What steps brought Ireland out of recession

Take Your Pants Off

I was thinking there for a second, what did we actually do to get out of the recession in Ireland, because the corporation tax rates were still the same, we were not doing much for education either, and were still not, so how did we improve our situation, because it was from 2013, that our GNP was back positive after 5 years being negative.
What policies or announcements were made in 2012, that drove our economy back up, I could not find any articles online about it either, so I figured I'd ask the good aul politics forum of boards.ie

johnnyskeleton

Mod note:

Plesse provide your own views on the topic if you want to start a discussion. Also, thread title changed for clarity.

tomwaterford

Imagine the ECB basically keeping the whole thing (euro) afloat on a vast ocean of magic money helped??

blanch152

Take Your Pants Off wrote: »

I was thinking there for a second, what did we actually do to get out of the recession in Ireland, because the corporation tax rates were still the same, we were not doing much for education either, and were still not, so how did we improve our situation, because it was from 2013, that our GNP was back positive after 5 years being negative.
What policies or announcements were made in 2012, that drove our economy back up, I could not find any articles online about it either, so I figured I'd ask the good aul politics forum of boards.ie

https://www.enterprise-ireland.com/en/News/PressReleases/2012-Press-Releases/Government-publishes-Action-Plan-for-Jobs-2012.html

Action Plan for Jobs 2012, much derided by the "experts" on boards but has delivered significant increases in employment and reductions in unemployment.

Wheeliebin30

Simple thing called austerity.

Living within our means.

Taking the hard decisions and choices that had to be made in the face of strong criticism and political suicide.

Seth Brundle

Wheeliebin30 wrote: »

Simple thing called austerity.

Living within our means.

We had very mild austerity when compared to other countries such as Greece.
As for living within our means, it's a very long time since this country lived within our means!

LeinsterDub

I'm no expert so I may be wrong but my opinion was always that Ireland was suffering from a cash flow problem rather than a structural issue like Greece

Idbatterim

I wouldn't give much credit. They simply do anything particularly stupid to hinder the recovery ...

Idbatterim

Wheeliebin30 wrote: »

Simple thing called austerity.

Living within our means.

Taking the hard decisions and choices that had to be made in the face of strong criticism and political suicide.

I don't think they made any hard decisions. Of course they say they did. They slashed the capital budget and borrowed tens of billions to avoid what I would call any real "hard decisions " ...

tayto lover

Easy. They made the poor and middle classes pay for the rich people's losses.

Obvious Otter

Wheeliebin30 wrote: »

Simple thing called austerity.

Living within our means.

Taking the hard decisions and choices that had to be made in the face of strong criticism and political suicide.

Austerity was the easy option. It’s much easier to make the Irish taxpayer pay for unsecured bonds than actually do your job as an elected public official. We build our economic policy to satisfy the markets and corporate interests. There were very few hard decisions taken and even fewer hard decisions were made to tighten up accounting regulations and audits of these banks. There is no more accountability. It’s embarrassing.

FreudianSlippers

Wheeliebin30 wrote: »

Simple thing called austerity.

Living within our means.

Taking the hard decisions and choices that had to be made in the face of strong criticism and political suicide.

Keeping our pillar banks alive and transferring all the toxic assets to NAMA was also a key decision which helped us recover.
I've always been of the opinion that the guarantee was too broad and some of the smaller banks should have been let fail - but given how well this has worked out, we'll never know if that decision would have been good or not.

listermint

kbannon wrote: »

We had very mild austerity when compared to other countries such as Greece.
As for living within our means, it's a very long time since this country lived within our means!

tbf greece is a different kettle of fish for multiple different reasons not withstanding FDI and just general tax collection.

We definitely had Austerity, its was not as visible as greece because of the scale of avoidance in tax take.

Here it manifested itself visually in reduction of local services like cutting grass verges , i remember seeing them allowed to grow to 3 foot in height on some south Dublin central road dividers for months on end. The removal of local community schemes and assistances , social workers etc.

We most definitely suffered cuts across the board it just didnt manifest itself with bread lines nationwide solely due to our revenue service being as tight as a drum and our FDI.

Off loading the bad debt to Nama was a superb idea given the circumstance.

Seth Brundle

listermint wrote: »

tbf greece is a different kettle of fish for multiple different reasons not withstanding FDI and just general tax collection.

We definitely had Austerity, its was not as visible as greece because of the scale of avoidance in tax take.

Here it manifested itself visually in reduction of local services like cutting grass verges , i remember seeing them allowed to grow to 3 foot in height on some south Dublin central road dividers for months on end. The removal of local community schemes and assistances , social workers etc.

