Ireland seems now to be experiencing increasing inflation which many are blaming on the EMCB's too-low rates. I have read opinions that Ireland now has nothing but tax policy to curb inflation. My question is why local credit demand has not increased private sector interest rates in Ireland. If Ireland is delirious with credit demand then why has a seller's market in credit not inspired Irish banks and bond buyers to demand higher interest rates? Is there something unique about Ireland or are all peripheral countries likely to experience this effect?
Could this be the logical effect of an "evening out" of economic conditions in Europe? Are there, in fact, structures in place that *will* even out economic conditions within the Euro-zone? Will Irish Euro-denominated credit be treated differently (as it probably should be) by traders within the Euro-zone?
I'm looking for any opinions here.
Yours as ever,