Sunday, September 19, 2010

Is Ireland heading for default?

Amidst all the attention on Greece, Ireland had fallen off the radar, especially after its much-praised embrace of fiscal austerity. However now, raising questions about the effectiveness of the austerity medicine, there are unmistakable signals from the Bond and CDS markets (via CR) that Ireland may be hurtling into sovereign default territory.

Markets appear clearly unimpressed by Ireland's very harsh fiscal austerity measures. As the Irish book closes, we may not need to wait three years to find out the outcome of Ireland's experiment with fiscal austerity.

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