We most definitely suffered cuts across the board it just didnt manifest itself with bread lines nationwide solely due to our revenue service being as tight as a drum and our FDI.

Off loading the bad debt to Nama was a superb idea given the circumstance.

I never said that we didn't have austerity. I said we had mild austerity, which we did.
What we (FG & Lab) should have done back in 2011 was slash spending on the big stuff (not grass cutting) such as welfare. But they didnt.
They should have introduced water charges there and then. But they didnt.
We had the opportunity to curtail some of the wastefulness of the health system but aside from some cosmetic touch ups, did nothing.
They had the opportunities to correct our massive over spending issue but like all other politicians, could not bring themselves to do it and instead continued spending money we didn't have.

Mooooo

Time

James Brown

Austerity for the majority, a historically large loan and a rush to get the people, many of whom who caused the problem in the first place, back in business. This helped the economy grow, and pleased the world's finance organisations, but did not aid the greater society above creating often poor paying jobs.
We have a situation where working does not guarantee full time and does not guarantee being able to afford rent without state aid. And reports that the gap between house prices and affordability are set to widen further, and many of the housing market customer base are reliant on grants and subsidies funded by the tax payer.
Coupled with record breaking homeless, record breaking numbers in emergency accommodation and arguably being on the way to another property bubble; it's not so clean cut to suggest we are out of anything.

Idbatterim

kbannon wrote: »

I never said that we didn't have austerity. I said we had mild austerity, which we did.
What we (FG & Lab) should have done back in 2011 was slash spending on the big stuff (not grass cutting) such as welfare. But they didnt.
They should have introduced water charges there and then. But they didnt.
We had the opportunity to curtail some of the wastefulness of the health system but aside from some cosmetic touch ups, did nothing.
They had the opportunities to correct our massive over spending issue but like all other politicians, could not bring themselves to do it and instead continued spending money we didn't have.

100%. I look back now, look at the joke rate of LPT. no water charges (at least they tried to implement these) Labour getting in with FG in 2011 was a disaster for the country in my opinion, it stopped needed reform of black holes like welfare and PS...

we would be in a much better position now if they had not had to share power, in my opinion...

listermint

Idbatterim wrote: »

100%. I look back now, look at the joke rate of LPT. no water charges (at least they tried to implement these) Labour getting in with FG in 2011 was a disaster for the country in my opinion, it stopped needed reform of black holes like welfare and PS...

we would be in a much better position now if they had not had to share power, in my opinion...

I disagree, What mark of note within FG is there to address anything within PS or Welfare .

Nothing, and dont blame labour on it (i have no love for labour) but FG took no real steps at all to address any of it, none that labour stopped.

James Brown

The idea that anyone thinks it's over is very concerning. It would seem while many are still suffering the repercussions, not only have Fine Gael done little to change the way we do business, the next crash may come along before we can begin to say the last and it's effects are over.

Idbatterim

I disagree, What mark of note within FG is there to address anything within PS or Welfare .

Nothing, and dont blame labour on it (i have no love for labour) but FG took no real steps at all to address any of it, none that labour stopped.

Oh I agree now, the fight certainly seems to be gone out of them now. But there was an unprecedented opportunity in 2011 after the crash after years out of power, when there was appertite for change and the pulbic accepted the state was broke. It was a once off opportunity, to right some of the wrongs of the aherne years...

Labour with their "every little hurts " campain. Goebbels stuff right there LOL Them getting into government hurt this country!

listermint

Idbatterim wrote: »

Oh I agree now, the fight certainly seems to be gone out of them now. But there was an unprecedented opportunity in 2011 after the crash after years out of power, when there was appertite for change and the pulbic accepted the state was broke. It was a once off opportunity, to right some of the wrongs of the aherne years...

Labour with their "every little hurts " campain. Goebbels stuff right there LOL Them getting into government hurt this country!

No, my point is there was never an appetite, not that it was there and left.

It didnt exist.

Idbatterim

listermint wrote: »

No, my point is there was never an appetite, not that it was there and left.

It didnt exist.

I dont think they had an appetite to do what I would have liked to have seen done with them. But I do think they would have targeted them more if it werent for labour...

James Brown

I think the agenda under which they got in was never going to be followed up on. Cronyism and 'looking after our own' were rife from day one. Labour were saying nothing on somethings and backing others but I don't think any faux socialist agenda on their part played any real role.

eoinfitzokk

The appetite for change was not enough, Ireland was in a similar situation to New Zealand in the 1980s (according to this excellent documentary; Revolution Link: https://youtu.be/JZXpeUQ0tD8), but we saw no sweeping reforms. The New Zealand labour government of that time ushered in truely needed reform.

