Tuesday, May 29, 2012

Pioneer Ireland fears austerity was in vain

(Reuters) - Returning from an annual European trade show last month on a flight packed with successful Irish retailers, Ian Martin felt his country's battered economy might finally be turning around.

A supplier of first aid and hygiene products to Irish companies, Martin has spent the last four years trimming costs, laying off some staff and cutting the hours of other employees.

Ireland's government has been doing the same, making inroads into an enormous budget deficit and recapitalizing a near-collapsed banking system. The policies have been painful - the Irish consume 12 percent less than they did in 2007 - but Dublin has won praise around Europe for acting hard and fast.

Unfortunately, it may not matter. The political crisis in Greece and banking woes in Spain now threaten to end the modest Irish recovery spotted by Martin on last month's flight.

"I think if there is a major crisis, people will literally stop spending money. That little bit of confidence that was coming back will be gone," said Martin, who employs 20 people in three cities.

"It is the last thing we need, we have done as we're told and we're still not really coming out of it. It would really just be a further nail in the coffin." Read More