Looks like the austerity schemes were the right answer

snow scorpion

Only Luxembourg is doing better than Ireland in the Euro zone.

http://qz.com/479937/the-euro-zones-pathetic-economic-recovery-in-eight-pitiful-charts/

Taxburden carrier

Lies, damned lies and statistics....

johnnyskeleton

Mod note:

This is not a news dump. If you dont have any analysis of your own to add im closing the thread.

That goes for the witty quips about statistics too

FreudianSlippers

It attempts to be a fairly "damning" article, it's not clear what the underlying issue is with regard to stagnation. In fairness to the EZ, growth is growth... the only thing that these statistics scream to me is that perhaps the QE wasn't aggressive enough.

The other take-away is Greece. Dear god:

Villa05

snow scorpion wrote:

Only Luxembourg is doing better than Ireland in the Euro zone.

Genuine question. What was the reason for the recovery.
A. Austerity
B. Mario dragi 's interventions.

I would argue b 90% a 10%

In fact a lot of A may have delayed the recovery as it was targeted at the weakest and not enough in the areas that were adding costs to the economy such as useless quangos

BoJack Horseman

Villa05 wrote: »

In fact a lot of A may have delayed the recovery as it was targeted at the weakest and not enough in the areas that were adding costs to the economy such as useless quangos

I'd like to see some data to back that up.

Borrowing to feed current expenditure & using this to masquerade as true growth is a proven fallacy.

There is no escaping the fact that the €12bn primary deficit inherited by the government had to be fixed.

Too many fell for the lie that you can eliminate a deficit without deep spending cuts or tax rises.

But you are right, expenditure cuts partly fell in the wrong area, but we know that Liberty Hall has as much say there as Leinster House.

The economy started to recover from Q3 2013.

I'd like to see proof that reducing borrowing of €12bn @6-ish% to run the state delayed a recovery that took just 2.5 years anyway.

FreudianSlippers

Villa05 wrote: »

Genuine question. What was the reason for the recovery.
A. Austerity
B. Mario dragi 's interventions.

I would argue b 90% a 10%

In fact a lot of A may have delayed the recovery as it was targeted at the weakest and not enough in the areas that were adding costs to the economy such as useless quangos

If your argument is that balanced (or more balanced books) don't necessarily mean that recovery will follow, I don't disagree.

However, it's flawed logic in the case of Ireland as balanced books (really reduction in debt/GDP ratio) was a requirement of the Toika MoU without which, I don't think many would be able to provide evidence to suggest that we'd still be in the same "rosy" position. All signs point to a more Greece-like scenario.

Villa05

Villa05 wrote: »

Genuine question. What was the reason for the recovery.
A. Austerity
B. Mario dragi 's interventions.

I would argue b 90% a 10%

In fact a lot of A may have delayed the recovery as it was targeted at the weakest and not enough in the areas that were adding costs to the economy such as useless quangos

Can you give an example of which interventions Mario Draghi (who became president of the ECB on 1/11/11) you might suggest make up 90% of the factors of Ireland's recovery thus far?



Direct QE? - What was the date when the CBI started buying bonds?

Export Boosts due to weaker currency due to QE? - Does the weaker Euro (vs Dollar, vs GBP) pre-date recovery?

Or something else? Any factor would necessarily have to pre-date Ireland's growth, or at least have been 'known' before Ireland's recovery started for us to consider it imo.

golfwallah

snow scorpion wrote: »

Only Luxembourg is doing better than Ireland in the Euro zone.

http://qz.com/479937/the-euro-zones-pathetic-economic-recovery-in-eight-pitiful-charts/

With respect, these statistics do not demonstrate a direct causal link between austerity and the recovery in Ireland’s economy. In Ireland’s case, it is very tempting for EU policy makers (and Irish politicians in the lead up to elections) to link austerity and economic growth for propaganda purposes, but this has not been supported by critical analysis.

Certainly there has been an improvement in GDP but this is down to many factors, the most significant, according to this article, being the direct consequence of export led, high-tech economic activity in the state (IDA) encouraged Foreign Direct Investment sector:

Dr. Aidan Regan argues that the Irish recovery has nothing to do with the Troika-led adjustment of austerity and everything to do with the path dependent effect of a state-led developmental strategy.
Let’s unpack the official story. The European Commission argue that the Irish recovery is an outcome of the governments successful implementation of their structural adjustment program. This technical adjustment can be explained as follows. Ireland had to increase taxes and implement radical cuts in expenditure to bring down its fiscal deficit. Given that Ireland had lost competitiveness during the 2000’s (measured as increased labour costs), wages also had to be reduced. A reduction in wages and public expenditure negatively impacts domestic demand. But this negative effect is offset by the positive effect on exports. A strong state commitment to macroeconomic stability and improved cost competitiveness improved the real exchange rate (REER) and facilitated an export-led recovery. To put it simply, a growth in external demand (consumers outside Ireland buying more Irish produced goods and services) compensated for a contraction in the internal demand caused by austerity (Irish consumers, households and government spending less). It’s the German model of adjustment: commit to macroeconomic stability, compress domestic demand and expand exports.

I’d agree that there was (and still is) a need for government to take action to bring expenditure more into line with income. But this alone is not the reason for the current recovery in GDP – Ireland has to sell as well – through exports – an activity in which long running IDA’s policy implementation has been a lot more significant than relatively short run current government’s implementation of austerity. In this regard, the IDA has served us well and put us in a much stronger position to recover economically than countries such a Greece that do not have similar export led capabilities.

