The government of Mr Ahearn had promised it wouldn't go above 5pc or so and stitched the unions up with an agreement last March to keep wage increases to about 5.5pc over three years. Well, those union leaders are far from impressed and are demanding the same again now, with whatever it takes later to keep up with this much faster inflation. The opposition has demanded the recall of the Dail and so on. It was always going to be a rough ride. When the euro was launched in January 1999, Ireland was already overheating, with a growth rate of 8pc for the sixth year in a row.
New products can command better prices than old ones in world markets.
On top of this, because productivity is bound to be growing far more slowly in the more staid domestic market sectors, prices there will rise still faster. But on top of this Ireland is the euro's prize diverger. Ireland needed rates at least as high as ours, probably higher in the 8-10pc range, to control the dizzy growth of its demand. Then the euro fell in order to stimulate poor continental competitiveness. This meant still higher prices in punts for its already popular Irish traded products and a further demand stimulus.