Notes on the Front

IBEC has just released a ‘report’ (which Finfact’s Michael Hennigan has described as ‘a marketing brochure’) that highlights the Irish economy’s strengths – educated labour force, low-tax regime, falling prices, etc. They probably released this as an antidote to their previous economic commentary which revised downwards key domestic indicators (GNP, investment, etc.). So, it was time for some upbeat news.

But there’s upbeat. And then there’s spin. Take their section titled ‘International confidence is returning’.

‘Ireland’s decisive and credible action in curbing its deficit has gained recognition in the international markets. This has differentiated Ireland from Greece, Spain and Portugal in financial commentaries.’

Then they produced a chart comparing Ireland’s 10-year spreads with Greece. This, of course, shows Ireland in a positive light. Why wouldn’t it – Greece isn’t even in the markets anymore. But they didn’t show Spain and Portugal which they mention, never mind that other super high-debt peripheral country Italy. On Friday evening, this is how the markets perceived us, using the 10-Year spread (with German bonds)

• Portugal: 2.86
• Ireland: 2.84
• Spain: 1.86
• Italy: 1.48

If they had produced that chart, it would have put the ‘decisive and credible action in curbing its deficit has gained recognition in the international markets’, into a far different perspective.

And on the same day that IBEC produced their international-markets-love-us report, Moody downgraded the Government’s bond rating, citing banking liabilities, weak growth prospects and a substantial increase in the debt to GDP ratio (just to clarify – the reason that growth prospects are weak is because of the Government's 'decisive and credible' deflationary policies).

All this, according to IBEC, is an expression of international affection.  Can't you just feel it?