Time to face up to worst case scenario - General election 2016

PAUL O’CONNELL never led any of his teammates to heroic acts of defiance by telling them their opponents were magnificent athletes, wonderfully skilful players, do-or-die competitors, and all-round good blokes who phoned their mother most nights.

Equally, there aren’t too many votes in telling people that another economic crisis is a very real possibility. Negativity, consumer sentiment, and all of those mercurial indefinables have a way of being self-fulfilling. Gung-ho candidates naturally prefer to ooze optimism even if that means being unrealistic. This is especially true in a country where we’re far happier to shoot the messenger than face an uncomfortable reality. Nevertheless the growing evidence of uncertainty in international markets cannot be ignored and all Oireachtas candidates must have a plausible answer to the dreaded what-if-it-all-goes-wrong question.

We may be seduced by best-in-class growth predictions but our smugness is challenged by a international economic basics. Global markets yesterday sought refuge in the Japanese yen, gold, and top-rated bonds, and dumped US dollars believing the Federal Reserve will not increase interest rates. The dollar hit a 15-month low on the yen, and gold, the ultimate refuge in challenging times, hit its highest since May as a wave of pessimism swept trading floors. Europe got off to a torrid start, with Britain’s Ftse 100 down 2.3%, Germany’s Dax 2.4% lower, France’s Cac 40 down 2.8%. In Ireland, the Iseq was down 1.9% or 114.30 points to 5,780.41. AIB shares were down 7.14%. Some €4bn was wiped off the Irish market on Monday with the index closing down 5.4%. This was its worst performance since August 24, 2010, when banks were on life support and dependent on tax-funded restructuring.