In the euro zone, Greece’s debt drama has been stealing most of the headlines. But away from Athens, there was a rare batch of good news out of euroland today. Even more encouraging, it came from two of the currency union’s former basket cases: Ireland and Spain.
Based on recently revised numbers, the Irish economy grew by a whopping 6.5% in the first quarter of this year, versus the same period last year. Growth for 2014 as a whole was also bumped up to more than 5%. That means Ireland, which needed a €85-billion (then $116-billion) bailout in 2010, is on track to record the fastest growth in Europe for the second year running.
In Spain, second-quarter GDP rose at a 3.1% annual pace (pdf), its best result since 2007. Like Ireland, Spain was savaged by an enormous property boom-and-bust cycle, forcing it to take a €41-billion bailout for its banks in 2012.
This is not evidence, of course, that the bailouts were roaring successes. Ireland’s banks aren’t exactly healthy and Spain’s unemployment rate remains above 20%. Ireland’s economy only recently surpassed its pre-crisis peak, while Spain still has a ways to go:
It could be worse—Greece’s economy is 25% smaller than it was at its peak. Granted, neither Ireland nor Spain was forced to impose austerity as severe as Greece in return for their bailouts. And the Irish and Iberian economic ills stemmed more from private debts linked to property than the runaway public borrowing and resistance to reform seen in Greece.
Still, both Ireland and Spain have won plaudits for taking steps to liberalize their economies since they were pushed to the brink. Nothing is black and white, of course, but the latest numbers add a little nuance to a debate that has recently pitched the euro as a one-way ticket to doom.