Viewed through the ruthlessly narrow lens of the financial markets, Ireland's rehabilitation has been impressive . Its banks look far healthier than they did at the height of the crisis; modest growth has resumed; and its debt-to-GDP ratio is expected to peak this year, before starting to decline. That has helped Ireland's bond yields – effectively the interest rate Dublin must pay on its debts – fall to well below the level faced by the other bailed-out eurozone countries. But there are at least three reasons finance minister Michael Noonan was right to declare its exit from the bailout a "milestone", rather than the end of the road. First, the human cost of the downturn has been immense, and is far from over. Unemployment has started to decline, but is still expected to remain above 13% for at least another twelve months. Property prices appear to be bottoming out, but they halved between 2007 and 2012. And while many countries have got used to wages declining in real terms since the Great Recession, Ireland's workers have had to swallow outright declines in pay, even before the impact of inflation – and at the same time as what they may have thought of as a housing nest egg evaporated before their eyes. Secondly, unlike in Iceland , where there has been large-scale debt forgiveness, both consumers and the government in Ireland are still carrying the burden of debts built up during the property boom and the banking crisis, which will weigh on growth for many years to come, and leave the economy vulnerable to currents beyond Dublin's control. The average household has debts worth twice its annual disposable income – well above levels usually considered dangerous. And thirdly, the markets' relaxed approach to Ireland could evaporate very quickly in the face of a new bout of turmoil elsewhere in the eurozone. The triggers could be many and various – a hitch in plans for banking union; US tapering pushing up bond yields across the board; a political crisis in one of the other bailed-out member states. In calm times, investors are meticulous about differentiating one debt-burdened state from another; in a crisis, those distinctions can rapidly become blurred. In leaving the clutches of the International Monetary Fund without a safety net, Ireland has taken a bold decision. Only time will tell whether it is justified, or reckless.
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