The Irish Water protests were enough to send the Government cowering in the corner - both Labour and Fine Gael. True governance requires tough and unpopular decisions and communication of the need for reform.

True change would have made some progress into the Water Infrastructure Crisis, HSE expenditure or socially adjusted welfare payments.

James Brown

eoinfitzokk wrote: »

The appetite for change was not enough, Ireland was in a similar situation to New Zealand in the 1980s (according to this excellent documentary; Revolution Link: https://youtu.be/JZXpeUQ0tD8), but we saw no sweeping reforms. The New Zealand labour government of that time ushered in truely needed reform.

The Irish Water protests were enough to send the Government cowering in the corner - both Labour and Fine Gael. True governance requires tough and unpopular decisions and communication of the need for reform.

True change would have made some progress into the Water Infrastructure Crisis, HSE expenditure or socially adjusted welfare payments.

Your timeline is a little skewed.
All talk to meaningful change was quietened long before IW. The biggest move they made was IW, but they prioritised it over the promises to end cronyism, change the way we do business etc. How the public reacted to IW had absolutely nothing to do with FG's unwillingness to follow through on election promises. There was more money to be made privately in keeping things as was.
You can not equate water metering with hospital trolley wait times, 'If they won't accept money towards metering, forget tackling health'. I don't think so. We allowed ourselves take the loan, bailout private gamblers under the list of things we had to do. Overhauling health would have been possible.

Idbatterim

eoinfitzokk wrote: »

The appetite for change was not enough, Ireland was in a similar situation to New Zealand in the 1980s (according to this excellent documentary; Revolution Link: https://youtu.be/JZXpeUQ0tD8), but we saw no sweeping reforms. The New Zealand labour government of that time ushered in truely needed reform.

The Irish Water protests were enough to send the Government cowering in the corner - both Labour and Fine Gael. True governance requires tough and unpopular decisions and communication of the need for reform.

True change would have made some progress into the Water Infrastructure Crisis, HSE expenditure or socially adjusted welfare payments.

you are preaching to the choir on this, spot on! of course FG will claim they made the tough calls, of course they will say that! like I said having Labour in there made things a bit more difficult, Ill give them that. There the Irish are harping on about change and reform. They put in Labour to block it! We deserve what we get!

blanch152

Matt Barrett wrote: »

We allowed ourselves take the loan, bailout private gamblers under the list of things we had to do. Overhauling health would have been possible.

You have got the chronology of that wrong.

FF bailed out the banks in 2008 by giving them a guarantee and left the taxpayers with a potential bill. When the economy collapsed, and the banks with them, the guarantee was called in, the one we have signed up to democratically under FF, and FF had to call in the IMF and the subsequent government had no option but to borrow the money to pay for the cost of the guarantee.

Idbatterim

You have got the chronology of that wrong.

FF bailed out the banks in 2008 by giving them a guarantee and left the taxpayers with a potential bill. When the economy collapsed, and the banks with them, the guarantee was called in, the one we have signed up to democratically under FF, and FF had to call in the IMF and the subsequent government had no option but to borrow the money to pay for the cost of the guarantee.

I agree. You know what, the lesson to be learned is, never allow ourselves be put in that position again. This isnt about right or wrong. "We" were the ones who were desperate for the money, the big boys called the shots. We allowed ourselves get in that position, like I said, dont let them get that sort of control over you in future.

If people think the majority of us saw austerity, Id like to have seen what would happen if we had to balance the books over night. Those people that bitch most in society, are the ones who massively beneffited from being bailed out. The cost of which is massively borne by others anyway, the "high" earners here are crucified to pay for the entire farce...

James Brown

blanch152 wrote: »

You have got the chronology of that wrong.

FF bailed out the banks in 2008 by giving them a guarantee and left the taxpayers with a potential bill. When the economy collapsed, and the banks with them, the guarantee was called in, the one we have signed up to democratically under FF, and FF had to call in the IMF and the subsequent government had no option but to borrow the money to pay for the cost of the guarantee.

You are misrepresenting my post by selective quote.

The premise put forward was FG/Lab were too scared to bring in any big changes after the response IW/metering got.

It was June of 2011 before Hogan even brought forward the intent of installing water meters to the Dáil. I believe Fine Gael under Kenny took power in March of that year. It was 2013 before IW was incorporated as a semi-state.
Therefore, it was not a case of Irish Water/Metering being put to the people and their kick back being so severe that FG shied away from tackling the way we do business, cronyism and healthcare.

