Future of Ireland

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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

    1. 1. THE FUTURE OF IRELAND What Next ???
    2. 2. Background <ul><li>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. </li></ul>
    3. 3. Background <ul><li>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. </li></ul>Source: Newsweek Magazine
    4. 4. Change ? <ul><li>The evidence, in other words, strongly suggests that a market-based model is still the best way forward, or is it? </li></ul><ul><li>Substantial change must be made however in many key areas. </li></ul><ul><li>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. </li></ul>
    5. 5. Solutions ? <ul><li>The broader point here is that the market-based model must be combined with strong and effective government, nationally and transnationally. </li></ul><ul><li>This is to deal with critical challenges that markets won’t adequately address. </li></ul>Source: Newsweek Robert E. Rubin 2010 Former Secretary of the US Treasury (1995-1999)
    6. 6. Solutions ? <ul><li>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. </li></ul>
    7. 7. Ireland’s Situation <ul><li>In 2009 Ireland was spending €70 million a day!! </li></ul><ul><li>The National Debt is now almost €12 billion higher than previous years, as the tax take sinks by 19% </li></ul><ul><li>Tax Revenue has fallen by an unprecedented €7.7 billion </li></ul>Source: Irish Times / RTE
    8. 8. Ireland’s Situation <ul><li>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. </li></ul><ul><li>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. </li></ul>Source: Irish Times / RTE
    9. 9. Exchequer Balance <ul><li>2007 </li></ul><ul><li>Tax Revenue: €47 billion </li></ul><ul><li>Public Spending: €48 billion </li></ul><ul><li>Deficit: €1.6 billion </li></ul><ul><li>2009 </li></ul><ul><li>Tax Revenue: €33 billion </li></ul><ul><li>Public Spending: €56 billion </li></ul><ul><li>Deficit: €24.6 billion </li></ul>Source: RTE NEWS
    10. 11. European Debt / Population <ul><ul><li>UK - €800 billion </li></ul></ul><ul><ul><li>Belgium - €309 bn </li></ul></ul><ul><ul><li>France - €1.3 trillion </li></ul></ul><ul><ul><li>Germany - €1.6 tn </li></ul></ul><ul><ul><li>Italy - €1.6 trillion </li></ul></ul><ul><ul><li>Denmark - €78 bn </li></ul></ul><ul><ul><li>Austria - €176 bn </li></ul></ul><ul><ul><li>Greece - €237 bn </li></ul></ul><ul><ul><li>Netherlands - €346bn </li></ul></ul><ul><ul><li>61.3 million </li></ul></ul><ul><ul><li>10.7 million </li></ul></ul><ul><ul><li>64.1 million </li></ul></ul><ul><ul><li>82.1 million </li></ul></ul><ul><ul><li>59.8 million </li></ul></ul><ul><ul><li>5.4 million </li></ul></ul><ul><ul><li>8.3 million </li></ul></ul><ul><ul><li>11.2 million </li></ul></ul><ul><ul><li>16.4 million </li></ul></ul>Source: Reuters
    11. 12. Ireland <ul><ul><li>National Debt: </li></ul></ul><ul><ul><li>€ 75 billion </li></ul></ul><ul><ul><li>€ 17,045 each (per head) </li></ul></ul><ul><ul><li>owed by every man woman and child </li></ul></ul><ul><ul><li>Population: 4.4 million </li></ul></ul>
    12. 13. Ireland <ul><ul><li>€ 54 billion set aside for NAMA – not included in the previous figures and will not appear on the exchequer’s balance. </li></ul></ul><ul><ul><li>NAMA – National Asset Management Agency. </li></ul></ul><ul><ul><li>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. </li></ul></ul>
    13. 14. The United States <ul><li>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. </li></ul><ul><li>It is still the worst financial crisis since the 1930s however. </li></ul>
    14. 15. The United States <ul><li>US Deficit stands at $1.4 trillion for 2009 </li></ul><ul><li>$825 billion stimulus package has been introduced by President Obama. </li></ul><ul><li>The Strategy to stem the downturn in the economy is: </li></ul><ul><ul><li>To inject extra funds to stimulate the country in the hope that this will help the US economy in the longer term. </li></ul></ul><ul><ul><li>The Budget deficit will be 10% of national income. </li></ul></ul>
    15. 16. The United States <ul><li>The Strategy in the US is: </li></ul><ul><ul><li>Use the money for middle – class assistance. </li></ul></ul><ul><ul><li>Infrastructure Development </li></ul></ul><ul><ul><li>Direct aid to American States. </li></ul></ul><ul><ul><li>Jobs Programme </li></ul></ul><ul><ul><li>Green Energy Projects </li></ul></ul><ul><ul><li>Nuclear Energy Projects. </li></ul></ul>
    16. 17. Global Economy <ul><li>Although unemployment remains intolerably high, signs of recovery abound, and confidence is returning both to consumers and businesses in the States. </li></ul><ul><li>Globally the recovery has been even faster, with China, South Korea, Brazil and others enjoying an amazing rebound in exports. </li></ul>
    17. 18. The World Situation <ul><li>BUT HOLD THE APPLAUSE !! </li></ul><ul><li>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. </li></ul>Source: Newsweek Francis Fukuyama (Bernard L. Schwartz Professor of International Political Economy)
    18. 19. The 1930s <ul><li>During the great depression, when panicked governments erected trade barriers, devalued currencies, and thereby deepened and prolonged the suffering. </li></ul><ul><li>In doing so, they paved the way for Stalin’s collectivisation and Hitler and the Nazi Party. </li></ul>Source: Newsweek
    19. 20. The Current Situation <ul><li>Most nations have avoided the beggar-thy-neighbour protectionist policies of the 1930s. </li></ul><ul><li>We are not out of the woods yet – far from it! </li></ul>
    20. 22. The Current Situation <ul><li>There has been some serious income-distribution problems around the world. </li></ul><ul><li>Income has become more heavily distributed toward the most affluent. </li></ul><ul><li>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. </li></ul>Source: Newsweek
    21. 23. The Current Situation <ul><li>Other issues the market based model has not successfully addressed include serious, ongoing global trade and financial imbalances, climate change and poverty. </li></ul><ul><li>Ireland must also address the immediate need to strengthen the economy, create jobs and protect people affected by the crisis. </li></ul><ul><li>This is Ireland’s position in a global context. </li></ul>
    22. 25. Ireland <ul><li>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: </li></ul>
    23. 27. The Future ??? <ul><li>Education </li></ul><ul><li>Health-Care </li></ul><ul><li>Hospitals </li></ul><ul><li>Renewable Energy </li></ul><ul><li>Nuclear Energy ? </li></ul><ul><li>Infrastructure Projects </li></ul><ul><li>Fair Labour Markets </li></ul><ul><li>Basic Research </li></ul><ul><li>Equipping the Poor to enter the economic mainstream </li></ul><ul><li>And much else. </li></ul>
    24. 29. What does the future hold in store for Ireland ? What steps can Ireland take to make the future better for us all ?
    25. 30. What direction should Ireland steer a course for ?

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