EVERYONE KNOWS WHAT NEEDS TO BE DONE:

Ireland, the Pig getting out of the muck: If you’re deep in debt, the Irish can show you a way out (Bronwen Maddox, 5/11/10, Times of London)

Ireland, like Spain and Greece, used the low interest rates of the eurozone to go on a property splurge. The implosion, in the global turmoil, of that bubble led to a crisis in Irish banks, which needed a rescue of between €40 billion and €50 billion. Last year Ireland had a budget deficit of an eye-watering 14.3 per cent of gross domestic product. That outstrips Greece’s 13.6 per cent, and Britain’s 12 per cent. This year it may drop to 11.7 per cent, but that is still four times the eurozone limit, and Ireland is still vulnerable to shocks from Greece.

But the markets have not taken flight from Irish debt because Mr Cowen, despite his dour demeanour, has talked through big pay cuts. Police and teachers have had their salaries cut by 15 per cent, ministers by 5 per cent and others have had pay frozen.

Mr Cowen has a popular Finance Minister in Brian Lenihan, and is said to be direct and inclusive in Cabinet. He has reminded the Opposition that in the boom it accused government of spending too little, not too much. Above all, he has constructed a package which many unions accept (although others reject it). This trades off some protection for pay until 2014, with pension cuts beyond.