Similarities And Differences Between The Irish And Spanish Economies

This article describes many of the similarities between Ireland and Spain. Both of their economies got in trouble when their real estate bubbles collapsed. This led to recession and declining tax revenues, which led to sovereign debt problems, and the need to deal with a banking crisis. Ireland received help, with a price, from the IMF and the EU. It may need more help as its economy slips into recession. Since Spain is much larger than Ireland, recapitalizing its banks and restoring its economy, will be more difficult. It may need more external financial support than is currently available.

Austerity programs have not led to investor confidence and lower interest rates in either country. Investors are aware of the problems in their banking sectors, and they understand that tax revenues, and the ability to service debt, require economic growth.