Could the Irish opposition parties actually vote down the budget?
I’m not asking rhetorically. I don’t know the answer to that question. Even if they do pass the budget, what happens after the January elections? Even if the election isn’t some kind of debacle that throws the entire nation into turmoil, how is it going to handle its crushing debt-load over the long run? Those are not rhetorical questions. They weren’t to Fitch, which downgraded the Emerald Isle by three notches. From the Journal story:
“The scale and pace of the deterioration of public finances, continuing contingent fiscal and macro-financial risks emanating from the banking sector, combined with the highly uncertain economic outlook and loss of market access, means that Ireland’s sovereign credit profile is no longer consistent with a high investment grade rating,” the report said.
The Irish government of course doesn’t see it like Fitch. But I’m not sure how much their word is worth anymore. Regardless, the overarching issue here is that the European mess is far from over, even once we get past the “headline risk” over the next few months.
So, yes, there are still big risks over in Euroland. But what about the picture here at home? Are the bond vigilantes, who’ve been so quiet during this time of government excess, finally waking up? Boy, that’ll make some story for 2011, won’t it?
Those aren’t rhetorical questions, either.