, and despite the strong oversight presence of the EU/ECB/IMF troika for over a year now, credible measures to reduce the Greek fiscal deficit towards a sustainable level have been lacking.By contrast, the Irish Government has takensignificant steps to reduce the expenditure/revenue gap. Admittedly, there is a long way to go. To reduce the deficit from 10.5 per cent of GDP to about 3 per cent will require further major and difficult efforts over several years. But so far, the signals and actions from the Government, both previous and current, have been unambiguous: there is no realistic alternative. This matters enormously when it comes to outsiders’ perceptions of the credibility of the Irish commitment.Why the difference between Greece and Ireland, given they are both facing broadly similar external financial pressures? [continuar a ler ...]
Sem comentários:
Enviar um comentário