Professional Documents
Culture Documents
Textbook Austerity and Recovery in Ireland Europe S Poster Child and The Great Recession First Edition Oconnell Ebook All Chapter PDF
Textbook Austerity and Recovery in Ireland Europe S Poster Child and The Great Recession First Edition Oconnell Ebook All Chapter PDF
https://textbookfull.com/product/citizens-and-the-crisis-
experiences-perceptions-and-responses-to-the-great-recession-in-
europe-1st-edition-marco-giugni/
https://textbookfull.com/product/the-tea-party-occupy-wall-
street-and-the-great-recession-nils-c-kumkar/
https://textbookfull.com/product/the-populist-explosion-how-the-
great-recession-transformed-american-and-european-politics-john-
b-judis/
https://textbookfull.com/product/britain-s-butterflies-a-field-
guide-to-the-butterflies-of-great-britain-and-ireland-4th-
edition-david-newland/
Britain s Birds An Identification Guide to the Birds of
Great Britain and Ireland 2nd Edition Rob Hume
https://textbookfull.com/product/britain-s-birds-an-
identification-guide-to-the-birds-of-great-britain-and-
ireland-2nd-edition-rob-hume/
https://textbookfull.com/product/american-hegemony-after-the-
great-recession-a-transformation-in-world-order-1st-edition-
brandon-tozzo-auth/
https://textbookfull.com/product/britain-s-dragonflies-a-field-
guide-to-the-damselflies-and-dragonflies-of-great-britain-and-
ireland-fourth-edition-dave-smallshire/
https://textbookfull.com/product/pocket-guide-to-the-butterflies-
of-great-britain-and-ireland-2nd-edition-richard-lewington/
https://textbookfull.com/product/an-anthropology-of-the-irish-in-
belgium-belonging-identity-and-community-in-europe-sean-o-
dubhghaill/
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
A U S T E RI TY A N D RE C O V E R Y I N I R ELA N D
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
Edited by
WI LLIA M K. ROC H E, PH ILI P J. O ’ C O N N E L L ,
AND ANDREA PROTHERO
1
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
3
Great Clarendon Street, Oxford, OX2 6DP,
United Kingdom
Oxford University Press is a department of the University of Oxford.
It furthers the University’s objective of excellence in research, scholarship,
and education by publishing worldwide. Oxford is a registered trade mark of
Oxford University Press in the UK and in certain other countries
© Oxford University Press 2017
The moral rights of the authors have been asserted
First Edition published in 2017
Impression: 1
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, without the
prior permission in writing of Oxford University Press, or as expressly permitted
by law, by licence or under terms agreed with the appropriate reprographics
rights organization. Enquiries concerning reproduction outside the scope of the
above should be sent to the Rights Department, Oxford University Press, at the
address above
You must not circulate this work in any other form
and you must impose this same condition on any acquirer
Published in the United States of America by Oxford University Press
198 Madison Avenue, New York, NY 10016, United States of America
British Library Cataloguing in Publication Data
Data available
Library of Congress Control Number: 2016943125
ISBN 978–0–19–879237–6
Printed in Great Britain by
Clays Ltd, St Ives plc
Links to third party websites are provided by Oxford in good faith and
for information only. Oxford disclaims any responsibility for the materials
contained in any third party website referenced in this work.
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
Preface
The Great Recession was a cataclysmic event in modern Irish history and the
genesis and effects of the crisis remain matters of enquiry and debate within
Ireland. The dramatic recent rebound of the Irish economy shows no signs of
dulling the edge of analysis and debate concerning the domestic and inter-
national lineage of the crisis, or the manner in which international institutions
dealt with Ireland as the country sought to handle a calamitous fall in output,
the near collapse of its banks, ballooning fiscal deficits, escalating unemploy-
ment, and the reoccurrence of mass emigration.
This book arose from the shared conviction of both editors and contributors
that it was important that Ireland’s experience of austerity, and subsequently of
recovery, should be the subject of rigorous social scientific analysis, drawing on
the highest quality data available. This view was further underlined by Ireland
so often being cited internationally as an exemplar of how austerity can prime
economic recovery and renewal.
