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Ireland recently emerged from the EU/IMF/ECB ‘Troika Bailout Programme’ - Leaving Cert Economics - Question 8 - 2014
Question 8
Ireland recently emerged from the EU/IMF/ECB ‘Troika Bailout Programme’. (December 15th 2013) Outline two possible economic implications for the Irish economy of h... show full transcript
Worked Solution & Example Answer:Ireland recently emerged from the EU/IMF/ECB ‘Troika Bailout Programme’ - Leaving Cert Economics - Question 8 - 2014
Step 1
(i) Increased Consumer Confidence
Answer
Exiting the Troika Bailout Programme is likely to enhance consumer confidence within Ireland. As consumers feel more secure about the stability of the Irish economy, they may increase their spending. This additional consumer expenditure can stimulate economic growth by leading to:
- Higher demand for goods and services, thus potentially increasing employment levels.
- Increased tax revenue for the government as consumer spending typically leads to higher sales and income tax.
Step 2
(ii) Increased Economic Sovereignty
Answer
The exit from the Troika Bailout Programme allows the Irish Government to regain more control over its fiscal policies. This newfound economic sovereignty means that the government can implement tailored taxation and expenditure decisions without external constraints. However, it also comes with the responsibility to maintain fiscal discipline, potentially leading to more effective and targeted economic measures.