With the Irish election out of the way, three distinct but interconnected challenges need to be addressed. The first is to boost weak growth prospects, which are effectively dependent on external demand. The second is to resolve the banking crisis, with around €150 billion owed by Irish banks to the Central Bank of Ireland and the ECB and the cost of recapitalizing the banks standing at around 36% of GDP. Finally, the Irish state must restore fiscal sustainability to be able to regain access to private markets.
Unfortunately, a significant rise in emigration in 2010 could make these[...]