Failure to implement troika reforms a recipe for disaster
The troika aren't gone, but you'll miss them all the same. Ireland's exit from the loan facility agreed with the EU and IMF will take place this month. Rather than have a party about it, it is useful to think about where we are now, and reflect on what needs to be done to restore some sanity to the State's fiscal arrangements as well as wider social concerns. Let's take a look at the economy, and at a simple way to understand what might come next for us.
The level of domestic demand in Ireland is a measure of how much people in Ireland pay for their goods and services. At the height of the boom, in the fourth quarter of 2007, we were spending €39.5bn a quarter on, well, stuff. By the Christmas of 2009 that number was down to €32bn, and it has remained around €30bn per quarter since then. The last reading taken was spring 2013, and domestic demand was €30.4bn.
A sort of stagnation has taken place as households and firms adjust to paying back debt at the same time as the Government decreases spending and increases taxation. Meanwhile, the difference between the value of Ireland's imports and exports has gone way up, very positively. Why is that?