“Too much” is a very vague term. It would be more accurate to say “What happens when people don´t want to lend to governments anymore”. Nonetheless, if a debt or a deficit is perceived to be too high, a country needs to borrow less, spend less and/or grow more. These are very difficult options.

For Ireland this meant higher income taxes, higher VAT, lower public salaries, higher retirement ages, lower capital spending and less state support for the elderly and children. Tough medicine to be sure, but I´m proud to say we had the stomach for it, unlike lots of other (mostly Mediterranean) countries that should be taking similar measures.

France is a good example. There was a massive public uproar recently when the retirement age was increased … to 63 years ….in small increments between now and 2018. They´re getting no sympathy from me!

Germany, on the other hand didn´t need to do anything nearly as extreme as the Irish because they are a conservative and prudent economy with low wages and high productivity. Between 2001-2006 they were drinking diet cokes while the Irish, French, British and Spanish were downing straight whiskies and margaritas. Their finances were fine and thanks to their awesome economy they can grow their way out of a recession a lot quicker than everybody else.

These are among the reasons we´ve started promoting multi tenanted German properties in key locations.

Feel free to call or email me (investments@torcana.com) if you´d like to learn more.

Kind Regards

Colin Murphy

Tags: Austerity Measures, Irish government, Torcana

This entry was posted on Wednesday, July 21st, 2010 at 3:19 pm and is filed under General Opinion, German Property. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.