Monday 5 December 2016

Stephen Kinsella: Forget last week's success: we have yet to solve far bigger issue of jobs

Published 12/02/2013 | 17:00

A queue at the dole office in Cork city. There are more than 200,000 people unemployed for over a year
A queue at the dole office in Cork city. There are more than 200,000 people unemployed for over a year

MARKETS are forward- looking. That's the first thing I say to students when I teach them financial economics at the University of Limerick. This one statement has everything students need to understand about how and why financial markets work. They deal in expectations about the future, and discount the past heavily.

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As a nation, we've rightly been obsessed by changing the expectations of the markets, because we want them to lend us money to have the standard of living we have today. We also want them to lend us money so we can roll over some of the €125bn or so of debt we've racked up since 2007. What should Ireland do next to change the expectations of the markets further?

The Government has every right to savour its success with the European authorities on changing the repayment rates of the promissory notes. Like most people, I congratulate Ministers Noonan and Hayes for taking such a big step towards righting the ship of State. Looking forward, however, they don't have the right to be complacent about the remaining challenges facing the State.

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