E. Maslauskaitė. Ar Airija yra sektinas pavyzdys? (0)

Šiandien ACC suorganizuotoje diskusijoje Kubilius labai gražiai kalbėjo apie globalizaciją ir laisvą asmenų judėjimą. Bet pradėjus kalbėti, kaip susigrąžinti migrantus, Premjeras paminėjo, kaip ji įkvepia Airija – jos Vyriausybė siekdama prisitraukti investuotojus, turėjo parodyti, kad bus kvalifikuotos darbo jėgos, tad važinėjo po įvairias šalis ir rinko parašus airių inžinierių, kurie pasižadėjo grįžti. Matyt, šios istorijos įkvėptas ir didžiuojasi Barclays ir WU pritraukimu.


Štai airio komentaras apie trumpalaikę tokios politikos sėkmę.


IrishLiberalreplied on Fri, Sep 4 2009 5:14 PM

Verified by ladyattis

As an Irish citizen I feel I could shed some light on this. Firstly, Ireland has been falsely characterized as an example of a free enterprise economy. Ireland has more regulation and a lower economic freedom score than the USA. It is still a mixed economy. Rather Ireland is a demonstration of how a movement towards liberalisation breeds success. Incomes and generally standard of living have increased exponentially since taxes were slashed (both corporate and income) and industry was deregulated in the early 1990s. Ireland was transformed from a sleepy managed economy with an overbearing welfare state into a hypergrowth success story. This was partly a product of a right-wing party , which served as a minority partner in government. This party was recently annihilated in a general election, signaling a shifting of the political consensus to the left. This alone could be responsible for a shattering of confidence in Ireland’s future prospects.

Ireland’s economy, though liberal by world standards, is far from being free of government intereference. Big industry is tightly regulated, while railroads, roads, energy, health and transport are largely under government control. This, of course, diminishes the efficiency of these sectors. The impact of this state involvement was masked by commendable improvements in the „ease of doing business“ and a reduction of corporate tax to 12.5% and the top income tax rate to 41%. Banking and services sectors remained minimally regulated, attracting Google, Facebook, Daemonware, Merril Lynch etc. to create a significant presence here. High-end manufacturing also flocked to Ireland, but for much less salubrious reasons- to avail of generous subsidies and guarantees. Demographic, cultural, geographic, educational, geo-political and language reasons also played a pivotal role but that’s not relevant to this discussion.

Ireland became one of the top 5 wealthiest countries, surpassing the US in nominal (but not PPP) terms as regards to GDP per capita. The GINI score was moderate and certainly, despite the rapidity of the boom, society did not become more unequal. Quality of life was ranked as the world’s best by the Economist and immigration soared.

Then things started to take a turn for the worse. The ECB, which controls Irish and EMU monetary policy, kept interest rates excessively low in the context of the Irish economic climate. France, Germany and Italy, the 3 lumbering socialized giants, probably required rates of c. 2% to stimulate any semblance of economic activity. Unfortunately, Ireland became awash with cheap money which kick started a phenomenal and patently unsustainable housing boom. Average house prices reached €300000 before the collapse of demand in 2008. Clearly, the housing euphoria and the concomitant construction boom were a direct product of the unsuitable actions of the ECB.

Irish export industries have remained relatively stable due to buoyant demand in the Pharmaceutical industry, but of course the financial and construction sectors have evaporated. Ireland is not the basket case everyone is painting it to be. Debt to GDP is low and the state possesses disposable public assets. Irish people are still well paid and veritably rich in comparison to Britain or France. Unemployment is rising due to minimum wage and regulation induced price stickiness. However, the Irish labour market is flexible, lightly unionized and has the benefit of having a very low tax wedge, which ensures retention of competitiveness.

It is not the Irish economy, but the Irish government, which is in serious trouble. Projected deficits are €20 billion on expenditure of roughly €60 billion, but this includes bank bailouts. Taxes are being hiked to close the deficit but most of the reduction will come from spending cuts. Austrians should at least be pleased by this. The welfare state in Ireland is ludicrous. Unemployment benefit is €205 per week (no questions asked) or obligations) This a powerful disincentive to work.

Ireland, far from being a shining light of free-market Capitalism, has one of the most extensive welfare states on the planet. Do not confuse low taxes and financial engineering with laissez-faire.

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