Euro siege lifted - A lot has changed in two years

In Jun 2011 the eurozone was gripped by something approaching panic.

Governments across the currency area and other EU members were accused of being far too slow to react to rapidly changing circumstances, most especially the merciless whimsies of the markets.

Many people wondered if banks could be trusted and if savings were safe. Some who could moved funds outside the eurozone. Others with savings trapped in pension schemes looked on, increasingly fretful each day. Summit after summit had been frustratingly inconclusive and unequal to the task of creating the environment needed to restore badly needed stability.

The bailout strategy that temporarily rescued peripheral economies was found inadequate. EU leaders feuded over Greece but eventually agreed a second bailout, this time a €130bn lifeline. Spain, Italy, Portugal and, still under the radar, Cyprus were in precarious positions. Ireland’s situation was far from enviable too.

A year later, in Jun 2012, EU leaders had finished, or let us hope they had, bailing out the lifeboat and were able to begin charting a response that went beyond survival and imagined a recovery. A priority was jobs for the millions watching their lives pass by in a grey, dispiriting way because they cannot find work. Today’s figures are frightening — 26.34m people across the continent out of work, 19m in the eurozone, 5.69m of them young people.

Last year national governments, the ECB and the EU worked closer together than before to generate growth and employment, ensure financial stability, and establish effective systems of financial governance.

This June, though huge and daunting challenges remain, it is possible to hope that the euro siege has been lifted and, unless something spectacularly unforeseen happens, the currency seems secure.

Last week’s Irish unemployment figures, though unsustainable individually or socially, did not show an increase but rather a minimal reduction. In itself this is hardly an occasion for celebration, but it is not the only metric hinting at a positive sea change.

It was also reported last week that Ireland has risen three places to 17th in competitiveness rankings. In all 60 economies were assessed to see how well countries manage economic and human resources. The survey acknowledged that Ireland made significant improvements in areas including government finances, growth and inflation. More than half the executives surveyed cited a competitive tax regime, a skilled workforce, a business-friendly environment, and high educational levels as significant factors in Ireland’s favour.

That positive judgement followed the UN Human Development Index which ranks countries on income, education, health and life expectancy. The 2012 report ranked Ireland seventh out of 186 UN states. We slipped two places since 2008, but being ranked seventh and the third highest in the EU is, as we struggle with a multibillion-euro debt legacy, remarkable. The rating is all the more spectacular as the UK was 26th and we got a better grade than affluent countries like Sweden, Switzerland, Japan, and Canada.

None of these statistics put meat on the table, but they do suggest that things are beginning to turn and that it may not be as reckless as it once seemed to be ever so slightly optimistic. What a change that would be in just two years.