Canada Vol.57 (Ontario – Niagara Region)

Niagara Falls

St. Catharines


https://twitter.com/TourismSTC/status/1436087023639617540

Welland


https://twitter.com/niagaracollege/status/1103660592345296902
https://twitter.com/WellandTribune/status/1438959719511695370
https://twitter.com/WellandTribune/status/1438834817722880006
https://twitter.com/WellandTribune/status/1438833129049964547


World Vol.135 (U.S., etc.)


https://twitter.com/PrincetonSPIA/status/1395753248410279936
https://twitter.com/PrincetonSPIA/status/1394698757988552710


https://twitter.com/rockfordw/status/1393232361886785539


https://twitter.com/KKertysova/status/1395093524639625223


UK Vol.183 (Scottish Parliamentary and Welsh Senedd elections)


https://twitter.com/instituteforgov/status/1390247466516172801


https://twitter.com/clydebank_snp/status/1390015766553051139
https://twitter.com/AlexSalmond/status/1390078089389031428


https://twitter.com/scottishgreens/status/1389952912508571648


https://twitter.com/ScotNational/status/1389949754931564546


https://twitter.com/art_iculate/status/1389107553481678848


https://twitter.com/AndyMacMillan14/status/1389259486041448456


https://twitter.com/Politics_co_uk/status/1390010910635343872
https://twitter.com/Politics_co_uk/status/1389882570209468418
https://twitter.com/Politics_co_uk/status/1389875013210214405
https://twitter.com/TelePolitics/status/1390169960861863938
https://twitter.com/TelePolitics/status/1390135741326450696
https://twitter.com/TelePolitics/status/1390103332325314561
https://twitter.com/TelePolitics/status/1389941576433078278
https://twitter.com/TelePolitics/status/1389661194328449030


https://twitter.com/LiamFox/status/1387874637837701120


https://twitter.com/RenCouncil/status/1389988473264869377
https://twitter.com/AlbaParty/status/1389889322166411265


https://twitter.com/BBCWales/status/1389846085703770112
https://twitter.com/BBCWales/status/1388131545735630854
https://twitter.com/BBCWales/status/1388448119210221570
https://twitter.com/BBCWales/status/1388070678075744259


https://twitter.com/nationalwales/status/1389979861511458821
https://twitter.com/RICSWales/status/1390244091821166598
https://twitter.com/NationCymru/status/1390241383382925315


https://twitter.com/SeneddWales/status/1390246674627444736
https://twitter.com/YesCymru/status/1382788457672683522
https://twitter.com/Plaid_Cymru/status/1385677355067138048
https://twitter.com/Plaid_Cymru/status/1389248383240527876


https://twitter.com/WalesGreenParty/status/1389955085808111617
https://twitter.com/Politics_co_uk/status/1389999583770472452


U.S. universities and colleges Vol.40 (UCF) / Florida Vol.16


https://twitter.com/UCFSciences/status/1357690444054814721


https://twitter.com/UCF_Arboretum/status/1349751143614746629
https://twitter.com/UCFALUMNI/status/1349409938163048451


https://twitter.com/UCFGallery/status/1348730573762617346


https://twitter.com/UCFKnights/status/1341127553088536576
https://twitter.com/UCFBusiness/status/1359890441878065152
https://twitter.com/UCFBusiness/status/1354469976065925123
https://twitter.com/UCFBusiness/status/1349370121219940352
https://twitter.com/UCFBusiness/status/1340046743719833606
https://twitter.com/ucfcah/status/1359611033099390980
https://twitter.com/ucfcah/status/1362114592680390661


