A hundred years from now, catastrophic climate change may have completely changed the way our children and grandchildren live, work and farm. Possible doomsday scenarios include a shutdown of the Gulf Stream, which Ireland depends on for its relatively mild weather, leading to another ice age.
The science is incontrovertible. Global warming is man-made, and emissions of carbon and other gases are the main culprit. Sure, Ireland makes up only a small amount of total emissions. Because of its size, China alone accounts for more than a quarter of all emissions annually. The US, another 15%. But, we rank highly in emissions per person, and total emissions are going in the wrong direction, up 3.5% in 2016 when the government is targeting a 5% reduction.
While the worst environmental impacts of climate change might still be some way off, we could be facing a bill of nearly half a billion euro every year from 2020 onwards unless we get our house in order. As part of European and global efforts to reduce emissions, we have committed to a reduction of 20% (from 1990 levels) by 2020. Ireland is one of the few EU countries on course to miss its target, leaving itself open to annual fines equivalent to widening the standard income tax band by €2,500 or building 2,500 social houses.
So, what to do? Continue reading
Europe’s Central Bank is often cast as one of the pantomime villains of Ireland’s banking crisis. After all, it is the institutional personification of ‘Frankfurt’s Way’. While it is always easiest to blame the outsider, accusations levelled at the ECB are not in this case entirely without foundation. The recent decision by Jean-Claude Trichet – ECB President until late 2011 – to cooperate with Ireland’s banking inquiry is therefore a welcome development.
The ECB has been hitting the headlines for very different reasons of late, and you might be wondering, for once, not what have they done to me lately, but what have they done for me. The big economic news of early 2015 is that the ECB is finally following the lead of the world’s other big central banks with it’s own PPM (programme for printing money), commonly referred to by finance types as QE (quantitative easing). Basically, this means increasing the quantity of euros in the economy, but with the click of a mouse rather than the cranking of printing presses. For the foreseeable future, Frankfurt will create an extra EUR 60bn – roughly EUR 180 per person in the Eurozone – every month. Not to be sniffed at.
Unfortunately, this new money won’t be dropped from a helicopter into your bank account every month. The theory is that more euros in the system will lead to higher prices, higher wages, even lower interest rates, more lending, more exports and stronger growth.
Ok, you might say, but what does that mean for my back pocket?
Insightful if controversial book sets out a hierarchy of blame, with joyriding politicians at the top…
Click here to read my Irish Times review of The Fall of the Celtic Tiger: Ireland & the Euro by Donal Donovan and Antoin E. Murphy.
Nobel Laureate Joseph Stiglitz can stake some claim to being the intellectual father of the ‘Occupy’ movement with his May 2011 Vanity Fair article ‘Of the 1%, by the 1%, for the 1%‘. He followed up with a book in 2012, ‘The Price of Inequality‘. This, in turn, builds on inter alia the 2003 and 2004 scholarly works of Thomas Piketty and Emanuel Saez on income inequality in the US since 1913.
Piketty, Saez and others – including Ireland’s Brian Nolan – have since worked to bring together data on top income shares for some two dozen countries and counting in a consolidated database (complete with helpful interactive graphics).
We saw the first ripples of the US sub-prime crisis in the summer of 2007. A year later, the global economy was on the precipice of disaster. Only resolute action by world leaders, Gordon Brown not least among them, and coordinated fiscal and monetary stimulus prevented a re-run of the Great Depression.
Cracks in the Eurozone edifice which had been papered over during the good times were soon brutally exposed. As the crisis enters its seventh calendar year, we are more than half way through a lost decade. The question, particularly on Europe’s periphery is whether one lost decade will turn into two.
2013 promises to be yet another momentous year in Irish economic history; the year Ireland hopes to cease being a ward of the troika; a year plagued with potential banana skins. Without doubt, the fallout from yet another hair-shirt budget will dominate the early months of the year. It follows that we will face into a similarly challenging budget cycle as 2013 draws to a close. Like peeling an apple, the closer you get to the core, the more the pips squeak. Budgets will only get harder. Continue reading
For all the doomsayers predicting an imminent ‘Grexit’ from the Eurozone, the latest EU deal to ease their debt burden to 124% of GDP by 2020 should surely give pause for thought… at least on timing, if not necessarily on the eventuality.
In observing the interminable crisis response efforts of Europe’s leaders, it is easy to confuse a lack of haste for a lack of resolve or a lack of understanding.
Certainly, the process may be frustratingly slow. This is particularly the case for financial markets with ADD and journalists with deadlines and a need for a simple narrative. Continue reading
When Europe’s leaders gathered in Brussels at the end of June, they decided to break the ‘vicious circle’ between bust banks and the countries that host them. Otherwise, the fear was that its banks could bring down Spain much as happened in Ireland.
Importantly, and in line with long-standing EU practice, it was agreed that favorable terms applied to Spain would be applied retrospectively to Ireland. Moreover, the Irish bailout was to be looked at with a view to ‘improving its sustainability’, recognizing implicitly that it was not on a sustainable path as things stood.
The agreement was hailed as a ‘game changer’ by some, a ‘seismic shift’ by others, and universally as at least a step in the right direction. Partly in expectation of a deal on its bank debt, Irish benchmark borrowing rates have fallen below 5% to levels not seen since before the 2010 bailout. Continue reading