You are referencing a later part of my post where I am following on and stating that as we allowed the bailouts of the private gamblers and banks as an alleged 'must do', we certainly were open to over hauling the health service.

Why FG failed to follow up on changing things in any meaningful way and let the time for such action slip by, is open for debate, but I would guess it has more to do with them liking things as is.

Wanderer78

'keep the recovery going':rolleyes:

Idbatterim

'keep the recovery going'

yeah keep it going for FG, the banks and the usual hangers on... The ones I truly feel sorry for are the actually vulnerable (this doesnt include your typical pensioner or welfare lifer) :rolleyes: and those that are done in with outrageous mortgage or rent!

The OP reckons we're not doing much for education.

Bizarre statement.

Anyway, small open multinational tax haven does well when global recession finishes and suffers more than proportionately when recession hits, film at 11

Wanderer78

Idbatterim wrote: »

yeah keep it going for FG, the banks and the usual hangers on... The ones I truly feel sorry for are the actually vulnerable (this doesnt include your typical pensioner or welfare lifer) :rolleyes: and those that are done in with outrageous mortgage or rent!

id partly agree with your statement and add a bit more, most if not all workers are getting screwed in all this, recovery, me arse! the whole housing market is a train wreck

Wanderer78

Wanderer78 wrote: »

id partly agree with your statement and add a bit more, most if not all workers are getting screwed in all this, recovery, me arse! the whole housing market is a train wreck

I wouldnt quite agree, if you bought your house years ago and happy with it you can coast along quite happily, we will soon be back at full employment.

If you are renting or attempting to buy you will be crucified on a cross.

James Brown

Topgear on Dave wrote: »

I wouldnt quite agree, if you bought your house years ago and happy with it you can coast along quite happily, we will soon be back at full employment.

If you are renting or attempting to buy you will be crucified on a cross.

If you bought your house and it's now in negative equity? If you managed to hang onto it you mean?

Full employment? Not as shiny a prospect as it may have been in the past. More tax payer money needed to support these people with "jobs"? More tax payer money needed to help them make rent?

Seth Brundle

Matt Barrett wrote: »

If you bought your house and it's now in negative equity? If you managed to hang onto it you mean?

Negative equity is only relevant if you plan on selling up.

James Brown

kbannon wrote: »

Negative equity is only relevant if you plan on selling up.

Would you be "happy with it"? And would it enable you to "coast along quite happily" as you pay the loan on something no longer worth the loan price?

Seth Brundle

Matt Barrett wrote: »

Would you be "happy with it"? And would it enable you to "coast along quite happily" as you pay the loan on something no longer worth the loan price?

If I bought a house (and thus was happy with the price) then I cant complain afterwards that I paid too much for it, especially if I have no plans to sell it!
Why don't people complain that their shares are in negative equity?

Anyhow, my original point was that if you have no plan to sell (or remortgate the place) then negative equity doesn't affect you.

Zubeneschamali

Idbatterim wrote: »

yeah keep it going for FG, the banks and the usual hangers on...

The banks themselves, the institutions, were taken into public ownership because the economy needs them to operate. The banks owners were utterly wiped out, not rescued.

Many of the actions people here wish happened (let the banks all fold, slash welfare) would have had disastrous effects on the economy, and NOT doing those things helped us out of the recession.

In addition, Ireland's Gini coefficient, the measure of inequality, actually went down since before the crash. We not only recovered, we lowered the gap between rich and poor in the process. We recovered without eating the poor.

Idbatterim

Zubeneschamali wrote: »

The banks themselves, the institutions, were taken into public ownership because the economy needs them to operate. The banks owners were utterly wiped out, not rescued.

Many of the actions people here wish happened (let the banks all fold, slash welfare) would have had disastrous effects on the economy, and NOT doing those things helped us out of the recession.

In addition, Ireland's Gini coefficient, the measure of inequality, actually went down since before the crash. We not only recovered, we lowered the gap between rich and poor in the process. We recovered without eating the poor.

I agree about the banks and why they were taken into state ownership. But I'd keep one of them in state ownership, had rates on mortgages in particular set lower, to control the market to extent. For the good of the people, not the banks for a change ...

eoinfitzokk

Idbatterim wrote: »

I agree about the banks and why they were taken into state ownership. But I'd keep one of them in state ownership, had rates on mortgages in particular set lower, to control the market to extent. For the good of the people, not the banks for a change ...

A government controlled mortgage market could be a disaster, everyone would assume that they have a right to a mortgage. Balancing books could prove difficult if that bank had to go out to the market like AIB and BOI.
More competition would really help this market, but a state funded bank would be a political nightmare in my opinion.

