Ray of hope but a long road ahead
Published 06/08/2011 | 05:00
On a day that brought further turmoil to the international financial markets, there were indications that, in Ireland at least, things have stopped getting worse. While the rest of the world worries about the future of the eurozone, ratings agency Standard & Poor's said that Ireland's credit rating was now "stable" and that it expected NAMA to be able to return significant amounts of cash to the Exchequer over the next four years.
After rubbishing all things Irish for more than three years, any outbreak of even cautious optimism from the ratings agencies is good news. Yesterday, S&P affirmed its long-term credit rating on Ireland at BBB+ and said that it believed Ireland wouldn't require any further "official" funding when the current bailout ends in 2013. The credit agency predicted that NAMA could return up to €16bn to the Exchequer by the end of 2015.
If, and that's still a very big "if", S&P turns out to have been correct then the success of NAMA in generating cash will, along with the spending cuts and tax increases contained in the four-year plan, largely eliminate the budget deficit by the middle of the decade. While there is many a slip twixt cup and lip, for the first time in a long time it's possible to hope the Irish economic glass is half full rather than half empty.