7th EU Commission Staff Review: Ireland (Draft)

later12

https://www.documentcloud.org/documents/414236-european-commission-staff-review-of-ireland.html

Main points

• Programme implementation remains strong overall ; esp. central government cash deficit.
• Competitiveness is increasing ; current account surplus is growing
• expenditure over-runs on Health & Welfare, but overall overrun balanced by higher revenues than profile. Corrective steps agreed ; some of the health measures will have to be permanent to reach consolidation targets
• 2012 fiscal deficit estimated at 8.4%.GDP (ceiling 8.6%)
• Special targeting of social welfare schemes and of broadening tax base encouraged for Budget 2013
• Criticism of open-ended unemployment benefits & work disincentives
• Banks' profitability still a challenge ; phasing out of ELG scheme underway
• Deleveraging making good progress, except in PTSB ; funding gap remains high:

• Funding challenge & weak demand for credit in some areas leading to low net lending.
• Rate of growth in mortgage arrears falling off slightly (1.5% down to 1.3% q-o-q)

Outlook:



The other significant feature of the report, as widely reported, is the attention it gives to the Health sector, where it refers to "a failure to manage certain services within approved levels..." and say that "weaknesses in budget management and accountability" are suggested by "inability to deliver efficiency savings in the decentralised healthcare system".

Overall the report is a positive one, although there is more of a focus on penalising the low rate of exit to employment/ lack of engagement with activation measures as opposed to any suggestion or reference to Eurostat's vacancy rate for Ireland, which suggests there are about 28 unemployed individuals for each vacancy. It's not quite clear what the EU Commission has in mind once these financial penalties have been applied to jobseekers.

Since the review finds that Ireland is keeping on track, the state is now set to draw down €2.6 billion in loans from the ESFS, EFSM, IMF and bilateral instalments from the UK, Sweden & Denmark.

Health warning: This is only a draft review, not yet approved for publication. Leak appears likely to have come from an Irish source as opposed to the Bundestag this time, having been leaked just a few hours after the draft was sent to TDs on the Finance Committee.

Solair

Overall the report is a positive one, although there is more of a focus on penalising the low rate of exit to employment/ lack of engagement with activation measures as opposed to any suggestion or reference to Eurostat's vacancy rate for Ireland, which suggests there are about 28 unemployed individuals for each vacancy. It's not quite clear what the EU Commission has in mind once these financial penalties have been applied to jobseekers.

I would suspect the commission doesn't really care and is just locked into some kind of mantra that we're not working because we're not being incentivised enough.

If we kick people off benefits and there are really no jobs it's a recipe for social unrest, riots and dire poverty.

Doesn't really make sense.

I would however think that if people can't find a job within say 18 months, then they really need to be pushed back into education / training / upskilling a.s.a.p.

Perhaps the commission is intent on causing mass emigration or something? Who knows?

I'm not sure they even know themselves. They come across as a bunch of technocrats who lack any kind of holistic view of the economy.

Count Dooku

More needs to be done to alleviate or eliminate work disincentives and unemployment traps caused by some features of Ireland's benefits system (e.g., the broadly flat and open-ended unemployment benefits that do not diminish with the duration of the unemployment spell) and the recent move to de-couple housing support from unemployment status should be further advanced.

i.e. something must be done with jobseeker allowance