Forget the Greeks -- China's troubles are far more worrying
WHAT's happening in Europe at the moment is pretty scary but anybody who ignored the happy clappy brigade's self-serving "optimism" last year will not be surprised and should not allow themselves to become too distracted as the game plays itself out.
Greece will leave the euro-zone this year. It will be painful for the Greeks for a couple of years just as devaluation was painful for Estonia and Iceland but the Greeks will find their feet again. It won't make a huge amount of difference to the rest of us, just as the Greek default made little difference.
In truth, Europe has displayed considerable cunning and ruthlessness by spending the last few months ensuring that Greece could be cut loose if needed. It ain't pretty but it's smart.
The real dangers are now elsewhere. All the evidence suggests that China is crash-landing before our eyes.
Key indicators such as electricity consumption, rail cargo volumes and disbursement of bank loans are all slowing rapidly. These are important because in China, just like back home in Ireland, the official figures for gross domestic product bear little relation to the figures published.
Electricity consumption hardly increased at all in April while rail cargo volumes are rising at about half the pace of this time last year.
The reasons are all too familiar: a property bust that led to a 51pc drop in the number of Chinese bulldozers sold in March.
Our trade with China is still risible but a collapse in the Chinese economy will have immense effects on Ireland indirectly because it will destabilise the world economy and lead to a long period of political instability that will leave us all wondering why we got so excited about Greece.