Journalist Richard Barley asks in today’s Wall Street Journal: Who has had the better crisis: Ireland or Iceland?
The Icelandic Krona. Copyright: IPA.
According to Barley, many would say Iceland, which Friday won a Fitch upgrade that restored it fully to investment-grade status; that puts it a step ahead of Ireland, which still has a “junk” rating from Moody’s.
In the short-term, this verdict is probably right. But in the longer-term, Ireland’s Euro membership may bring benefits,” he concluded.
In 2008, the banks and financial systems were too big in both countries, and collapsed. Building a new financial system in both island states has cost taxpayers 45 percent of GNP in Iceland and 40 percent in Ireland.
Last year Iceland’s economy grew by three percent but Ireland by only one percent. But in the long term, Richard Barley believes the prospects for Ireland are better, because of one thing: the Euro.