See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Finfacts is Ireland's leading business information site and
you are in its business news section.
Enda Kenny, Irish taoiseach, and Frederik Reinfeldt, Swedish prime minister, Dublin, Feb 22, 2013. In th early 1990s, Sweden and Finland gave equal rights to workers in their private and public sectors.
outrage came too late to avoid a serious crash and in recent times it appears
the rage is now mainly directed at Europe, not at the domestic failures that
twice in a generation saw the Irish economy wrecked with huge collateral damage
for tens of thousands of people. Meanwhile, the status quo still endures at
Enda Kenny gives himself a pat on the back today in The Irish Times, days in
advance of the second anniversary of his government coming to power.
EU-ECB-IMF troika public policy demands have been met and there are tentative
signs of a stabilisation in the jobs market. Annual net emigration was 34,400
in the year to last April and the IMF
estimates that the unemployment rate would be above 20% rather than close to
14%, absent emigration.
Kenny says employment
in foreign-owned exporting firms is at a 10-year high but total full-time
employment in the indigenous and foreign owned sectors is at its lowest since
2000 when official unemployment was 75,000 compared with an estimated 295,000
in December 2012.
2013 was the
year that Ireland was to attain the status of a recognised ‘world class
knowledge economy’ but the failure to achieve it has been a taboo subject in
The term 'high quality' jobs was introduced to the official lexicon when
Micheál Martin, currently Fianna Fáil leader, was minister for enterprise. He
had a weakness for vacuous superlatives and clichés. He once used 'cutting
edge' and 'state of the art' in the same sentence. The current incumbent, Richard Bruton, has carried on the
notion that knowledge jobs would dominate in the West while places in for example Asia
would continue to concentrate on low level manufacturing, is already in the dustbin of
history. China will match the R&D spending of the United States in 2022.
Recall economists singing the mantra about ‘moving up the value
chain.’? Then why would a modern manufacturing job be a lesser ‘quality’ one than
answering a phone in a call centre dubbed a ‘centre of excellence’ to enable an
R&D grant credit to be claimed, is puzzling unless there is an element of
old school snobbery about it?
A laundry-like list of 333 jobs initiatives
such as the Government's Action Plan for Jobs 2013 is no substitute for a strategy.
said in a trade report last month on Ireland: "The USA was
the major export market in 2011, followed by the UK, Germany and France, but
China is seen overtaking both France and Japan to become the fourth largest
market by 2030."
Irish exports are dominated by foreign
multinationals, which account for about 94% of Irish exports to China. Nobody
can realistically forecast the direction of such supply chains in 2030.
merchandise exports to China accounted for 3.15% of the total while total
merchandise exports to the BRIC (Brazil, India, Russia, China) countries, were 4.2% of the total.
It's very difficult to break into these
markets and the value of exports to India is a decimal point.
fortunes remain tied to the Eurozone, the US and the UK.
baby steps towards reform of failed systems are the best that can be expected.
I stumbled on this February 28th video at my base in Kuala Lumpur and there is a contrast between the international version of the Irish story and the realty at home as almost no international commentators/ economists look beyond data distorted by the significant multinational presence, including tax strategies. For example, Dell could shut its plant in Limerick and remain Ireland's biggest goods exporter!
sense of victimhood has returned, which John Banville, the writer, referred to in 'The New York Times' in November 2010,
following the EU-IMF bailout: "There used to be a nice acronym that neatly
expressed how the Irish people conceive of themselves: MOPE, that is, Most
Oppressed People Ever."
evidence from the number of online comments on 'Irish Times' debt-related
articles and similar threads on the Irish Economy blog (www.irisheconomy.ie), which was launched in late 2008 by
Philip Lane, a professor of economics, at Trinity College, shows that the
level of interest far outweighs issues such as the jobs crisis.
commentary feeds the anger but whether it's advocacy of debt default or
quitting the euro, it's a world of no downsides. Proposals involving
consequential decisions should not be taken seriously, absent a worst-case
scenario. However, commentators need not fear being forensically challenged in
the Irish broadcast media in particular. The claim that the September 2008
State bank guarantee was "the cheapest bailout in the world so far,"
should provide a lesson.
It is also
relevant that those with a grip of the public megaphone, who propose
consequential decisions without possible negative consequences, are likely
among the better positioned to avoid financial loss if the reality is much
worse than wished.
an attendee at one of the 'Four Angry Men' commercial public events, that was
organised by publisher Penguin Ireland, said online: "Unfortunately, each
angry man seemed unable and/or unwilling to rise above the blame game and help
to chart a future."
their anger at perceived nefarious foreign governments and institutions is also
easier than delivering home truths to local audiences.
maybe bitter but it was the Oireachtas that natioanlised Anglo Irish Bank and
its customer deposits were valued at five times the senior bond debt. However,
there was no campaign to 'burn' depositors.
