Have austerity measures worked in Ireland?
A man holds a board for an "Irish Fortune Teller," in the O'Connell Street shopping district in Dublin, Ireland. Harsh measures have been taken to get the country out of debt, but the future is still uncertain.
Steve Chiotakis: U.S. Treasury Secretary Tim Geithner is in Europe today -- part of a three day visit urging leaders to take bold action to save the continent's economy and the euro. Geithner's visit comes just a day after Ireland announced nearly $2 billion in stiff budget cuts. It's been a year since Ireland had to be bailed out by its European neighbors.
Austin Hughes is chief economist at KBC Bank in Ireland. He's with us now from Dublin. Hi Austin.
Austin Hughes: Good morning.
Chiotakis: I know Ireland has just unvield this newest round of cuts, and you know, we’ve seen a lot of other measures taken so far. Is Ireland’s economy getting back on track?
Hughes: I think it’s too early to say we’re getting back on track, but it's certainly weathered a good deal of the storm. The cuts that we’re announcing in this budget are just the latest installment. They account to about 2.5 percent of Ireland’s GDP this year. We’ve had a sharp enough hit to personal incomes you can imagine; unemployment has risen. So it’s been fairly tough, but there are some signs that the Irish economy is beginning to stabilize.
Chiotakis: How has life changed, you do think, for everyday Irish folks?
Hughes: It’s changed dramatically. We have about 15 percent fewer people at work -- that’s a massive decline in headcount. It’s a reduction in numbers at work of a scale that hasn’t been seen in most other countries. Alongside that, we’ve had very significant tax increases, we’ve had major reductions in welfare entitlements -- so it’s been a very, very tough time.
Chiotakis: Austin from KBC Bank in Ireland, in Dublin. Thank you, Austin.
Hughes: All the best.