The Latest on Ireland and the ECB

Below are two good videos outlining the Irish situation. For relevant background info see CW posts below (the last one is most hopeful):

My own view is that Ireland will eventually need a bailout from the IMF and the EFSF.  Listen to what John Brynjolfsson has to say in the first video because he always has a good handle on the macro situation. In the second video, you get more of what the Germans are saying from Hans Redeker.

9 Comments
  1. John Haskell says

    Deficit = 30% of GDP and no access to the capital markets. You are really going out on a limb to say that Ireland “will eventually need a bailout”!

  2. Edward Harrison says

    Frankly, I don’t appreciate the sarcasm. And yes I AM going out on a limb compared to what you hear from a lot of other people.

  3. John Haskell says

    ok more seriously then – the last country I know of that ran a deficit of 30% of GDP was the Soviet Union in 1991. That didn’t work out too well either.

  4. Edward Harrison says

    The 32% deficit is not structural. It’s a one off due to the bailouts.The real deficit is more in the order of 12%. High but not 30%.

  5. Warren Murdoch says

    @Edward, how do you calculate deficit? Is there an official calculation?

  6. Edward Harrison says

    Warren, I am using the official EU deficit calculator. The EU has specific rules on the deficit that required the Irish to include the bailout costs in the deficit for 2010. As with any accounting measure, there are problems here too. For example, Ed Hugh has mentioned that the Spanish have a lot of hidden debt under the methodology now used.

    See here:
    https://pro.creditwritedowns.com/2010/08/spains-national-addiction-to-dinero-b.html

  7. Warren Murdoch says

    @Edward,thank you. I should have been clearer. I was asking about how to calculate the US deficit.

  8. Edward Harrison says

    Try here, Warren: http://en.wikipedia.org/wiki/United_States_public_debt

    It’s talking about the cash accounting deficit (incl or excluding supplemental appropriations) as opposed to the accrual based deficit that you can also get.

Comments are closed.

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