Aidan Neill

Two weeks ago Ireland’s National Treasury Management Agency (NTMA) announced the rarest kind of accounting mistake. As a consequence of some double counting of liabilities within the Housing Finance Agency the Irish government established that it was 3.6bn Euros better off than it previously believed that it was. Following the discovery of the error, Ireland’s gross outstanding debt for 2010 was revised to €144.4 billion (92.6% of GDP) rather than the published €148 billion (94.9% of GDP). A nice windfall, certainly, but…

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The often used phrase “sovereign debt-crisis” happily lumps the PIIGS (Portugal, Ireland, Italy, Greece and Spain) into the same collective boat, but each national crisis has its own characteristics that make the likelihood of default different from country to country. For Greece, fiscal adjustment is the key issue, as the government has been extravagantly fire-hosing the public sector with borrowed money for some time. For Portugal, however, the key problem is the private sector’s continuing external deficit: the government debt…

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