Ireland is no model for Greece
(...)
Over €30bn (£21bn) in austerity measures were introduced – public spending cuts and tax increases (mostly the former), over 15% of GDP. But for every €3 of austerity measures, the deficit was reduced by only €1. Two-thirds of austerity went to destroy Irish social and economic life, with unemployment, poverty, liquidations, suicides …
More than 30% of Irish people live in deprivation, according to the government’s own statistical agency, not far below Greece’s 37%. Over 40% of children suffer deprivation experiences. One in 10 people is at risk of food poverty – hunger.
A falling unemployment rate would normally be a signal of things coming right. But in Ireland, this disguises another social blackspot: emigration. For each person taking up a job in the last three years, two people of working age emigrated. One in seven young people has left the country.
What about growth? Irish headline growth rates are highly suspect given the impact of foreign multinationals. The Irish Fiscal Advisory Council recently estimated that half of Ireland’s strong GDP growth in 2014 was a statistical fiction, while Ireland’s Central Bank said a substantial proportion of growth was due to our low-tax financial services centre, which scarcely touches the domestic economy.
Alternative measurements of the Irish economy – which seek to remove the impact of foreign multinational accountancy practices (that is, aggressive tax avoidance) – show the recession to have been much deeper and the recovery more muted. It also shows that Ireland has a considerable debt crisis: public debt, largely driven by the property and speculation crash, is 125% of GDP.
There’s another trick hidden in Ireland’s numbers. Alone of all EU countries, Ireland is the beneficiary of a fairly secret but very real policy of monetary financing. While potentially illegal and certainly opposed by ECB and EU policy, Ireland is actually paying off a substantial part of its debt to itself: Ireland’s Central Bank took over the debt of the infamous Anglo Irish Bank, whose speculative excesses cost the Irish economy nearly 20% of GDP when it became insolvent.
http://www.theguardian.com/world/economics-blog/2015/jul/10/ireland-no-model-greece-troika-austerity
(...)
Over €30bn (£21bn) in austerity measures were introduced – public spending cuts and tax increases (mostly the former), over 15% of GDP. But for every €3 of austerity measures, the deficit was reduced by only €1. Two-thirds of austerity went to destroy Irish social and economic life, with unemployment, poverty, liquidations, suicides …
More than 30% of Irish people live in deprivation, according to the government’s own statistical agency, not far below Greece’s 37%. Over 40% of children suffer deprivation experiences. One in 10 people is at risk of food poverty – hunger.
A falling unemployment rate would normally be a signal of things coming right. But in Ireland, this disguises another social blackspot: emigration. For each person taking up a job in the last three years, two people of working age emigrated. One in seven young people has left the country.
What about growth? Irish headline growth rates are highly suspect given the impact of foreign multinationals. The Irish Fiscal Advisory Council recently estimated that half of Ireland’s strong GDP growth in 2014 was a statistical fiction, while Ireland’s Central Bank said a substantial proportion of growth was due to our low-tax financial services centre, which scarcely touches the domestic economy.
Alternative measurements of the Irish economy – which seek to remove the impact of foreign multinational accountancy practices (that is, aggressive tax avoidance) – show the recession to have been much deeper and the recovery more muted. It also shows that Ireland has a considerable debt crisis: public debt, largely driven by the property and speculation crash, is 125% of GDP.
There’s another trick hidden in Ireland’s numbers. Alone of all EU countries, Ireland is the beneficiary of a fairly secret but very real policy of monetary financing. While potentially illegal and certainly opposed by ECB and EU policy, Ireland is actually paying off a substantial part of its debt to itself: Ireland’s Central Bank took over the debt of the infamous Anglo Irish Bank, whose speculative excesses cost the Irish economy nearly 20% of GDP when it became insolvent.
http://www.theguardian.com/world/economics-blog/2015/jul/10/ireland-no-model-greece-troika-austerity
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