The editors were gratified that a group of Ireland’s leading social scientists
were willing to contribute enthusiastically to the book. All are internationally
acknowledged scholars in the areas which they contribute. Given the serious
effects of the Great Recession and the austerity programme on many areas of
Irish life, the book is necessarily interdisciplinary: drawing on the insights of
economists, finance specialists, legal scholars, sociologists, political scientists,
Europeanists, business, management, marketing, and industrial relations
scholars, public management analysts, migration researchers, housing special-
ists, and cultural analysts. This, we believe, is one of the book’s major strengths
and contributions. Another contribution is that the book presents the first
analysis of the Irish case that examines the crisis, the austerity programme
agreed between Ireland and the Troika of the European Commission (EC), the
European Central Bank (ECB), and the International Monetary Fund (IMF),
and Ireland’s dramatic economic rebound from 2014. This allows contributors
to the book to consider whether, or in what way, the austerity programme can
be viewed as having contributed to Ireland’s recovery. In this context, a third
major theme concerns the scepticism of the book’s contributors that Ireland
should in fact be viewed as a ‘poster child’ or exemplar of austerity-primed
recovery and renewal in Europe that vindicates the response of the European
Union (EU) and international institutions to countries beset by economic and
fiscal crisis after 2008. A fourth theme explores the extent to which the crisis
and austerity programme led to major and likely enduring changes in eco-
nomic, financial, business, political, work, and labour market institutions, and
in patterns of consumption.
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
vi Preface
A book dealing with such major themes and involving multiple contributors
from many disciplines is a challenging undertaking. We would like to
acknowledge with gratitude the support we received during our work on the
project. Financial support towards a conference of contributors, held in June
2015 at the Michael Smurfit Graduate Business School, University College
Dublin (UCD), was received from the UCD College of Business and the UCD
Geary Institute for Public Policy. The conference allowed the editors and
contributors to discuss the book’s main themes and to highlight the main
lessons of the Irish case. All contributions to the book were substantially
revised in light of discussion at the conference. We would like to thank
Adam Swallow, Commissioning Editor for Economics and Finance at Oxford
University Press (OUP), for his encouragement for the project from its
inception and for his very helpful comments and advice on how the book
could best be given shape. We are grateful to the four anonymous reviewers for
OUP, who contributed many helpful comments and suggestions on a detailed
outline and on a range of draft chapters. Our thanks also to the delegates of
OUP for accepting the book for publication and for further comments on the
proposal and reviews. At OUP, Aimee Wright and Lowri Ribbons also pro-
vided much helpful advice and support. At UCD, Bernie Cramp provided
excellent administrative support to the project throughout and we would like
to record our thanks to her for her work on the book.
Bill Roche, Philip O’Connell,
and Andy Prothero
Dublin, April 2016
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
Contents
List of Figures ix
List of Tables xiii
List of Abbreviations xv
List of Contributors xix
viii Contents
Index 327
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
List of Figures
x List of Figures
5.5. Sectoral breakdown of Irish banking lending (excluding
financial intermediation) 101
5.6. Default rates of residential and investment mortgages 102
5.7. Repossession rates for defaulted mortgages 102
7.1. Personal spending on goods and services in Ireland, 2006–15 125
7.2. Retail sales index: 2006–15 (Base 2005=100) 126
7.3. Irish consumer confidence, 2006–15 127
8.1. GDP growth in GIPS countries, 2006–14 146
8.2. Unemployment in GIPS countries 147
8.3. Gross public debt as per cent of GDP at market prices 148
8.4. Unit labour costs in GIPS countries, 1998–2014 148
8.5. Exports as per cent of GDP (market prices) 150
9.1. Irish political reforms, 2011– 165
