The Irish Economy

The latest issue of The Economist features a leader on the contributions of economics blogs and a briefing article that highlights the role of blogs in promoting various heterodox economic hypotheses (including the MMT advocated by various commenters here).

The Irish Times reports on this development in this article.

Zsolt Darvas at Bruegel compares the experiences of Iceland, Ireland and Latvia in this new paper.

One thing journalists from other countries ask quite frequently is why there haven’t been more riots or other expressions of collective anger in Ireland, given the scale of the problems we’ve faced and the sheer injustice of some of the actions taken since all of this began in 2007. I always answer that I have no idea why we haven’t seen more grass roots reactions like Bondwatch Ireland. I really don’t know.

Last March in Holland we had an example of twitter-inspired social unrest leading to the reversal of bonuses being paid out. This is the first I’ve seen of it, so I thought I’d blog it.

From the piece:

ING customers mobilised on Twitter and other social networks to protest at bonuses paid to bosses at the bank, one of the biggest in the country. The threat of direct action raised the spectre of a partial run on ING, terrifying the Dutch establishment. Fred Polhout, union organiser at the bank, says: “People were outraged. We heard about the bloated sums being paid again in the City and in New York; but suddenly the issue exploded on our own front door.”

and:

So severe was the public reaction to Hommen’s bonus that within days he had agreed to waive the award and told other ING directors to do the same.

Fascinating, and perhaps something to watch for in the coming months in an Irish context.

The WSJ has a long article today on some of the key episodes in the 2011 stage of the euro crisis - you can read it here.

Jamie Smyth provides an overview of the current state of the Irish banks in this FT article.

I’ve been banging on about Ireland being in a balance sheet recession for some time. Richard Koo’s latest paper in Real World Economic Review (.pdf) has some really interesting charts, including one on Ireland’s balance sheet recession, which I reproduce below.

All three ‘programme’ countries, Greece, Ireland and Portugal, are committed to privatisation of state assets.

In Portugal, the state owns 25.05% of EDP, a listed electricity generation, distribution and supply business, which also owns some gas operations. A slice of EDP’s operations are in Brazil, some in Spain, most in Portugal.

The state also owns 51.1% of REN, a listed business which owns the electricity transmission business and the high-pressure gas pipeline network in Portugal, as well as some LNG and gas storage operations. It has no significant activities outside Portugal. Both EDP and especially REN embrace regulated activities. Both gas and electricity were originally state-owned in Portugal.

The government has announced the sale of 21.35% of the shares in EDP to the Three Gorges power company of China for €2.7 billion, which will leave the government with less than 4%. The shares are widely held and Three Gorges will be the biggest shareholder. The government has also announced its intention to sell part of its stake in REN, presumably taking it below majority ownership.

These developments are interesting in view of the Irish government’s decision to eschew vertical separation at the ESB and to seek to sell a minority stake in the existing company. Portugal went for vertical separation of the network companies some years back, along the lines of the recommendation for Ireland in the of the Review Group on State Assets which reported in April 2011, and has now decided to exit ownership in powergen/supply more or less altogether. In addition, they seem willing to go below majority control of REN, the networks business. The State Assets report recommended retention of state ownership, at least for the time being, in these businesses.

A reader alerted me to this, which apparently is not a joke. For a horrible moment, I thought there was going to be ninety five theses but mercifully, the “people who count themselves friends of the Ifo Institute” limited themselves to sixteen.

Anyway, happy Christmas to one and all, even the friends of the Ifo Institute.

The proposed legislation is available here.

available here.