Krugman’s Blog, 3/22/13

Three posts yesterday.  The first was “Ireland Recovers, and Recovers and Recovers:”

March 2010: “Greece has a role model, and that model is Ireland” — Jean-Claude Trichet

December 2011: “As European leaders scramble to overcome the Continent’s debt crisis, many are pointing to Ireland as a model for how to get out of the troubles.”

March 2012: “Confidence is returning to Ireland and to Europe. The Irish economy is turning the corner. ” — Jose Manuel Barroso.

The latest GDP figures:

Feel the boom!

OK, maybe a bit more exegesis: Ireland embraced austerity early and forcefully, and has been a good soldier all along; so according to the austerians, it should be a success story. And they keep on seizing on any bit of good news as proof that austerity is working.

Now, sooner or later Ireland will recover. But guys, we’re already four years into this story …

The second post of the day was “Cyprus Update:”

Well, it looks as if the Icelandization of Cyprus — at least in the sense of making offshore depositors take a big hit — is happening faster and more decisively than I feared. Great summary by Paul Murphy at FT Alphaville, ending thusly:

Big depositors in Cypriot banks stand to lose circa 40 per cent of their money here, which has drawn plenty of fury and veiled threats from Russia.

But what exactly can the Russians do about this? Sell euros? Tear up double taxation agreements? Murder Cypriot bankers? Medvedev and co could not have played a worse hand during this crisis — and it’s not immediately clear why.

Cyprus now has a binary choice: become a gimp state for Russian gangsta finance, or turn fully towards Europe, close down much of its shady banking sector and rebuild its economy on something more sustainable.

The choice is obvious.

Still, if I were a Cypriot official I might seek a bit of extra security for my family …

The last post of the day was “Friday Night Music: Carolina Chocolate Drops:”

I was going to post something substantive, but first I had tech problems (an hour on the phone with NY Times support), then internet access problems, so enough for today. Here’s some cheerful stuff from a group people have been telling me to give a listen.

Carolina Chocolate Drops, “Country Girl,” via Liveset



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