Firms must be ready to leave eurozone

THE further austerity being piled on Ireland is troubling, and not just for the citizens who are having to suffer further tax increases and yet tougher budgetary cuts.

Ireland, up to now, has been the good boy of the European fringe. After a slow start, it took the bailout money and did everything that was asked of it. Now it appears this was not enough, an economy that has just struggled back to growth gets hit again. In the case of Ireland, confidence seemed to be coming back. Bond yields had dropped and the country could see its way back to being able to borrow in the markets again in a couple of years’ time. But now this prospect has receded again.

Something more serious is also happening in the country. Companies both in Ireland and those with substantial operations here are starting to make plans in the event of Ireland leaving the eurozone. Of course, officially that is unthinkable, but companies have to prepare for such an outcome, however unlikely they think it might be.