Ireland will officially exit its bailout on Sunday. Not much will happen but symbolically it’s huge and will be used by the EU as evidence that its austere crisis-fighting approach can work. Today, the IMF will confirm Dublin passed the last review of its bailout programme – the final piece in the jigsaw. Finance Minister Michael Noonan is also expected to speak.
For Dublin, this is only the beginning.
Support for the coalition government has slumped with the minority Labour party suffering worst (‘twas ever thus in coalitions).
As a result, Labour is pressing for a loosening of the purse strings while the dominant Fine Gael under premier Enda Kenny seems prepared to bet on a return to growth delivering the votes they need to rule outright after the next election, due by early 2016.
There are already some signs of easing with the government opting for a smaller package of spending cuts and tax hikes in its 2014 budget and the IMF warning planned 2 billion budget cuts planned for 2015 year may not be sufficient. The main benefactor in the polls so far has been Sinn Fein.
We will interview Slovenian central bank governor Bostjan Jazbec a day after the country said it had a 4.8 billion euro hole in its banking system that it can plug without turning to Europe for a bailout.
That has spared the European Union a politically fraught problem but the small euro zone country’s problems are far from over. A fire sale of state assets will now be triggered and the banks are so embedded into the Slovene economy that deleveraging will cause great damage.