11.1. The trend in nominal unit labour costs in Ireland and the EU 198
11.2. The trend in trade union density 2003–14 202
11.3. Work pressure, 2003 and 2009 206
11.4. Work intensity, 2004 and 2010 207
11.5. Employees’ influence over decisions in the job and organization,
2004 and 2010 208
12.1. Numbers employed in the public service 220
12.2. Public service pay and pensions 221
12.3. Senior Executives’ Perceptions of the Impact of the Fiscal Crisis on
Power Relations 223
12.4. Cutback measures applied at organizational level in response
to the fiscal crisis 224
13.1. Standardized long-term and total unemployment rates, 2007–15 233
13.2. Unemployment rates by education, 2007, 2012, 2015 (Q4) 237
13.3. Number of participants in ALMPs, December 2014 247
14.1. The impact of Ireland’s budgetary policy 2009–15 on equivalized
income deciles 256
14.2. Consistent poverty rates by household composition 2009–13 258
14.3. Direct, indirect, and total household taxation as % of gross income
equivalized data 259
14.4. Children and poverty, 2008 to 2013 261
15.1. Number of completed housing units per annum, 1991–2015 274
15.2. Change in property price index: 2007–14 276
15.3. Location of unfinished estates and number of units per estates, 2010 278
16.1. Gross and net migration flows, 1987–2015 291
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
List of Figures xi
16.2. Unemployment rates, Irish and non-Irish nationality, 2007–15 296
16.3. Emigration from Ireland by nationality, 2006–15 299
16.4. Gross emigration of nationals per 1,000 of national population
from selected European countries, 2009–13 300
16.5. Reasons for departure (in per cent) of Irish emigrants, 2008–13 301
16.6. Economic status (in per cent) of emigrants aged over 15, 2009–15 302
16.7. Education levels (in per cent) of Irish population’s 25–34 year olds
in 2012 compared with Irish emigrants, 2008–13 304
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
List of Tables
List of Abbreviations
List of Contributors
xx List of Contributors
Gregory Connor is Professor of Finance at Maynooth University; his research
interests are in financial risk modelling.
Margaret Crean is a graduate in both Science and Social Sciences from UCD,
where she also completed her MSc and PhD in Equality Studies in the School
of Social Justice. She has published a wide range of academic papers on
equality issues, including papers on inequality in education, social class, and
palliative care.
David M. Farrell, MRIA, holds the Chair of Politics at UCD, where he is
incoming Head of the School of Politics and International Relations. From
2012–14 he was the Research Director of the Irish Constitutional Convention.
A specialist in the study of parties, elections, and electoral systems, his current
work is focused on deliberation and politics.
Thomas Flavin is Senior Lecturer in Financial Economics at Maynooth
University, with research interests in international finance, particularly
financial contagion and market integration.
Irial Glynn is Lecturer at the Institute of History in Leiden University. His
research focuses on post-war Irish and Italian migration experiences, global
trends in asylum policymaking from a historical perspective, and the links
between memory studies and migration studies.
Rory Hearne is Senior Policy Analyst at Think-tank for Action on Social
Change (TASC), a Dublin-based independent think tank whose focus is
economic equality and democratic accountability. His work concerns housing,
politics, political economy, privatization, human rights, social movements,
and community development.
Andrew Keating is a Lecturer in Marketing at UCD. His research interests lie in
the areas of consumer research and marketing and new venture development.
His work has been published in journals such as Entrepreneurship, Theory
and Practice, Industrial Marketing Management, and Consumption, Markets
and Culture.
Stephen Kinsella is Senior Lecturer in Economics at the University of
Limerick. His interests are stock flow consistent macroeconomics and the
study of the impact of austerity.
Rob Kitchin is a Professor and European Research Council (ERC) Advanced
Investigator at the National Institute for Regional and Spatial Analysis at
Maynooth University. He specializes in social and urban geography broadly
conceived, and has published widely across the social sciences.
