It’s been a strange week. At home, the headlines have been about a €9 billion projected budget surplus this year and those €500 Ryder Cup tickets – another symbol of Ireland’s high-cost economy. Internationally, the Middle East crisis drags on, oil prices swing around, the EU announces emergency measures, and there are increased concerns about the longer-term impact on international energy markets and the world economy.

The Irish economy, meanwhile, seems to operate in some kind of bubble. Sure, fuel prices have risen, triggering the recent disruptive protests. But the official forecasts this week were of continued growth and surpluses. If, in a severe scenario, oil prices were to rise to average $150 a barrel heading into next winter, they said, the economy would still keep growing, even though inflation would be running at close to 7 per cent by the turn of the year.

Meanwhile, the forecast for the surplus of State revenue over spending this year – increased to €9.2 billion, from €5.1 billion on budget day – is really significant. Ireland was one of only five EU countries in surplus last year; on average, EU governments are borrowing close to 3 per cent of national output, while Ireland’s is in surplus by not far off the same amount.

The national debate continues as if Ireland’s economic exceptionalism can be taken for granted. Other EU countries are scrambling to hold down borrowing – just look at France – while also reacting to the energy shock. In Ireland, normal transmission continues. Budget Ministers Simon Harris and Jack Chambers compete to support budget income tax reductions, while from the Taoiseach down, the Government is making no secret of its plan to do more to respond to the energy crisis. The only question is whether they can hold out until budget day. Talk of keeping the........

© The Irish Times