The Footsie heads past 5,000 yesterday. Inter bank lending rates are down. There are some signs of life appearing in US and UK housing markets. In the US the gap between New Orders and Inventory has just hit its second highest reading on record. Are the buds of growth straining out from underneath the compost?
I think the honest answer is that they could be. The stock markets could well be over responding to some signs of decent economic activity but there does appear to be some signs that the international economy is, at least, flattening out.
This makes the reform agenda in Ireland even more urgent. It would be a further tragedy (is that possible?) if the global economy was to pick up but that Ireland was still not well placed to respond to this. Exports accounted for 83% of our GDP in 2005 (the last year for which these figures are available). Amongst our EU colleagues, only Belgium, Estonia and Luxembourg have higher figures.
The Irish government must lead the way in making sure that we are in place to pick up for a world recovery as it just possible that the foundations are been laid for this recovery to occur. That’s my last point.
It was politicians and public institutions who laid the foundations for a future recovery. Interest rates were cut to zero. VAT rates were cut. Massive public spending plans were put in place. Manufacturing support plans were announced. Various attempts were maid to tackle the banking crisis.
Yet, the stock of government in Ireland has never been so low. But our country can be saved. Politicians can lead in making this happen. We will not just need an economic recovery, we’ll need a political one too.