Asking for external aid not a disaster, says top economist
The bank expects peripheral countries such as Ireland to catch up and do well towards the end of 2011, contributing to overall eurozone growth or 1.7% in 2011 and 2.1% in 2012. In the euro area, activity should be subdued in the first half of next year: this period will likely coincide with the implementation of widespread austerity measures, some pass-through from a stronger euro (5% up from the last six months) and a tumultuous period of identifying which of the peripherals joins Ireland into the EU/IMF safety net.
It was stressed that Ireland’s problems arise from the banking sector and not from the public finances, but that the solution will put more pressure on the sovereign as the Government will be taking on the additional burden.