Godge

Villa05 wrote: »

Genuine question. What was the reason for the recovery.
A. Austerity
B. Mario dragi 's interventions.

I would argue b 90% a 10%

In fact a lot of A may have delayed the recovery as it was targeted at the weakest and not enough in the areas that were adding costs to the economy such as useless quangos

Pensions were not cut at all.

Social Welfare suffered minimal cuts compared to the rest of the expenditure budget.

I would really like to see somebody explain with hard facts rather than rhetoric how austerity targeted the weakest.

Arguably by creating the conditions for growth and the creation of jobs, it did the opposite as those who were without jobs are benefitting the most from the recovery.

beeno67

Godge wrote: »

Pensions were not cut at all.

Social Welfare suffered minimal cuts compared to the rest of the expenditure budget.

I would really like to see somebody explain with hard facts rather than rhetoric how austerity targeted the weakest.

Arguably by creating the conditions for growth and the creation of jobs, it did the opposite as those who were without jobs are benefitting the most from the recovery.

I would partially agree with you. However the part where you say those who were without jobs are benefitting the most from the recovery is not really true. In many cases those without jobs were actually those with jobs who lost their jobs thus suffering the most. We also seem to look at unemployment as linear, so, unemployment falls from 11% to 10% implies that approximately 10% of those who were unemployed are now employed but this hides the reality. In many cases people are not in secure jobs. So they get a job for a few months and leave the live register then lose the job and re-enter the unemployment statistics. The majority of people on the live register are there less than 1 year meaning the majority are either new to the job market or have lost their job at least once in the last 12 months, despite the recovery.

Outside of public sector workers, where most have job security, a huge number of people are working in an unsecure job and that alone is difficult even if they don't actually loose the job.

Rightwing

Villa05 wrote: »

Genuine question. What was the reason for the recovery.
A. Austerity
B. Mario dragi 's interventions.

I would argue b 90% a 10%

In fact a lot of A may have delayed the recovery as it was targeted at the weakest and not enough in the areas that were adding costs to the economy such as useless quangos

To understand the recovery, you must also understand the preceding crisis from each country's unique perspective. Has the situation been adequately addressed at global level? Arguably not. This is the concern I would have for Ireland. If multi nationals reduce workforce (stock markets are a great 9 month indicator of whether this will happen or not), then your question will be answered.

Seth Brundle

FreudianSlippers wrote: »

The other take-away is Greece. Dear god:

Yeah but it you look at the 2015 section of the Greek line, you can see the upturn created by Syriza's measures

Villa05

Deleted User wrote: »

Can you give an example of which interventions Mario Draghi (who became president of the ECB on 1/11/11) you might suggest make up 90% of the factors of Ireland's recovery thus far?



Direct QE? - What was the date when the CBI started buying bonds?

Export Boosts due to weaker currency due to QE? - Does the weaker Euro (vs Dollar, vs GBP) pre-date recovery?

Or something else? Any factor would necessarily have to pre-date Ireland's growth, or at least have been 'known' before Ireland's recovery started for us to consider it imo.

1. Whatever it takes to save the euro speech - created stability (Summer 2012)

2. Quantitative easing - Bond buying program brought Irelands borrowing costs from 15% down to around 1%. This allowed the Gov to bring a hault to austerity and (unwisely in my opinion) start giving out goodies to buy future votes
also brought extremely favourable exchange rates with our main trading partners

3. Reduced ECB Rate to near zero

Recovery is not something that happens on a particular date, it happens over time with measures that drive it further. It really began in 2012 while we were bumping along the bottom for a year prior to that

Villa05

Godge wrote: »

Pensions were not cut at all.

Social Welfare suffered minimal cuts compared to the rest of the expenditure budget.

I would really like to see somebody explain with hard facts rather than rhetoric how austerity targeted the weakest.

Arguably by creating the conditions for growth and the creation of jobs, it did the opposite as those who were without jobs are benefitting the most from the recovery.

Social Welfare
Pensioners are not the financially weakest quiet the opposite actually, they have considerable wealth..
http://www.irishtimes.com/news/older-people-s-wealth-increased-during-the-boom-1.533791

In general the austerity measures were concentrated on the youth and maintained the status quo.
1/2 rate for under 23's,
Childcare places cut for those returning to education to improve their chances of getting a job
CE Schemes slashed
particularly savage cuts to disabled

It would have been fairer to give a blanket cut in welfare rates rather than cutting the weakest, schemes and supports that helped people to return to work

Health:
Pay cuts for new starts resulting in highly skilled staff going to other countries for work. Measure probably cost the HSE more having to recruit through agencies.
Missed opportunity to fix the HSE, Redundancies should have been compulsory

Education
Again cuts in wages for new starts resulting in a crazy situation where retired teachers earned more than working teachers
Cuts to Special needs assistants, will probably cost more in the long run

General Economy
Raising VAT - A kick in the teeth for retail at a time when it was on its knee's
Cuts to Capital Projects - Ensured that Construction was dead and resulted in key skills leaving for work in other countries.
Irish Water - What a mess
Housing - Like a casino the country has thrown everything at it to make it as expensive as possible

In short, Austerity was in general targeted at people who were weak and unable to organise. It had little or nothing to do with the recovery. An opportunity for positive structural reforms was wasted