A year in which we escaped the worst
Disasters such as a euro meltdown and deeper dive into recession did not occur. There is room for optimism
It could have been worse – much worse. That, more than anything else, sums up 2012. The euro did not collapse. The Irish economy did not slump back into recession. Europe’s downturn had limited knock-on effect here (thus far at least).
No supplementary mini-budget had to be implemented. Hopes of relief on the State’s bank debt weren’t scuppered, nor was the chance of exiting from the bailout next year extinguished.
If most of the serious economic risks at the beginning of 2012 did not materialise over the course of the year, the biggest political risks were avoided too.
Nowhere in Europe did political extremists advance electorally – in Greece they were kept out of power; in France they remained on the margins; and in the Netherlands voters threw them out of the multi-party coalition in the autumn.
That moderates held the line on the continent does not guarantee a way can be found out of the euro crisis, but it lessens the chances of the project being ripped apart for purely political reasons.
The centre holds
At home, voters took no chances either, deciding against shooting down the fiscal treaty on May 31st. Nor was there much sign of the political centre giving way more generally. Over the course of the year, opinion polls showed support for the three mainstream parties holding remarkably steady. If street protests were anything to go by, Irish people are far more exercised by abortion than by austerity, which they continued to take in large doses with little sign of revolt.
Further afield, war in the Middle East over Iran’s nuclear bomb-making programme at times appeared imminent in 2012. Conflagration in that part of the world would have sent oil prices soaring. Peace – of sorts – was maintained.
Another risk to the global economy was a slump in China. That, too, was avoided.
In the US, Tea Party-backed candidates fared as badly in congressional elections as their reactionary counterparts in Europe. Among other things, and most immediately, that has made the fiscal cliff negotiations less fraught than they would otherwise have been.
The story of the year just ending, then, has been one of bullets dodged. In times as trying as these, it may be our lot just to be thankful that risks don’t come to pass.
Footprint on the future
But dodged bullets are soon forgotten. The year ending may well be remembered more for how decisions taken will influence the future than how they impacted the year in which they occurred.
A banking union for the euro zone was agreed in mid-summer and it became increasingly obvious that the next change to the EU’s treaties will have to create something akin to a united states of Europe if the euro is to last.
These developments added even greater momentum to the drive to withdraw Britain from the EU. David Cameron’s government this year finally relented to the now mainstream Eurosceptics and committed to holding a near-unwinnable referendum on his country’s relationship with the EU.