Ireland and Greece: A Tale of Two Fiscal Adjustments

March 13, 2013

Three years into Europe’s crisis, and with output falling in Italy, Spain and Portugal, the different experiences of Ireland and Greece are instructive. More tempered fiscal consolidation has helped Ireland restart growth and bond issuance, while harsher adjustment in Greece has contributed to a sharp reduction in GDP, elevating debt ratios and reinforcing doubts about creditworthiness.