Irish and Eurozone Competitiveness Indicators 1999 - 2009, produced by the European Central Bank (ECB), show that concerns about the competitiveness of the Irish economy are well founded.

The National Competitiveness Council (NCC) warns every six months on issues that could impact on exporting firms but anyone who travels to Europe or the US, realises how far costs got out-of-line during the bubble.

The NCC warned on Thursday that post-crash improvements in competitiveness, may be only temporary and Finfacts has repeatedly said that even resort to the quest to find an instant solution outside the Eurozone, would at best be only temporary, in the absence of fundamental reform.

Anyone who thinks the answer is in old-style stroke politics, should have a chat with the governor of the Central Bank of Argentina - - sacked last week and back in his job this week.   

While the unit labour index for Ireland rose 13.9% since 1998 and fell 7.6% in the past year, it compares with a fall of 13.8% in Germany over the decade.

Apart from Slovakia (SK), Ireland's competitiveness based on unit labour costs and consumer prices, look poor compared with trading partners.

For example, the indicator for Ireland based on prices, rose 20.3% from 1998, while the change for France was 0.8%.

The three currently embattled economies of the Eurozone - - Ireland, Spain and Greece -- were massively misgoverned during the international credit boom.

Ireland has taken measures to stabilise the public finances but the broken political system moves glacially along and overpaid trade union leaders plan strikes while conceding that "transformational" public sector reform is realisable.

The public sector is the biggest procurer of goods and services in the State and goes along with what are effectively fee cartels among professional services firms.

Lawyers and insolvency accountants are on a roll and the State's "bad bank" NAMA has a €2.5bn meal ticket for the big firms over the coming decade; Two civil servants run NAMA and it has already incorporated the Victorian era culture of secrecy on contracts  -- which hardly helps to promote competition and cannot be in the public interest.

Dr. Don Thornhill, the chairman of the NCC says a lot of second-tier law firms have let people go, but he asks, have the prices charged by those firms reduced?  - - surely a rhetorical question?   

The VHI said last week that over the last five years the total number of medical procedures which it has paid for on behalf of its customers in private facilities has increased from 293,000 procedures to 507,000 procedures which is an increase of 73% and it expects this to increase by a further 9% in the year ahead.

Someone is surely making a killing from all this and it is an illustration of how health costs can become a big black hole as in the US, where they account for 17% of GDP - - about double European levels.

This week Bord Bia issued data which showed that Irish food and drinks exports were 4.5% of total Irish exports in 2009.

With the most expensive land in Europe and the land rezoning system a taboo issue, how can we exploit our potential in food if new entrants or farmers seeking to expand, have to pay uneconomic prices for land? 

The litany could go on...and on.

Relevant recent Finfacts articles:

The euro, Ireland and the quest for instant competitiveness

National Competitiveness Council says improvements in Irish competitiveness reflect severe recession; Further efforts critical for Irish exports

Irish food and drink exports fell 12% in 2009 to €7bn - - accounting for 4.5% of total exports from Ireland; Bord Bia predicts some recovery in 2010

Vhi raises health insurance premiums to rise by 8%; Average spend per customer €900 - - double competitors' costs; Medical procedures surge 73% in 5 years

Waterford Crystal site on market; Second death of renowned Irish glass brand

Iceland: People before profits and people before banks!

Irish Economy 2010: A year of freedom from fear?

The challenge of creating 160,000 new Irish jobs

The ECB says in respect of comparing unit labour costs for the Eurozone, the real effective exchange rate of the euro vis-à-vis 21 trading partners is used. For the 16 Eurozone countries, the table below shows the harmonised competitiveness indicators calculated vis-à-vis the same 21 trading partners plus the other Eurozone countries. A positive change points to a decrease in cost competitiveness.

Competitiveness indicators based on unit labour costs indices for the total economy: Q2 2009

Index 1999: Q1= 100

The ECB says  in respect of comparing consumer price changes for the Eurozone, the real effective exchange rate of the euro vis-à-vis 41 trading partners is used. For Eurozone countries, the table below shows the harmonised competitiveness indicators calculated vis-à-vis these same trading partners plus the other Eurozone countries. A positive change points to a decrease in price competitiveness.