ESRI: Crisis to favour US growth

THE different approaches to dealing with the financial crisis will favour growth in the United States ahead of Europe, according to the latest research by the ESRI.

It said that if borrowing costs in European countries like Ireland remain high, compared with Germany, and if these high spreads propagate into the largely nationalised banking system in debtor countries, then “this will cause a sharp slowdown in activity.”

The research bulletin on Banking Sector and Recovery in the EU Economy says the more “fragmented” or “national” banking system emerging in Europe will have broader implications for the economic system.