Austerity is consigning Ireland to recession for a decade or more – at least

Constantin Gurdgiev and Steve Keen, Laura Noonan of the Irish Independent and Dan O'Brien of the Irish Times will join Vincent Browne on tonight's programme to discuss the eurozone crisis, the latest troika review and water charges. 

Below, Vincent blogs ahead of the show. {jathumbnailoff}

The eurozone crisis has reared its head again and the Irish crisis has deepened, although tomorrow the troika will probably commend Ireland for adhering to the rigours of the rescue pact. 

In the Markets section of tomorrow’s Financial Times there is a report stating: “Amid the topsy-turvy nature of markets in recent weeks, one extraordinary event almost went unmarked. Short-term German interest rates, represented by two-year bond yields, fell below their Japanese equivalents last week for the first time in more than two decades. It is confirmation of what some have suspected for a while: the eurozone is turning Japanese.”

It states: “The similarities with Japan are most apparent on the economic front. Peripheral eurozone countries could be facing a decade of sub-par growth and austerity as they struggle to overcome their debt burdens.” It points out that this could mean Japan’s growth over a 20-year period was only 8 per cent and that this could be the case now with eurozone “peripheral” members, including Ireland.

The scale of Ireland’s double-dip recession has still not been appreciated officially. There is repeated talk of how the economy has been “turned around” by the new government, while the reality is the economy has entered a deep second recession under this coalition with GNP declining by 7 per cent in the last quarter of last year.

The significance of all this is that the austerity policies are doing terrible damage to this society and consigning us to a very prolonged recession for a decade or more – at least. Without an appreciation of this, there will be no change of course.

Image top: giorgios_vr.