The sick Celtic Tiger getting sicker

All the recent Eurozone attention has been focused on Greece because they are the first EMU nation that the bond markets took an exception too although the other, immediately vulnerable southern nations are starting to feel the pinge. Meanwhile, Ireland, which along with the Baltic non-Euro states, were the first nations to implement harsh austerity programs (tax increases, public spending cuts), has stayed under the radar. The line I read often is that the Irish are more easy-going than the Latins and will accept the harshness with a smile. I wonder about that. But Ireland might soon be back on the main screen because despite all the IMF and EU predictions about the adjustment path that would accompany the austerity (things would get better relatively quickly), things have become worse. Just as Modern Monetary Theory (MMT) would predict. And when you analyse the data in more detail, they are looking a lot worse than Greece. This also just exposes that the problem is the deficit and debt ratios but the fundamental design of the Euro system and the fiscal rules it forces onto member states.

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