There has been more proof, if any were needed, that Ireland’s mantle as “best little bailed out country” in Europe is in no danger of being usurped.
After our new coalition government continued imposing the swingeing cuts that were devised by the last administration, it was revealed in June that the economy had returned to growth. GDP – the value of all goods and services being produced in the country – increased by 1.3 per cent in the first quarter of the year as exports, and profits from Irish-based multinationals, surged.
However, this masked a huge contraction in GNP – which focuses purely on Irish business and which economists believe gives a more accurate picture of the real state of the domestic economy – during the same period. It shrank by a sizeable 4.3 per cent as both government and consumer consumption fell in response to the continued imposition of harsh austerity measures.
Still, the results were spun as a good news story as Ministers took to the airwaves to enthuse about our “export-led recovery”.
Then, last month, we were told that there was more positive news about the battered Irish economy – miraculously, there had been increases in both GDP and GNP in the second quarter of the year. GDP was up 1.6 per cent between April and June and, significantly, GNP, was up 1.1 per cent on the previous quarter.
Enterprise Minister Richard Bruton looked like the proverbial Cheshire Cat during a blizzard of interviews and said the figures demonstrated the government’s kowtowing to IMF and EU demands was working. There was no mention of the fact that the GNP improvement amounted to just a small recovery of the huge fall that had preceded it in the first quarter – meaning that GNP was still down over 3 per cent from the start of the year.
Instead, the usual blather about “small open economy” and “export-led recovery” was repeated ad nauseam by representatives from government. It matters little that our export-led recovery is nothing more than a myth as unemployment continues to rise despite the 3,000 people who are emigrating every single month.
Even a cursory look at local, and national, headlines over the past couple of weeks make government assurances that “everything is going according to plan” appear ridiculous. If the Irish economy is in such a healthy state then why are 82 Carl Zeiss Optical jobs decamping from Wexford to China? Why did Talk Talk close down its Waterford plant, with barely a month’s notice, with the loss of nearly 600 jobs? Why are retail sales continuing to fall, month on month, if the economy is recovering and people have more money in their pockets?
Economist Stephen Kinsella, in a blog post for the Guardian, put the lie to the government’s outlandish claims.
“Unless medical and pharmaceutical production (or some other high-growth export sector) becomes much more labour-intensive, export led growth won’t lead to a significant reduction in the unemployment level.
“Any growth strategy predicated on export-led growth will lead to a jobless recovery,” he wrote.
Of course, the government is well aware of this fact but because the country’s export market is the only one to show tentative signs of recovery it has grasped onto it as proof that austerity is working.
To demonstrate the idiocy of its mantra we need only look at two of the country’s biggest companies in terms of revenue – both are owned by Microsoft but despite the vast sums of money being channeled through Ireland, to take advantage of our attractive rate of corporation tax, neither company employs any direct staff. Instead, they are operated from the offices of a Dublin law firm.
Meanwhile, when the government tires of lecturing us about our magnificent export-led growth, it then turns its attention to our “international reputation”. Apparently, it’s vastly improved since we, for some bizarre reason, agreed to repay the private debts of international bondholders – even those debts that were unsecured and which nobody, in their right mind, thought would ever be repaid.
It hasn’t been widely reported, but last month Bank of Ireland quietly repaid €1.465bn in unsecured bonds – imagine how many hospital beds that would pay for in our terminally ill health service?
Still, evidently believing the populace to be inured to patronising baby talk, the government happily informs us that we have been good little boys and girls and our European masters are again very happy with us. Of course they’re happy with the government and its insistence that its citizens repay the private debts of German and French banks. The Eurozone is already in crisis but if the mammoth holes in European banks’ balance sheets were to be suddenly revealed then the proverbial doodoo would really hit the fan.
To add insult to injury, in the midst of the biggest employment crisis to ever hit the country, we have highly profitable companies attempting to cash in on the government’s JobBridge internship scheme. Recently, Tesco decided that it needed nine months to train some lucky interns how to stack its shelves with groceries while other private companies also expect the State to fork out for interns to clean hotel rooms, wait tables, work as a “stationary administrators” or affix jewels to vaginas (a remarkable process known as vajazzling) – think of that the next time you wonder what the government is doing with all of the extra tax you’re now paying.
Remember, under this scheme the companies pay absolutely nothing for these interns – the State is picking up the entire bill.
Then we have commentators like the former Attorney General, and current chairman of hedge-fund managers Goldman Sachs, Peter Sutherland telling us that crippling austerity measures haven’t gone far enough and the Irish people can easily bear more than the mooted €3.6 billion of cuts that are planned for December’s budget.
What Mr Sutherland isn’t so eager to reveal is that he, despite his vast personal wealth, is still in receipt of a €52,600 annual pension from the State and has failed to surrender a single penny. So, while he is perfectly willing for the Irish people to endure further austerity, he doesn’t appear to be too willing to don the green jersey himself and rescind a pension that he patently doesn’t need.
Having lost its economic independence Ireland is unfortunately at the mercy of our paymasters in Europe but, unlike the government, we don’t have to like it or blithely accept its perceived wisdom on the toxic medicine it’s administering.