March 29, 2024

Ireland Said to Face Downturn in 2nd Year of Austerity

Ireland cut its deficit to about 10 percent of gross domestic product in 2011 from 32 percent in 2010, the year that a government plan to bail out six of the country’s largest banks inflated the deficit, according to the report by the European Commission, the European Central Bank and the International Monetary Fund.

The Irish economy will grow only about 0.5 percent this year, down from a forecast of 1.1 percent just two months ago, as the country’s troubles keep unemployment high and prompt Irish consumers to tighten their purse strings, the report said.

But the reduction in the deficit is striking, and Irish officials hope it will persuade investors that Ireland is once again becoming creditworthy enough to borrow in financial markets as soon as next year at interest rates the country can afford.

Ireland had to take a bailout of 67.5 billion euros (about $87 billion) from international lenders in November 2010 after investors, fearful of the country’s deteriorating finances, drove borrowing costs above 8 percent, about the same levels that led Greece to take a bailout a few months earlier. By contrast, Ireland is paying only 3.3 percent on the bailout money it receives.

Michael Noonan, Ireland’s finance minister, struck an upbeat tone, saying in a statement that the report “illustrates the ability of the Irish state to implement a challenging program effectively.”

The report was issued as European leaders, like Mario Monti, Italy’s new prime minister, and President Nicolas Sarkozy of France are starting to argue that austerity alone is not an answer to Europe’s financial problems.

While the financial markets had an outsize influence in pressuring European leaders to embrace austerity as a way out of the sovereign debt crisis, there has since been a shift in sentiment. Now, investors are increasingly worried that too much austerity is hampering growth, creating a vicious cycle that will make it harder, rather than easier, for Ireland and other weak euro zone countries to pay down their debts and deficits.

This week, Mr. Sarkozy met with French unions and business representatives to discuss how to improve the country’s competitiveness, increase growth and create jobs. In Spain, the new government is forging ahead in changes to labor laws, including trying to reduce wages, in a bid to bring investors back.

Mr. Monti recently told Chancellor Angela Merkel of Germany that if the Italian government were restrained from stoking growth, Italians could soon march in greater numbers in the streets against a multibillion-euro austerity plan that Germany and others want the country to embrace in a bid to avoid Ireland’s fate.

Ireland has been held up by Germany and other European countries as a model of how to tackle austerity. The country had a small growth spurt last year after three years of contraction, largely because of a surge in exports from pharmaceutical companies, which have a strong base in the country because of a low corporate tax rate of 12.5 percent.

But the rise in exports was not accompanied by huge numbers of new jobs. And a worsening economic environment in Europe — the region is expected this year to experience its second recession in three years — is likely to slow the pace of Irish exports.

Despite the progress in reducing its deficit, “Ireland nonetheless faces considerable challenges,” the report from international lenders said.

Article source: http://feeds.nytimes.com/click.phdo?i=7c91237d6a8d8028657d872ea46eb3d6

Corner Office: What’s the Mission? Your Troops Want to Hear It From You

Q. What were some big influences for you early on?

A. Certainly my parents. Their view was, whatever you want to do, we’re fine with it. I wanted to major in theater. They said: “Fine, that’s terrific. Go for it.” And they were incredibly supportive. And my father told me, “Don’t ever say no to anything.” That is always in the back of my mind, and it’s something that I use in leadership, too. You’re presented with an opportunity. Maybe you’ve never taken on a challenge like that before. But don’t say no. You take that leap and you take that risk.

Q. How has that played out in your life?

A. I went to film school. I’m running a company now. How do those two things connect? I’m a storyteller. I love telling stories. I love listening to stories. I feel like the business that we’re in is storytelling. And in filmmaking, I was really involved in managing the process, putting the pieces together. My business is like that today. It’s a lot of different pieces. We have a lot of different kinds of people who work together. It’s a very team-based environment.

Q. What kind of films did you work on?

A. I was the producer on anything from documentaries to corporate videos to commercials. I did it all. I held the purse strings, made sure that all the schedules were set, worked with the directors. I love to be around creative people. I’m very good at managing the chaos and pulling it all together to make something that’s really tangible and creating that environment where people can thrive.

Q. What were your leadership roles in high school?

A. I was involved in theater. I worked on the newspaper. I did speech. I was always a very outgoing personality, and I think outgoing people have natural leadership capabilities. I remember reading an article that said that the No. 1 fear that people have is public speaking, and the second fear they have is death. But I have never had a fear of public speaking. It was something that just came very naturally to me.

Q. When you first joined Frog Design, how big was the company?

A. Fifty people. We’re 600 now.

Q. What were some leadership lessons for you as the company grew?

A. I think that what creative people want, more than money or fame or power, is to be listened to. They want to see their ideas be made into something. They love when something we work on actually goes to market. That’s more exciting to them than anything else you can give them. So it’s very important to get really, really interesting projects, with hard problems to solve. They might say, “Oh, this is so difficult.” But at the end of the day, they really love that.

Part of this is just having, I think, an instinctual knowledge of people. I’m a people person. I like people very much. My mom always said I should have been a psychologist, because I can read a person pretty quickly and I have a lot of empathy for people. So I kind of pick up where there are weak points and use that. So part of this is just using your instinctual knowledge to make it work, and sometimes you fail. But that’s part of innovation. You fail fast. You move on.

Q. Can you talk more about the culture of your company?

A. The small things matter. We have many rituals. One is something called coffee time: every day at 4 o’clock, in every one of our studios around the world, everybody stops and they have the opportunity to go into the kitchen and people just socialize. They might play a game of Ping-Pong, they might play a video game, and there are pool tables, foosball. Different studios have different toys. That’s a ritual and that’s just accepted. That’s what we do.

Q. Why do you do that?

A. These are intense people. This is a time for them to take a break, to talk to people they might not work with, and to listen to things. That’s every day, Monday through Friday. We often joke that if we ever took coffee time away, we think everybody would quit. And we have 10 o’clock Monday-morning meetings at every studio, where they go over anniversaries, birthdays, projects, and share stuff that another studio has done. That’s something that’s really important to people.

Article source: http://feeds.nytimes.com/click.phdo?i=6c92bb5e636eb979e2638f74a2ec0ffb