Business Irish

Monday 21 October 2019

Our export success shows 'bailout working here'

Tom Molloy

IRELAND'S booming exports are seen as the main evidence that our bailout is the only one that can be called a success.

In recent days, Bank of Ireland shareholder Wilbur Ross and the influential Brussels-based think-tank Bruegel have highlighted structural strengths in the Irish economy to differentiate the economy here from moribund rivals elsewhere in Europe.

The proof for that is seen to be our ability to compete in international markets by selling goods made here.

"The Irish programme seems to have been successful," Bruegel said in a report looking at the effectiveness of bailouts.

"At the time of writing, Ireland is on track to exit the three-year programme and regain access to financial markets on time, though subject to risks."

The report is far less sanguine on Portugal. Its bailout may yet prove successful but the Portuguese economy remains structurally weak and fragile against shocks. The Greek bailout is dismissed as unsuccessful.

"Greece is on a totally different trajectory to Ireland and Portugal," Bruegel academics Jean Pisani-Ferry, Andre Sapir and Guntram Wolff conclude.

The report cautions that the collapse in Irish imports has led to "a much deeper and longer recession than expected".

It argues, in essence, that the domestic market has been left behind even though international trade benefited from bailout discipline.

Asked this week why he invested here before doing deals in Spain or Greece, Bank of Ireland shareholder Wilbur Ross said he was convinced by the mix of Irish exports – in particular the fact that high-end pharmaceuticals are both our biggest export and biggest employers.

And the geographical spread of Ireland's exports bears out the thesis that the country is competitive even in selling high-value products into developed markets.

However, with the EU taking more than half of all goods sold, there may be question marks over the impact of the euro on sales outside the block.

The euro remains a strong currency – buoyed by Germany's huge exporting economy in particular.

While geography is undoubtedly a factor, the reality is that the further away from Europe we go, the less successful our exports.

North America accounts for around a fifth of goods exported from Ireland, but the emerging economies in Latin America, Asia and Africa barely register as Irish markets.

That suggest Ireland is missing out on key markets at a time when trade patterns are being radically redrawn across the globe.

Irish Independent

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