September 2008 accounts, lending was at €73 billion; customer deposits were at
€51 billion; external bank deposits were at €20 billion and senior bond debt at
€11 billion. So the bailout primarily benefited
No appetite for reform
It would be
good if the entire €64 billion price tab for bank support was picked up by
other European countries. It is unlikely but we also should not forget past
kindness, which in inflation-adjusted terms would likely exceed the bank
bailout costs. Ireland has not contributed one net cent to the EU budget in
forty years while intangible benefits have also been significant.
eagerness for debt write-offs is not matched by support for significant reforms
last economic debacle, the late UCD constitutional law professor and Fine Gael
TD, John M. Kelly, said in 'The Sunday Tribune' in October 1986:
"Ireland's political and official rulers have largely behaved like a crew
of maintenance engineers, just keeping a lot of old British structures and
plant ticking over.."
development of the parallel modern economy driven by the opening of substantial
units of some of America's biggest companies drove the recovery from the late
still appears to be little appetite among the public and politicians for
significant reform and apart from change at the Central Bank; the pace has been
as glacial as ever.
in relation to the almost €2 billion annual public drugs bill, generic drugs
accounted for only 5 per cent of the value according to the Department of
Health in 2012. Why does it take so long to implement change that would bring
spoken in recent times about leaving debt burdens for grandchildren. However,
according to Seamus Coffey, a UCC economist, excluding interest cost and bank
support, the total deficit in the six-year period 2008-2013, will put debt
of "nearly €60 billion more on us in services and transfers than it
is collecting from us in taxes and charges."
"Why is no one concerned about this 'legacy of debt' for future
Ireland and Finland
Finland, both members of the euro system, ended 2007 with the same level of GDP
(gross domestic product). Finland had surplus public funds of €130 billion
while Ireland had net debt of €20 billion after offsetting cash balances and
the value of the National Pensions Reserve Fund.
in the developed world is unlikely to return anytime soon and it's fanciful to
expect that growth in Ireland will take-off "like a rocket" when the
international recovery becomes more sustainable. Unlike in the years from the
late 1980s, there is no foreign direct investment boom today to drive a
its independence after the collapse of Tsarist Russia in 1917 and then had to
pay a devastating cost to retain it, in response to aggression by the Soviet
Union during the Second World War.
to its economic crisis that followed the collapse of trade in the aftermath of
the disintegration of the Soviet Union in the early 1990s was very different to
what happened in Ireland both a decade before and is happening now.
its education system, which today is considered among the world's best and the
most equitable. It developed a world-class knowledge economy and the State
Civil Service Act of 1994 aimed to provide equal rights for public and private
sector employees. The Finnish civil service is a position-based system, meaning
that advancement through seniority is not possible.
abolished the right for life-long employment for most civil service jobs in the
There is no
pay premium over private sector staff in Finland. In Ireland, an ESRI paper
that was recently published put the Irish pay premium at 17% on average in 2010 - - while
the February 2013 Croke Park public service deal will cut that, throw in guaranteed
pension payouts and guarantees of employment, the lot of the typical Irish SME worker
(no occupational pension; a high risk of unemployment and basic redundancy on losing
a job), looks pretty grim by comparison.
last September, a UCD-Trinity College university merger proposal in a leaked draft report
triggered a rapid reaction from various interests to kill the chicken in the
egg. It was as if a fatwa had been issued by the elite. There would not even be
a discussion on it.
'The Irish Times' Education Editor, reported: "Minister for Education
Ruairí Quinn and three university presidents last night moved to distance
themselves from a controversial report recommending a merger of University
College Dublin with Trinity College Dublin, and other radical changes. Mr Quinn
said such a merger was 'neither feasible nor desirable,' while key elements of
the report 'would not be acceptable to Government.'
"The report, prepared by some of the most distinguished figures in
international higher education, has been effectively buried, according to
the Irish civil service, protection of Victorian traditions persists.
if the partner of the deputy prime minister lost his or her job when a public
agency was abolished, there would be no special right to have a position
created with the same pay and benefits.
member of the workforce, public or private, where a redundancy occurred, any
open position would have to be applied for.
The right to
lifetime employment in Ireland dates from 1853 when Sir Charles Trevelyan
recommended it in a report he co-authored for the British government.
features in the song, 'The Fields of Athenry,' and he had been responsible during
the Famine for closing of food depots in Ireland that had been selling Indian
corn. His motivation was to prevent the Irish from becoming "habitually
dependent" on the British government.
ironic that Trevelyan is the patron of insiders today who protect their own
interests but are prepared to have a dual labour market for new entrants where
the concept of equal pay for equal work is abandoned.
The status quo
misgovernance, catastrophic regulatory failures and a significant portion of
the electorate that was easily beguiled into believing that the free lunch had
been invented, point to a mainly domestic responsibility for the current
economic debacle, it's striking that in five years,
so little has changed.