Irish Economy 2012: Eurozone recession would hit Ireland; European policy crisis reminiscent of Great Depression

Irish Economy 2012: The ESRI (Economic and Social Research Institute) says in its latest commentary on Ireland's economy that the financial crisis currently gripping the Eurozone, coupled with tightening fiscal policy across the region, are likely to send the single-currency area back into recession. Against such headwinds, the public think tank says Ireland’s road to recovery will become much more difficult, dependent as it is on export-led growth. The think-tank says the Eurozone policy situation is reminiscent of the Great Depression period. The ESRI Quarterly Economic Commentary Winter 2011 says that if the Eurozone were an economy with a fiscal and monetary authority, the present situation would call for an expansionary fiscal policy and a looser monetary policy accompanied by a realistic level of restructuring of the banking system. In the absence of such a structure, coordinated action is the obvious approach, yet the structures are not there to achieve this and the ECB has resolutely set its stance against a much more activist approach.

• Ireland
• consumer spending
• debt
• Eurozone
• GDP
• Irish economy

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