Smaller countries with heavy debt burdens like us are at the mercy of international markets
The Irish economy is one of the few in Europe enjoying any kind of recovery, partly down to some good luck on energy import prices and the weaker exchange rate. The recent nervousness about economic prospects in China is not the principal threat to that recovery. The bigger threat comes once again from the international financial situation. With the eurozone architecture unreformed, external conditions pose a permanent threat to any small member with a heavy debt overhang.
If the latest instalment of the Greek crisis has not done so, the jittery performance of world financial markets over the last few weeks should remind everyone that the international economy remains fragile. Securities markets and exchange rates are jumpy, world trade is sluggish and the long-predicted slowdown in China has finally materialised.
There may be a vigorous recovery under way in Ireland but it is exceptional, and external events could see it derailed very easily. In the eurozone, the dysfunctional response to the crisis in Greece is further evidence that the reforms necessary for a durable monetary union have not been undertaken.