EU & Ireland's Stability Programme, 2007-2010

[zachler]

Sorry if this is a double post but the European Commission's opinion on Ireland's stability programme for 2007-10 was published today:

http://www.rte.ie/business/2008/0219/economy.html
Access it here : http://ec.europa.eu/economy_finance/...on12059_en.pdf

It's not a very sexy economic indicator, and a little dry, but significant nonetheless.

Here's the highlights:

(MTO = Medium Term Objective, related to the Growth & Stability Pact llinked to the euro)

The overall conclusion is that Ireland is facing several macroeconomic challenges in its transition to a period of lower economic growth, mainly linked to a return to more sustainable activity in the housing sector. Slowing domestic demand has been accompanied by losses in recent years in export market shares, pointing to price competitiveness challenges. The fiscal position is expected to register a noticeable deterioration in 2007-2008, from a sound surplus in 2006. While Ireland is expected to continue to register a surplus in 2007, the programme foresees that the structural position will turn into a deficit in 2008 which will increase somewhat thereafter. The risks attached to the budgetary projections are broadly neutral in 2008, but from 2009, in the absence of adequate expenditure containment, outcomes could be worse than projected. While the MTO would be broadly reached in 2008, keeping to the MTO thereafter might be possible if the margins foreseen in the programme as contingency provisions remain unused. Furthermore, regarding the long-term sustainability of the public finances, while the public debt is low, Ireland is at medium risk because of the projected impact of population ageing on pension expenditure. The challenge for the authorities will be to deal with macroeconomic risks, while at the same time avoiding a deterioration of the fiscal situation.

[The Lighthouse Keeper]

I see very little reference to our negative Balance of Payments position of -4% of GDP.