Future of Ireland
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Future of Ireland

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Ireland Following Financial Crisis

Ireland Following Financial Crisis

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  • With that move came enormous economic progress in industrial countries, including the recovery of war-torn Europe and Japan and, as time went on, in various developing countries.
  • There have been serious problems with income-distribution around the world, despite strong growth and global integration.
  • We collectively must also address the immediate need to strengthen the economy via good Government, create jobs, and protect people affected by the economic crisis.

Future of Ireland Future of Ireland Presentation Transcript

  • THE FUTURE OF IRELAND What Next ???
  • Background
    • In the six decades since the end of the second world war, there has been a broad movement around the world toward a model of market-based economics, public investment and global integration.
  • Background
    • With that move came enormous economic progress in industrial countries, including the recovery of war-torn Europe and Japan and, as time went on, in various developing countries.
    Source: Newsweek Magazine
  • Change ?
    • The evidence, in other words, strongly suggests that a market-based model is still the best way forward, or is it?
    • Substantial change must be made however in many key areas.
    • Even before the recession hit, our current model had displayed major shortcomings that markets by their nature, won’t address and that need to be met through public policy.
  • Solutions ?
    • The broader point here is that the market-based model must be combined with strong and effective government, nationally and transnationally.
    • This is to deal with critical challenges that markets won’t adequately address.
    Source: Newsweek Robert E. Rubin 2010 Former Secretary of the US Treasury (1995-1999)
  • Solutions ?
    • We collectively must also address the immediate need to strengthen the economy via good Government, create jobs, and protect people affected by the economic crisis.
  • Ireland’s Situation
    • In 2009 Ireland was spending €70 million a day!!
    • The National Debt is now almost €12 billion higher than previous years, as the tax take sinks by 19%
    • Tax Revenue has fallen by an unprecedented €7.7 billion
    Source: Irish Times / RTE
  • Ireland’s Situation
    • The reason for the €11.9 billion year-on-year deterioration in the exchequer balance is in the main, though only in part, the €4 billion payment to bail out Anglo-Irish bank.
    • At the end of 2009 the budget deficit stood at a soaring €24.6 billion – almost €25 billion, compared with €12.7 billion deficit at the end of the previous year.
    Source: Irish Times / RTE
  • Exchequer Balance
    • 2007
    • Tax Revenue: €47 billion
    • Public Spending: €48 billion
    • Deficit: €1.6 billion
    • 2009
    • Tax Revenue: €33 billion
    • Public Spending: €56 billion
    • Deficit: €24.6 billion
    Source: RTE NEWS
  •  
  • European Debt / Population
      • UK - €800 billion
      • Belgium - €309 bn
      • France - €1.3 trillion
      • Germany - €1.6 tn
      • Italy - €1.6 trillion
      • Denmark - €78 bn
      • Austria - €176 bn
      • Greece - €237 bn
      • Netherlands - €346bn
      • 61.3 million
      • 10.7 million
      • 64.1 million
      • 82.1 million
      • 59.8 million
      • 5.4 million
      • 8.3 million
      • 11.2 million
      • 16.4 million
    Source: Reuters
  • Ireland
      • National Debt:
      • € 75 billion
      • € 17,045 each (per head)
      • owed by every man woman and child
      • Population: 4.4 million
  • Ireland
      • € 54 billion set aside for NAMA – not included in the previous figures and will not appear on the exchequer’s balance.
      • NAMA – National Asset Management Agency.
      • It is the set up of a “bad bank” – to manage the big bank’s bad loans…some regard this as a further “bail-out” of the banks if the loans are not repaid.
  • The United States
    • Deft handling of economic policies by the Federal Reserve and the Treasury Department under both Bush and the new Obama administration prevented the crisis from degenerating into a 1930s – style meltdown.
    • It is still the worst financial crisis since the 1930s however.
  • The United States
    • US Deficit stands at $1.4 trillion for 2009
    • $825 billion stimulus package has been introduced by President Obama.
    • The Strategy to stem the downturn in the economy is:
      • To inject extra funds to stimulate the country in the hope that this will help the US economy in the longer term.
      • The Budget deficit will be 10% of national income.
  • The United States
    • The Strategy in the US is:
      • Use the money for middle – class assistance.
      • Infrastructure Development
      • Direct aid to American States.
      • Jobs Programme
      • Green Energy Projects
      • Nuclear Energy Projects.
  • Global Economy
    • Although unemployment remains intolerably high, signs of recovery abound, and confidence is returning both to consumers and businesses in the States.
    • Globally the recovery has been even faster, with China, South Korea, Brazil and others enjoying an amazing rebound in exports.
  • The World Situation
    • BUT HOLD THE APPLAUSE !!
    • Even the good news isn’t all good. In an odd way, the recovery may have come too soon – since it’s meant that the crisis never got bad enough to force the kind of lasting solutions the United States, and the world , badly needed.
    Source: Newsweek Francis Fukuyama (Bernard L. Schwartz Professor of International Political Economy)
  • The 1930s
    • During the great depression, when panicked governments erected trade barriers, devalued currencies, and thereby deepened and prolonged the suffering.
    • In doing so, they paved the way for Stalin’s collectivisation and Hitler and the Nazi Party.
    Source: Newsweek
  • The Current Situation
    • Most nations have avoided the beggar-thy-neighbour protectionist policies of the 1930s.
    • We are not out of the woods yet – far from it!
  •  
  • The Current Situation
    • There has been some serious income-distribution problems around the world.
    • Income has become more heavily distributed toward the most affluent.
    • In India and China, although great numbers of people have risen out of poverty, substantial portions of their populations remain very poor, while a very small group has developed immense wealth.
    Source: Newsweek
  • The Current Situation
    • Other issues the market based model has not successfully addressed include serious, ongoing global trade and financial imbalances, climate change and poverty.
    • Ireland must also address the immediate need to strengthen the economy, create jobs and protect people affected by the crisis.
    • This is Ireland’s position in a global context.
  •  
  • Ireland
    • Public investments and other policy measures should aim to deal with areas that are absolutely critical to growth and widespread income participation that markets will not adequately address, such as:
  •  
  • The Future ???
    • Education
    • Health-Care
    • Hospitals
    • Renewable Energy
    • Nuclear Energy ?
    • Infrastructure Projects
    • Fair Labour Markets
    • Basic Research
    • Equipping the Poor to enter the economic mainstream
    • And much else.
  •  
  • What does the future hold in store for Ireland ? What steps can Ireland take to make the future better for us all ?
  • What direction should Ireland steer a course for ?
  •