Pearse Trust Blog

Two years ago, the United States and Western Europe were in the same boat: a recession on a scale that had not been seen since the 1930s. With images of the Dust Bowl swirling in the minds of lawmakers, the US, the United Kingdom, and the Eurozone took different tactics to attempt to pull their economies out of the recession. The US adopted Keynesian economic principles; namely, they tried to spend their way out of the recession. The UK and the Eurozone took a different tactic: cut spending. There are merits to each plan, even though they are at the opposite ends of the economic spectrum.

One year into its three-year programme, the Troika praised the Irish Government for implementing wide-ranging reforms to restore the health of the financial system and to enhance competitiveness, growth and job creation and agreed to release its next tranche of funding. The Troika have also begun to work with the Irish Government on a technical paper exploring ways to reduce the cost of Ireland’s banking bailout. The Troika concluded that the programme is "on track, but challenges remain and continued steadfast policy implementation will be key." Ireland’s budget consolidation is on a "clear path" to reach the 3% of GDP deficit target by 2015.

Italy’s Prime Minister Silvio Berlusconi has the harshest words for the euro. In 2005, he said the euro has “screwed us all” and blamed it for Italy’s recession.  Now, Europe is on the brink of economic collapse, as evidenced by rising unemployment, a huge Greek national debt that is causing unrest, and other indicators that the euro was not a guarantee of economic prosperity.  Germany’s Prime Minister has a dire prediction for what will happen if the euro fails.  “If the euro fails, Europe fails,” Merkel has said, according to published reports.  She warned of a threat to peace in Europe and emphasised the need to protect Europe.