Whatever future holds there will be many risks
EVERY decision carries risks, whether made by governments, firms or individuals. Nothing new in that, but today's report from the Economic and Social Research Institute (ESRI) is a stark reminder of just how big the risks are. Given the damage wreaked on economies by the financial crash, conventional forecasts based on past performance are of little use. Instead, the authors of the report make three assumptions – from the optimistic to the pessimistic – and try to figure out what might happen to the Irish economy.
The differences are enormous. In one, Europe and Ireland fix their remaining problems quickly. In the second, Europe recovers but the Irish financial system continues to cause problems. In the third – on a day when the IMF marked down the eurozone economy for a €600bn contraction this year – Europe continues to stagnate.
The results vary from what most would regard as a full recovery for the Irish economy by 2020, to an unending crisis whose implications are impossible to assess.