Thursday, 10 November 2011

Greece and Ireland : flow of funds edition

Just a quick post today. I was curious to see what selected Balance of Payments data show about Greece. It is undoubtable that funds are flowing out of Greece. But what about Ireland? They are in a crisis as well so their fate must be similar to ours, right? Well, wrong...

Look at the following chart about Portfolio Investment. Ireland is depicted in the left hand scale while Greece is shown in the right hand scale.

source: Eurostat

Funds are indeed flowing out of Greece while outflows from Ireland have halted.

Now let's look at inward foreign direct investment (FDI) flows for the two countries. 

source: Eurostat

Again the situation in Ireland is exactly anti-diametric from the one in Greece.

I don't know if this trend will keep, since things internationally are at best shaky and fragile (and we know that international flows are easily reversible and volative) but its presence indicates that crises do not play out the same way for all countries. Of course this is not attributable to fate or luck...

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