Brigid Laffan is Director and Professor at the Robert Schuman Centre
for Advanced Studies, European University Institute, Florence. She was
OUP CORRECTED PROOF – FINAL, 17/10/2016, SPi
Christine Lagarde took her place at the podium and smiled warmly at the large
audience. Gathered to listen to her in the ceremonial splendour of St Patrick’s
Hall at Dublin Castle was a large appreciative audience of politicians, business
leaders, senior civil servants, and diplomats. The managing director of the
International Monetary Fund (IMF) offered congratulations for the manner in
which the Irish Government and people had handled the crisis. Ireland, she
told them, was setting standards. It was March 2013 and the country was
within months of exiting the bailout arranged with the ‘Troika’ of the IMF, the
European Central Bank (ECB), and the European Commission (EC). Looking
on from the front row during an equally upbeat press conference later in
Government Buildings was Ajai Chopra, head of the Troika team dispatched
to Ireland in November 2010 to negotiate the terms of Ireland’s rescue
package. Chopra was the subject of an iconic press photograph taken at that
time. Striding with his team towards the Irish Department of Finance, he
encountered a beggar rattling a cup in the hope of soliciting some support—an
apt visual commentary on the plight of the country he was there to rescue.
An ocean appeared to separate the Ireland of 2013 and 2010. Recovery had
begun and would gather pace as the country eased its way out of the rescue
programme without the need for a precautionary credit line from the depart-
ing international institutions. When Ireland ceded its economic sovereignty it
became convenient to blame the Troika for unpopular taxes, spending cuts,
and reform measures. Some political leaders thought to challenge ‘Frankfurt’s
way’, especially by attempting to institute burden-sharing with unsecured
senior bondholders in the calamitous Anglo Irish Bank. But as Ireland pro-
gressed towards (again) becoming Europe’s strongest performing economy,
OUP CORRECTED PROOF – FINAL, 21/10/2016, SPi
€ Billion
Revenue 5.6 1.4 1.6 1.3 0.9 0.7 11.5
Expenditure 9.2 3.9 2.2 2.3 1.6 1.3 20.5
Total 14.7 5.3 3.8 3.5 2.5 2.0 31.8
Percentage of 2010 GDP 9.2% 3.3% 2.3% 2.1% 1.5% 1.1% 19.5%
with the result that that gross government debt soared to almost over 120 per
cent of GDP by 2013 (FitzGerald 2014). Almost one-third of this increased
debt (or 40 per cent of GDP) was directly attributable to the money transferred
to the banking system under the bank bailout. However, another 50 percent-
age points (of GDP) of the debt at the end of 2012 was attributable to the
borrowing undertaken after 2008 to finance the fiscal imbalance between
taxation and expenditure that had accumulated since the beginning of the
crisis. So while Ireland had a relatively modest and apparently sustainable debt
to GDP ratio of about 25 per cent in 2007, immediately before the recession,
the combined effects of repeated fiscal deficits—due to the recession—as well
as the banking bailout, were to result in Ireland becoming one of the most
indebted countries in the world by 2012.
In the face of this fiscal crisis, the Irish Government embarked on a severe
austerity programme to restore balance to the public finances with the aim of
reducing the headline fiscal balance from over 12 per cent of GDP in 2008 to
less than 3 per cent in 2015. Table 1.1 sets out a summary outline of the
austerity package, entailing a total adjustment of 32 billion euros, consisting of
20.5 billion euros in expenditure cuts and 11.5 billion euros in tax increases
(FitzGerald 2014).
The cumulative effects of this austerity package represent almost 20 per cent
of GDP: it is this massive effort that various commentators have described as
the ‘sacrifice of the Irish people’. In the initial phase of the austerity package,
2008–10, more or less before the arrival of the IMF–ECB–EC Troika, adjust-
ments amounting to almost 15 billion euros or 10 per cent of GDP were
achieved. The second half of the austerity programme, of the same order of
magnitude, was implemented over 2011–15, the first three of those years
under the supervision of the Troika.
There were three key elements to the Memorandum of Understanding
between the EC and Ireland governing the Programme of Financial Support:
1. Fiscal consolidation, including:
• Increased taxes and introduction of new taxes on property, water, and
carbon;
OUP CORRECTED PROOF – FINAL, 21/10/2016, SPi
AL T E R N A TI V E S TO A U S T E R I T Y AN D T HE GE N E S I S
OF THE BAILOUT PROGRAMME
—Foàder!.… foàder!.…
[Inhoud]
TWEEDE HOOFDSTUK.