The Great Recession:
An Irish Perspective
Frances Ruane

Athens Biennale, October 12, 2013
Society and the Great Recession..








Return to more sombre times in Ireland BUT
Seamus Heaney (2009) said that ...
Key Features of the Irish Economy









Strong multinationals in high-growth sectors
Services are really import...
Impact of the Great Recession
Growth

Unemployment
Migration

Public Finances
Poverty and Equality

Government response re...
Irish Real GDP Growth 1948 – 2012
14
12
10

8
6
4
2
0
-2
-4
-6
-8
1949

1954

1959

1964

1969

1974

1979

1984

GDP Grow...
Irish Growth Performance in Context
% change

Ireland
Spain
Portugal

Greece
Employment and Unemployment Rates (%)
2000 - 2012

%

Employment rate

Unemployment rate

%
Net Migration, Immigration and Emigration
200

Thousands

150

100
50

0
-50
-100
-150
1987

1992
Emigration

1997
Immigra...
Public Finances – Debt to GDP Ratio
140

120

100

80

60

40

20

0
1995

1997

1999

2001

2003

2005

Debt as a percent...
Poverty, Deprivation & Inequality rates
%

%
Gini coefficient

At Risk of Poverty

Deprivation

Consistent Poverty
Budget 2009
0.0
-1.0

1

2

3

4

5

6

7

8

9

10

-2.0

Income distribution
effects of First
Austerity Budget
supported...
Distributive impact on Households containing
an elderly person Vs with a child
Budgets 2009-2012

WHY?
The Grey Protest, September 2008

13
Ireland’s Future Growth Prospects
 EU

stability/performance is crucial
 Growth depends mostly on exports
 EU-27/US are...
GDP Growth

6.0%

5.0%

WORLD

4.0%

3.0%

2.0%

1.0%

0.0%
1980
-1.0%

1985

1990

1995

2000

2005

2010

2015

2020

Gl...
GDP Growth

8.0%

6.0%

WORLD
4.0%

US

2.0%

EU
0.0%
1980

1985

1990

1995

2000

2005

2010

2015

2020

-2.0%

-4.0%

...
GDP Growth
16.0%
14.0%
12.0%
10.0%

CHINA

8.0%
6.0%
4.0%

WORLD

2.0%
0.0%
1980

1985

1990

1995

2000

2005

2010

2015...
Ireland’s Growth Prospects: Scenarios


Recovery scenario





Delayed Adjustment scenario





Recovery in the EU
...
GNP
180000

170000
160000
150000

140000
130000
120000

110000
100000
2000

2005
Recovery

2010
Stagnation

2015
Delayed A...
Debt / GNP Ratio
170
160
150
140

130
120
110
100
90
80
2010

2012
Recovery

2014
Stagnation

2016

2018

Delayed Adjustme...
Unemployment Rate
16

14
% of Labour Force

12
10

8
6
4

2
0
2010

2012
Recovery

2014
Stagnation

2016

2018

Delayed Ad...
Public Finances – Current Debate











Balance between expenditure and taxation –
has been 2:1 formula through...
Trade Union March, 2012

23
Economic Overview
Austerity approach has been painful
 Social Response has been relatively muted ..
 Distribution effect...
Looking Forward..

Creativity
Transformation
Flexibility
Innovation
25
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4th Athens Biennale 2013
12/10/13

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  • Presentation frances ruane