James Brown

eoinfitzokk wrote: »

A government controlled mortgage market could be a disaster, everyone would assume that they have a right to a mortgage. Balancing books could prove difficult if that bank had to go out to the market like AIB and BOI.
More competition would really help this market, but a state funded bank would be a political nightmare in my opinion.

We have a government controlled rental and housing market.
We spend tax money on keeping rents and house prices artificially high, with subsidies and allowances. The market does not set the price.

Seth Brundle

Matt Barrett wrote: »

We have a government controlled rental and housing market.
We spend tax money on keeping rents and house prices artificially high, with subsidies and allowances. The market does not set the price.

I think thats a very simplistic view if the situation and doesn't take in the high cost of land and construction, the ever growing demand, the culture of property ownership, the car culture and ultimately the shortage of supply in the areas of demand.

James Brown

kbannon wrote: »

I think thats a very simplistic view if the situation and doesn't take in the high cost of land and construction, the ever growing demand, the culture of property ownership, the car culture and ultimately the shortage of supply in the areas of demand.

It's a fact. It's not the whole story of course, but a major part of maintaining and exacerbating the housing and homeless crises.

Good loser

tayto lover wrote: »

Easy. They made the poor and middle classes pay for the rich people's losses.

That's particularly false. Didn't the largest property developers go broke?

The ESRI showed that the top 10% and the bottom 10% paid the highest prices for the recession.

Good loser

Matt Barrett wrote: »

We have a government controlled rental and housing market.
We spend tax money on keeping rents and house prices artificially high, with subsidies and allowances. The market does not set the price.

Yes it does.

Saw there in Tralee houses selling for as low as €60,000, better ones between 125k and 160k.

In Thurles reasonable houses for less than 175k.

server down

Good loser wrote: »

That's particularly false. Didn't the largest property developers go broke?

The ESRI showed that the top 10% and the bottom 10% paid the highest prices for the recession.

My guess is that’s the exact opposite of the truth. There were no significant welfare cuts and the rich made off like bandits with asset increases.

The rest got USC.

server down

Good loser wrote: »

Yes it does.

Saw there in Tralee houses selling for as low as €60,000, better ones between 125k and 160k.

In Thurles reasonable houses for less than 175k.

His point is that government subsidies for rent pushes up prices. As did nama. As did bailing out the banks.

Seth Brundle

Matt Barrett wrote: »

It's a fact. It's not the whole story of course, but a major part of maintaining and exacerbating the housing and homeless crises.

Which of your statements is a fact? That the government controls rental and housing market, that we spend tax money on keeping rents and house prices artificially high or that the market does not set the price?
A source for this "fact" would be good.

As for your first point, I've already provided a number of factors that influence property prices. The second point is somewhat true but prices are likely to be high anyhow given the difference between supply and demand.
Your third point is not worthy of response really.

Samaris

kbannon wrote: »

If I bought a house (and thus was happy with the price) then I cant complain afterwards that I paid too much for it, especially if I have no plans to sell it!
Why don't people complain that their shares are in negative equity?

Anyhow, my original point was that if you have no plan to sell (or remortgate the place) then negative equity doesn't affect you.

I won't pretend that housing is my area or that I know a great deal about it, but a house is a solid asset, the largest personally owned asset most people will ever possess. It is a security net. Isn't asking people why they're mad that's it's now a much weaker asset or even a liabilty a bit akin to asking why would someone be mad that their savings were wiped out if they weren't planning on immediately using them? Upkeep, repairs, loans and mortgages still have to be paid, but there us nothing to recoup losses against if times get hard.

Boom and bust economies are awful, but it's a bit harsh to withold any sympathy for those caught in the cycle who have little control over the cycle.

Seth Brundle

Samaris wrote: »

I won't pretend that housing is my area or that I know a great deal about it, but a house is a solid asset, the largest personally owned asset most people will ever possess. It is a security net. Isn't asking people why they're mad that's it's now a much weaker asset or even a liabilty a bit akin to asking why would someone be mad that their savings were wiped out if they weren't planning on immediately using them? Upkeep, repairs, loans and mortgages still have to be paid, but there us nothing to recoup losses against if times get hard.

Upkeep, repairs, loans and mortgages would have to be made/paid regardless of the equity in the house.

Samaris wrote: »

Boom and bust economies are awful, but it's a bit harsh to withold any sympathy for those caught in the cycle who have little control over the cycle.

They had control over the purchase. I stayed within my means. Should I sympathise with someone who didn't? Maybe depending on the situation but I'm not going to pretend that I think hey were foolish and irresponsible.