While the spread of the coronavirus Covid-19 from China to Europe and throughout many parts of the world poses significant risk for human health in the first instance, it has also destabilised the global economy which has gone into slowdown and could quite easily topple into recession as a result.
Such a development would have very real consequences for the Irish economy. This is not a fanciful notion. Last week the major stock markets worldwide from the US to Japan, including in Europe, registered double-digit losses.
It is evident that the world health authorities have yet to fully get to grips with the spread of the virus, which incubates for 14 days before it becomes evident.
It may be some time, many months, before the authorities can safely say the worst had passed and that the virus is fully contained or its spread in retreat. The consequences for the global economy in such circumstances could indeed be profound.
It is against this background that the main political parties in Ireland are negotiating at what seems to be a snail's pace the formation of a new government. Indeed, three weeks on from the election, it is true to say that there has yet to be any meaningful engagement between the main, and most likely constituent parts of a new coalition government here involving Fianna Fail, Fine Gael and the Green Party, although the Greens could be absolved from blame in that regard as it seems more intent on rolling up its sleeves. It is beyond time the other two parties did the same, and also others which or who may genuinely want to form part of the new government.
When they do so, however, they would do well to remember that events since the election have potentially changed the framework within which the overdue programme for government will take place. Before the election, the Department of Finance estimated that there would be a fiscal space of €11bn within which to operate. Sinn Fein, in particular, chose to ignore this estimation and put forward to the electorate a package estimated to cost €22bn. How irresponsible. The fact is that the €11bn figure came with all manner of caveats in relation to continued robust growth of the economy.
It is no exaggeration to say, three weeks later, this coronavirus has already rendered that sum an overestimation and perhaps significantly so. Other factors, such as a fall in corporation tax receipts, could just as easily kick in to make a mockery of the €11bn sum put forward in good faith by civil servants. It is to be hoped, indeed expected that these same servants of the State are now emphasising the potential realities to all of the political parties which come before them for discussions on the formation of a new government.
These new realities should not be lost on the public either. The spread of this coronavirus is, first and foremost, an event of human health consequence, but thereafter, indeed simultaneously, potentially one of significance in all of our lives whether or not we contract the virus.
When a globally plugged-in economy like China sneezes the world catches cold, and Ireland will not be immune.