An article in the latest New Statesman outlines the economic and fiscal policies of Fianna Fáil that has us where we are today.
[…] The cuts announced in December aim to reduce state spending by €4bn this year, but the overall plan is to slash it by €15bn within four years. As total expenditure by the Dublin exchequer was just under €60bn last year, this means that the Irish state is set to shrink by a full quarter in less than half a decade.
At least two generations look destined to pay a painful price for the follies of the golden circles whose scams, swindles and con jobs have lumbered Ireland with zombie banks that make RBS and HBOS look relatively vibrant. Anglo Irish alone may swallow over €30bn of public cash, equivalent to the total revenues collected by the Irish exchequer in the whole of last year.
[…] Dublin’s fragile coalition government seems far more spooked by the danger of international investors downgrading their country’s credit rating (which would make the cost of borrowing substantially higher) and the spectre of the IMF seizing the financial reins. Dublin is determined to distinguish Ireland from Greece, whose continued profligacy threatens to destabilise the entire eurozone.[Additional Reading: Greece calls in IMF to help sort out massive debt]
The NS piece is a decent potrait of recent events, albeit one written for an audience not heavily informed on current affairs in Ireland. (Though I’ve never heard an Irish politician being referred to as “Iron Brian”).
The description of Boom-time Ireland as “a land of spivs and speculators and a manufacturing outpost for American multinationals” is concise and accurate. As is the comment “Ireland’s economic miracle was always somewhat hallucinatory, because these US firms… used it as an Atlantic tax haven and route to the EU marketplace”.
One also has to agree “most welfare recipients probably won’t be any worse off [following the Decemeber budget], as the slight fall in their benefits will be offset by the steep fall in prices that Ireland is now experiencing”. Though I would note ‘most’ is a numeric term in this context. AK comments on this topic below…
Unfortunately, the New Statesman writer has missed (or ignored) the recent u-turn on elements of the ‘progressive’ pay cuts proposed for the public sector, which would add some context to that paragraph. Overall though, worth the read, and a damning verdict on the Irish Government of the last decade from an influential overseas magazine.
Guido‘s comment on the piece is, as some would expect, a slanted simplification of the situation (can’t Ireland and the UK both be in economic meltdown concurrently?) which misses the point entirely to get a cheap dig in at the British Government. Suppose, can hardly blame him, they haven’t exactly covered themselves in glory over there either.