Constantin Gurdgiev Gives Council His Views on the Economic Crisis

The well known economist, Dr Constantin Gurdgiev, shared his thoughts on the Irish economy with the IEA Food and Drink Council at the quarterly meeting on Wednesday 9th February 2011 in Teagasc Ashtown, Dublin 15. He gave a detailed overview regarding the genesis of the current fiscal crisis and he believes the roots causes of our current predicament go back over a decade.

He said that we were in unchartered waters and compared and contrasted our situation to Greece and Portugal. We have strengths that they don't have but we also have greater weaknesses, so we're more extreme than they are. Greece, he said, has the highest debt on the exchequer side but low debt on the banking side. Portugal is healthier on the exchequer side and their banks have lower debt.

Regarding GDP, the growth projection is around zero, according to Constantin, which is more realistic (and negative) than the projections of the Department of Finance and the ESRI.  With regard to GDP, we have lost 6 years, he says, which is the equivalent of a 'moderate sized war' and GNP has gone back even further to 2003 levels. The trade balance is very positive with a strong growth in exports and a collapse in imports but he doesn't believe this is strong enough to get us out of the present hole.

In summary he does not see any signs of an improvement in the next year to 18 months. 

Seán Hanifin of First Ireland Spirits also spoke at the meeting and gave an overview of this business and the customers it supplies in overseas markets. He outlined the opportunities for First Ireland Spirits and some of the threats facing them.

Finally Bobby Love of Landmark Haulage spoke about their haulage business.  He gave background information on the business, who their key customers were and the service they provide to food and drink companies.

There was a closed session at the end of the meeting for 10 minutes.  The meeting started at 11am and finished at 1.30pm.

Please note the next meeting will be on Wednesday May 11th in the same venue.