EDITORIAL : THE INDENDENT, IRELAND

         

 

Pushed to the limits of austerity

Yesterday's two-week ultimatum to Greece from European finance ministers almost certainly represents the EU's last throw of the dice as it seeks to avert what is beginning to look like an inevitable Greek debt default.

While threatening to withhold the latest €12bn of bailout cash from the Greeks if they don't comply with the terms of ultimatum might seem like a draconian threat, just how credible is it if it leads to the very default that both the EU and the ECB are so anxious to avoid?

In reality, not very credible at all. No matter what threats may come from Brussels and Frankfurt it is increasingly obvious that both the EU and the ECB are now no more than interested bystanders in the unfolding Greek drama.

With the ruling PASOK party of Prime Minister George Papandreou split down the middle and the opposition New Democracy party seemingly determined to oppose them tooth and nail, the chances of the Greek parliament approving a new set of austerity measures next week must be considered very uncertain. Even if it does, will the Greek government be able to impose such harsh measures on its population in the teeth of fierce popular opposition or will it be swept from office by violent protests as the Argentinian government was in December 2001?

While much has been made of the apparent stoicism with which the Irish and Portuguese peoples have taken their medicine by comparison with the supposedly anarchic Greeks, the differences between the countries may be more apparent than real. Despite indications to the contrary, the truth is that the Greeks have done all that was asked of them under the terms of the original May 2010 EU/IMF bailout.

Unfortunately, the austerity measures that came as part of the May 2010 bailout have deepened the Greek economic downturn with the unemployment rate up to 16pc and the economy set to contract by at least a further 3pc this year. This makes it impossible for Greece to meet the budget deficit targets agreed in May 2010. In other words, the austerity measures are making things worse rather than better.

Unlike that of Greece, the Irish economy with its strong export sector, isn't a complete basket case. However, there are also clear indications that the EU/IMF-prescribed austerity isn't delivering the expected economic results in this country either, with no appreciable growth expected this year.

That is why yesterday's ray of hope of being in a position to potentially return to the markets to borrow money for ourselves at reasonable rates is such an important development. There is a long way to go -- and doubtless more pain to come. But there is, for once, a recognition that we are doing our best.

Well done Rory

Just when things seem to be going from bad to worse, golfer Rory McIlroy's fairytale victory in the US Open provided a much needed lift to all of our spirits. After his final day meltdown at the Masters in Atlanta in April the 22-year old from Holywood, Co Down, was under enormous pressure to show that he wasn't a "choker" and that he had what it takes to win one of golf's coveted Majors.

Even for those of us who have little interest in golf the Majors are special. The winners of these events, the US Open, the British Open, the US Masters and the US PGA, occupy a special place in the pantheon of sporting heroes. Golf writer John Feinstein captured it well in his book on the Majors when he wrote that: "On four Sundays a year the world's greatest golfers go out to play for ever."

Yesterday, McIlroy joined the ranks of golf's immortals. In one of the greatest performance ever witnessed at a Major, he didn't so much beat the rest of the field, which included most of the world's best golfers, as blow it away. While his winning margin of eight shots was mightily impressive it merely hinted at his utter dominance of the event.

McIlroy's victory provides a welcome and long-overdue diversion from stories of financial crises and economic meltdown. Well done Rory and best of luck at the British Open in just over three weeks' time.