I recently attended arguably the most star-studded gathering of finance directors in all the time I’ve been working on this magazine. This dinner was hosted by the former chief economist of one of the world’s biggest investment banks and he had the full attention of all 198 FDs and CFOs in the room. The gem of this guy’s speech came at audience questions when one FD asked him what the chances of a bailout for Ireland were. Without hesitation, he told us he expected a package to be confirmed within the next week – for both Ireland and Portugal.
The economist’s prediction has already come to fruition – well, half of it has. On 18 November, Patrick Honohan, governor of the Irish Central Bank, said he expects Ireland to accept a loan of “tens of billions” of euros. Portugal appears to be next in line.
Talk about change being the only constant: we’re almost used to seeing systemically vital institutions hit the wall at the speed of light, going from being slightly troubled to the property of the International Monetary Fund in a microsecond. Now it seems Ireland might be the new Iceland, though the FD’s dinner was the first time I’d heard someone say that Portugal was really, really about to bellyflop into the arms of the IMF.
So even though the stats say the UK is out of recession and in to slow growth, we end the year as we started, with regular shocks and great uncertainty around even the solvency of our neighbours. Who would dare hazard a guess at what 2011 holds – except a booming Q3 for ebay flogging knock-off Prince William/Kate Middleton wedding memorabilia. Perhaps the royal nuptials will provide us financial types with very temporary respite from what might well be another crazy year.
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