Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

More ‘Beautiful Freak’ Than ‘Poster Child’: Ireland’s Dramatic Rebound

Bill Roche, Philip O’Connell and Andy Prothero 13th March 2017

roche bio

Bill Roche

Ireland’s dramatic recovery from its severe and prolonged economic crisis has led to the country being regarded as a ‘poster child’ for economic regeneration from fiscal austerity. The Irish case has been widely hailed by the Troika institutions as evidence that where a country stuck closely to prescribed austerity measures, the fiscal disciplines and structural changes involved could provide the platform for stability and a return to growth and prosperity. During the 2015 Greek crisis, figures in the Irish government openly sought to persuade beleaguered Greek colleagues that they should emulate Ireland’s example and would reap the same benefits. However, economist Stephen Kinsella suggests in a recent book we edited that Ireland is best seen less as a ‘poster child’ than as a ‘beautiful freak’, whose experience of austerity and recovery reflects a very specific set of conditions that differ markedly from other countries forced to avail of bailout supports.

oconnell bio

Philip O’Connell

Troika assistance to Irish banks, allied with restructuring and regulatory reform, contributed to financial stability and restoring international confidence. Fiscal consolidation was necessary but the key driver of economic recovery was the export performance of multinational firms, trading in international markets in major economies that had been the least seriously affected by the Great Recession and that had recovered most rapidly. Ireland’s export performance more than offset the serious dampening effects of austerity cutbacks on domestic demand and on Irish businesses. The platform for recovery was in fact built over decades of industrial and economic policy.

prothero bio

Andy Prothero

Other special features were also critical in contributing to stability and recovery. These were not and could not be replicated elsewhere. The main Irish political parties had near consensus on the need for austerity. Public service trade unions contributed to stability by accommodating fiscal retrenchment and accepting significant cuts in pay and employment. This avoided the industrial conflict experienced by other countries implementing austerity measures. Peaceable industrial relations were maintained across the private sector, where cuts in nominal pay were far from widespread and employers focused on reducing working time and employment.

In their dealings with the Troika, senior ministers and public servants focused pragmatically on meeting targets and getting out of the bailout programme as fast as possible, thus avoiding the kind of volatility and political theatre evident in Greece. Overall levels of social expenditure were maintained as buffers against unemployment and rising demand for social services in areas like health and education, while emigration, as so often before, worked as a safety value against social dissent.

The economic crisis gave rise to calls for reforms across a range of policy areas. Many of these were initiated by the Irish authorities and already in train before the Troika’s arrival. These were areas of reform which arguably met with the highest levels of success, as for example in restructuring the financial institutions and in financial regulation. In response to the banking crisis, which threatened the solvency of the sovereign, there was a ‘paradigm shift’ in the regulatory approach which became more challenging and intrusive, entailed greater enforcement, and became more refined in terms of its capacity to assess risk. The establishment of the National Asset Management Agency (NAMA) as a ‘bad bank’ for managing the property assets of failed banks prevented survivors becoming ‘zombie banks’, and it ended up turning a modest profit.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

Reforms elsewhere were more varied. Political processes had been widely blamed for contributing to the property bubble, the banking collapse and the fiscal crisis, but radical political reform did not take place, despite the landslide election of 2011 which brought an ostensibly reformist government to power. While transformative structural reforms were proposed for the public sector, they have been slow to materialize, and most have attempted to reinvigorate earlier abortive efforts at reform. Reforms in labour market policy, which took the form of a shift to more active intervention to assist the unemployed, were deferred until 2011, well into an unemployment crisis which was already four years in the making. Within the housing sector policy contributed to the financial crisis, but economic recovery has created yet more dysfunctions within it, and policies to alleviate emerging shortages and escalating costs have failed miserably.

The costs of austerity were widespread and felt across all aspects of Irish life. Unemployment soared, with long-term consequences for men, young people and migrants, and emigration increased dramatically, with the emotional loss significantly felt by families, friends and local communities. For those who stayed, the country witnessed increases in mental health problems, including rising numbers of self-harming incidents and of suicides by men. Culture suffered, both in terms of funding cuts to the arts and in the numbers attending cultural events, although these did stabilize during the recovery. The economic costs of the Great Recession saw median disposable income falling by over 16% between 2008 and 2013; this not surprisingly had knock-on effects in terms of significant decreases in personal consumption as well as in consumer confidence. Figures from the Central Statistics Office demonstrated that just over a quarter of the population was lacking two or more basic necessities, such as heating, the ability to buy meals or to have proper clothing in 2012; and the country witnessed significant increases in relation to basic deprivation and consistent poverty.

The book was completed before the UK voted to leave the EU, but identified Brexit as a significant risk to continued recovery and growth. Other risks included growing criticism of Ireland’s corporation tax regime – likely to be further amplified by a shift to ‘protectionism’ in the US – rising industrial conflict and the continuing housing crisis.

Bill Roche, Philip O’Connell and Andy Prothero

William K. Roche and Andy Prothero are Professors at the School of Business, University College Dublin. Philip J. O'Connell is Director of the UCD Geary Institute for Public Policy. Their edited volume, Austerity & Recovery in Ireland: Europe’s Poster Child and the Great Recession, is published by Oxford University Press.

You are here: Home / Economy / More ‘Beautiful Freak’ Than ‘Poster Child’: Ireland’s Dramatic Rebound

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

Pakistan,flooding,floods Flooded Pakistan, symbol of climate injusticeZareen Zahid Qureshi
reality check,EU foreign policy,Russia Russia’s invasion of Ukraine: a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger
sustainability,SDGs,Finland Embedding sustainability in a government programmeJohanna Juselius
social dialogue,social partners Social dialogue must be at the heart of Europe’s futureClaes-Mikael Ståhl

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube