Ireland provides an economic role model for Europe

Ireland provides an economic role model for Europe

Standard and Poor’s, one of the main rating agencies, has upgraded Ireland’s credit rating to ‘A’, writes Prince Michael of Liechtenstein.

During the 2008 crisis the Irish government guaranteed a huge liability for Irelands' public finances with Irish Banks.

Ireland fell into major recession but started a process of austerity and internal devaluation. This internal devaluation means a country gains competitiveness by increasing productivity and reducing costs, such as wages and salaries. This is achieved without devaluing the currency, which is impossible for Eurozone countries.

Ireland has got through this process and was the eurozones' strongest growing economy in 2014 with growth estimated at five per cent. Standard and Poor’s also estimate that Ireland’s economy will continue to grow at rates of 3.7 per cent from 2014 to 2016. The Celtic Tiger is back.

The Irish government took a long view on the country’s future. It carried out the necessary reforms as statesmen for the good of the country, even though the government runs the risk of not being re-elected because of short-term hardship the measures caused.

France and Italy are not implementing the reforms Ireland carried out so courageously. These two countries are endangering the economy of the entire eurozone with their lacks of action, foresight and political courage.

The planned monetary measures - including additional quantitative easing - outlined by European Central Bank chief Mario Draghi on Thursday, December 4, 2014, will only buy time unless there are real economic reforms and less bureaucracy. His initiative alone will not be an economic cure.

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