Is it time to get the begging bowl out?

ejmaztec

Should the Irish government send teams to congratulate the French and Germans in the hope that they put Ireland at the top of the list for a hand-out, or should we all brush up on our French, German, or both, and get on the next ship/plane?


http://www.irishtimes.com/newspaper/breaking/2009/0813/breaking16.htm

Germany, France return to growth


Germany and France enjoyed a surprising return to economic growth in the second quarter of the year, data showed today, ending their recessions earlier than many policymakers and economists had expected.
German gross domestic product rose unexpectedly by 0.3 per cent in the second quarter, bringing an end to the country's deepest recession since World War Two and boosting hopes of recovery in the broader euro zone.
French Economy Minister Christine Lagarde pre-empted data due at 7.45am, announcing gross domestic product in her country also grew by 0.3 per cent in the second quarter.
“The data is very surprising. After four negative quarters France is finally coming out of the red,” Ms Lagarde told RTL radio.
The consensus forecast in a Reuters poll of economists had predicted a 0.3 per cent quarterly contraction in both Germany and France in the second quarter.
Germany suffered a calamitous 3.8 per cent contraction in the first quarter of this year to cap four quarters of decline - although today's data revised that drop to 3.5 per cent - while the French economy shrank by 1.2 per cent.
Euro zone GDP data are due at 9pm with the risks to forecasts of a 0.5 per cent quarterly contraction now clearly to the upside.
The euro climbed and euro zone government bond futures opened down after the economy figures fuelled optimism about the outlook for the single currency bloc's economy.
European shares were poised to open higher on the data and after the US Federal Reserve said late yesterday the world's biggest economy was showing signs of stabilisation.
Evidence is mounting that the worst of the damage wrought by a global financial crisis, which began with a US housing market meltdown in 2007 and took a turn for the worse last year when US bank Lehman Brothers collapsed, is now over.
“The recession has ended. Not just in Germany. The post-Lehman global confidence shock has receded. Firms are investing again,” said Joerg Kraemer at Commerzbank.

ei.sdraob

if anything this is bad news for Ireland

heres why:


* if the core euro zone countries pull out of recession
* ECB will start to increase the base rates (they already stopped their miserly QR effort)
* increased rates will hit the endebted mortgage holders with variable loans hardest, as i said before interest rates have only one way to go
* this will mean less money to spend by consumers


bring on the increased rates I say :P

dan_d

I definitely read only a day or two ago that the Germans were expecting one of their worst recessions ever, and it was going to get worse in the next few months, particularly their unemployment rates. It was on one of the news websites, can't remember which one though.
Odd.

ei.sdraob

dan_d wrote: »

I definitely read only a day or two ago that the Germans were expecting one of their worst recessions ever, and it was going to get worse in the next few months, particularly their unemployment rates. It was on one of the news websites, can't remember which one though.
Odd.

do remember that there are elections coming up in germany and economic figures will be distorted to suit whoever is campaigning so take any news with a pinch of salt

ejmaztec

There has been some harping on about temporary exits from recession, after which it's back into a worse one.

I expect Gordon Brown's hoping that this is temporary, so that whatever good reputation he has left doesn't vanish altogether.

tlev

Yeah, I have also been reading that we aren't out of the woods yet. People are optimistic and cautious at the moment but we are still in for some shocks.

On the note of the begging bowl. Ireland already have it out to the tune of 400m a week.

Économiste Monétaire

ei.sdraob wrote: »

* ECB will start to increase the base rates (they already stopped their miserly QR effort)

The covered bond purchase programme has only completed €5bn out of €60bn.

ei.sdraob

Économiste Monétaire wrote: »

The covered bond purchase programme has only completed €5bn out of €60bn.

true i was meant to say they will complete what is started but no more

60billion euro is nothing compared to what UK and US are doing

UK are after committing to extra 50billion pounds despite all the talks of "green shoots" there

Yixian

ei.sdraob wrote: »

if anything this is bad news for Ireland

heres why:


* if the core euro zone countries pull out of recession
* ECB will start to increase the base rates (they already stopped their miserly QR effort)
* increased rates will hit the endebted mortgage holders with variable loans hardest, as i said before interest rates have only one way to go
* this will mean less money to spend by consumers


bring on the increased rates I say :P

This will only happen if Ireland is too slow to recover. If Ireland can finish transport21, really push the knowledge-economy idea and if NAMA doesn't backfire, then the country should be on the mend within a few years, early enough to ride the benefits of the German and French recovery.

The only danger Ireland has is being too slow, it has to keep up with the rest of Europe.

ardmacha

I would be surprised if this better news is quite the end of things for France and Germany. However Ireland should not get out the begging bowl, it should forget about its property binge and start selling things to these places which have a combined population 30 times that of the ROI. A small increase in market share there could do a lot here.