Quarterly Economic Commentary, Winter 2011/Spring 2012

Duffy, David and Durkan, Joseph and O'Sullivan, Cormac (2012) Quarterly Economic Commentary, Winter 2011/Spring 2012. [Working Paper]

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Abstract

The euro zone financial crisis remains unresolved. The euro zone economy is slipping into recession due to the impact of both the austerity measures and the effect of policy uncertainty in the euro zone on investment, consumer spending and employment. The euro zone banking system needs to be recapitalised, and account must be taken of the effect that the write‐down of Greek debt will have on this. The UK economy has been adversely affected by the euro zone crisis and is unlikely to meet its fiscal targets unless more restrictive measures are introduced, which in turn will worsen its economic performance. By contrast the US economy seems to be performing somewhat better than many had expected. Thus in the two regions that are of great importance in trade terms for Ireland – the euro zone and the UK – the country is facing weak or declining demand, while in the US, demand is growing modestly. The overall picture is weak.

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