    1. 1. The Great Recession: An Irish Perspective Frances Ruane Athens Biennale, October 12, 2013
    2. 2. Society and the Great Recession..       Return to more sombre times in Ireland BUT Seamus Heaney (2009) said that people do not live by economics alone: “if poetry and the arts can do anything, they can fortify your inner life, your inwardness” Creativity in all domains has strengthened Feeding into theatre, film, art, novels and poetry Feeding into new businesses and new ideas 2 But there have been great costs ...
    3. 3. Key Features of the Irish Economy         Strong multinationals in high-growth sectors Services are really important Strong domestic food sector Significant tourism BUT High wage costs and high prices Strong vested interests (e.g. Professions) Pub Sector efficiency needs to increase Troika has been important 3
    4. 4. Impact of the Great Recession Growth Unemployment Migration Public Finances Poverty and Equality Government response required austerity plus solidarity 4
    5. 5. Irish Real GDP Growth 1948 – 2012 14 12 10 8 6 4 2 0 -2 -4 -6 -8 1949 1954 1959 1964 1969 1974 1979 1984 GDP Growth rate 1989 1994 1999 2004 2009 5
    6. 6. Irish Growth Performance in Context % change Ireland Spain Portugal Greece
    7. 7. Employment and Unemployment Rates (%) 2000 - 2012 % Employment rate Unemployment rate %
    8. 8. Net Migration, Immigration and Emigration 200 Thousands 150 100 50 0 -50 -100 -150 1987 1992 Emigration 1997 Immigration 2002 2007 Net Migration 2012
    9. 9. Public Finances – Debt to GDP Ratio 140 120 100 80 60 40 20 0 1995 1997 1999 2001 2003 2005 Debt as a percentage of GDP 2007 2009 2011 9
    10. 10. Poverty, Deprivation & Inequality rates % % Gini coefficient At Risk of Poverty Deprivation Consistent Poverty
    11. 11. Budget 2009 0.0 -1.0 1 2 3 4 5 6 7 8 9 10 -2.0 Income distribution effects of First Austerity Budget supported Solidarity -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 -9.0 Budgets 2009 to 2013 0.0 Income Distribution Effects of Cumulative Austerity Budgets -2.0 1 2 3 4 5 6 7 8 9 10 -4.0 -6.0 -8.0 -10.0 -12.0 -14.0 Percentage changes in income by Decile 11
    12. 12. Distributive impact on Households containing an elderly person Vs with a child Budgets 2009-2012 WHY?
    13. 13. The Grey Protest, September 2008 13
    14. 14. Ireland’s Future Growth Prospects  EU stability/performance is crucial  Growth depends mostly on exports  EU-27/US are our major markets  Can Ireland recover?  Confidence is crucial for growth  Uncertainty abounds .. 14
    15. 15. GDP Growth 6.0% 5.0% WORLD 4.0% 3.0% 2.0% 1.0% 0.0% 1980 -1.0% 1985 1990 1995 2000 2005 2010 2015 2020 Global Growth potential but ... 15
    16. 16. GDP Growth 8.0% 6.0% WORLD 4.0% US 2.0% EU 0.0% 1980 1985 1990 1995 2000 2005 2010 2015 2020 -2.0% -4.0% Lower in our key markets -6.0% 16
    17. 17. GDP Growth 16.0% 14.0% 12.0% 10.0% CHINA 8.0% 6.0% 4.0% WORLD 2.0% 0.0% 1980 1985 1990 1995 2000 2005 2010 2015 2020 -2.0% => Higher growth means entering new markets 17
    18. 18. Ireland’s Growth Prospects: Scenarios  Recovery scenario    Delayed Adjustment scenario    Recovery in the EU National macro strategies work out EU recovery Domestic recovery delayed (policy failure) Stagnation scenario   EU stagnation National macro strategies cannot work ESRI Medium Term Review 2013
    19. 19. GNP 180000 170000 160000 150000 140000 130000 120000 110000 100000 2000 2005 Recovery 2010 Stagnation 2015 Delayed Adjustment 2020
    20. 20. Debt / GNP Ratio 170 160 150 140 130 120 110 100 90 80 2010 2012 Recovery 2014 Stagnation 2016 2018 Delayed Adjustment 2020
    21. 21. Unemployment Rate 16 14 % of Labour Force 12 10 8 6 4 2 0 2010 2012 Recovery 2014 Stagnation 2016 2018 Delayed Adjustment 2020
    22. 22. Public Finances – Current Debate        Balance between expenditure and taxation – has been 2:1 formula throughout Approach: Deliver on agreement with Troika Current Options : 1: Cut by €3.1bn – as per Troika Agreement ( 2: Take benefit of increased recent performance and cut by less the €3.1bn Government and Troika: €2.5 bn Solidarity Focus
    23. 23. Trade Union March, 2012 23
    24. 24. Economic Overview Austerity approach has been painful  Social Response has been relatively muted ..  Distribution effects have helped solidarity  Delivery on promises rewarded by market  BUT  Many old legacy issues not yet tackled  New legacy issues will need to be sorted  Looking forward 
    25. 25. Looking Forward.. Creativity Transformation Flexibility Innovation 25

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