Thursday 21 September 2017

Dan O'Brien: Threat of second bailout still has not gone away

There are three major foreseeable risk factors ahead that could lead to us requiring rescue funding again, writes Dan O'Brien

PROTEST: A riot policeman on duty during demonstrations over austerity measures in Athens in 2010
PROTEST: A riot policeman on duty during demonstrations over austerity measures in Athens in 2010
Dan O'Brien

Dan O'Brien

WE HAVE lived in extraordinarily uncertain times over the past half decade. Despite this, many people, including some very clever people both at home and abroad, proclaimed with great certainty last year that Ireland would not exit its bailout this month. They had many good reasons to believe that a second bailout would be needed before the first one had formally ended. But they had no reason to be so certain in that view. It is good for everyone that they have been proved wrong.

That Ireland is the first euro area country to have successfully weaned itself off rescue funding is unambiguously good. Having to resort to a second bailout would be unambiguously bad.

But resorting to a second bailout is a real possibility. Most of the reasons that gave rise to the belief that an on-schedule exit was impossible have not gone away. There are three major foreseeable risk factors over the next two years.

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