https://twitter.com/UCF/status/1352321563593347072
https://twitter.com/UCF/status/1351634536334057472
https://twitter.com/UCF/status/1343294833679470593
https://twitter.com/UCF/status/1347995809489453058
https://twitter.com/UCF/status/1347640719918317568
https://twitter.com/UCF/status/1344694557032767492
https://twitter.com/UCF/status/1344323612753485826
https://twitter.com/UCF/status/1344027662482718720
https://twitter.com/UCF/status/1343560081552646144
https://twitter.com/UCF/status/1362863275227054080
https://twitter.com/UCF/status/1362761102203842569
https://twitter.com/UCF/status/1362454834008399874
https://twitter.com/UCF/status/1362422118411997189
https://twitter.com/UCF/status/1361358610631069696
https://twitter.com/UCF/status/1360268930460254208
https://twitter.com/UCF/status/1359956351573766145
https://twitter.com/UCF/status/1359930418741534729
https://twitter.com/UCF/status/1359915602169786371
https://twitter.com/UCF/status/1359877853467189250
https://twitter.com/UCF/status/1358875246976143361
https://twitter.com/UCF/status/1358501534502326274
https://twitter.com/UCF/status/1358077238860603393
https://twitter.com/UCF/status/1357824581625647105
https://twitter.com/UCF/status/1357745553174654981
https://twitter.com/UCF/status/1357486093461954560
https://twitter.com/UCF/status/1357344410854256643
https://twitter.com/UCF/status/1356632954043330560
https://twitter.com/UCF/status/1354837066891358210
https://twitter.com/UCF/status/1352665328430542848
https://twitter.com/UCF/status/1350123831982125059
https://twitter.com/UCF/status/1348773182149337088
https://twitter.com/UCF/status/1347570014300352515
https://twitter.com/UCF/status/1341036201617272832
https://twitter.com/UCF/status/1340773973060186119


World Vol.88 (U.S., Canada, Australia, New Zealand, etc.)


https://twitter.com/CBC/status/1352647214418579468


US Presidential Election 2020 Vol.2 (Brookings Institution)


Northern Europe Vol.2 (incl #coronavirus)


https://twitter.com/WeBuildProgress/status/1249862775926636547


https://twitter.com/urbanthoughts11/status/1146497546120048640


https://twitter.com/VisitCopenhagen/status/1151482832650457088
https://twitter.com/GoVisitDenmark/status/1155147152995291136


https://twitter.com/FinnEmbassyDC/status/1194337346453299202


https://twitter.com/uibgeo/status/1113898823892520961
https://twitter.com/GraihaghJackson/status/1187888362771759104


https://twitter.com/NorwayinCanada/status/1186715573801099264
https://twitter.com/NorwayinIreland/status/1148699267743330304


https://twitter.com/saochair/status/1174344401038036994
https://twitter.com/IcelandArctic/status/1169621098083864576


https://twitter.com/CaixaCienciaCAT/status/1200708546448515072


https://twitter.com/swedeninuk/status/1195326183107420161
https://twitter.com/swedense/status/1120942206293106688


World Vol.15 (U.S. universities)


UK Vol.152 (think tanks)


https://twitter.com/tradegovuk/status/1157191803524698112


https://twitter.com/USAinUK/status/1144217957519826944


https://twitter.com/LiamFox/status/1143571804981776391


https://twitter.com/ZackPolanski/status/1146354545389428736


https://twitter.com/soclibforum/status/1153684139465482242


https://twitter.com/FPCThinkTank/status/1153234580905873410


https://twitter.com/FPCThinkTank/status/1124285573533974529


U.S. universities and colleges Vol.4 (universities)


https://twitter.com/LinderPG/status/1136634669175324672


Virginia Vol.3


https://twitter.com/virginia_tech/status/1007751433020682240


https://twitter.com/VT_Mag/status/1009790625439502336


https://twitter.com/rmeese/status/1002527545261264896


Wisconsin Vol.2

Wisconsin1
Wisconsin2


https://twitter.com/lourryinmyheart/status/755534062794649600


https://twitter.com/UWStevensPoint/status/993611485430669313


https://twitter.com/uw_superior/status/988843093993709568


https://twitter.com/UWM/status/999003223955566592


Minnesota Vol.3

Limestone. Silica sand. Kaolin clay.


Switzerland Vol.1

Switzerland_Cantons
Switzerland_Mountains
Switzerland_Linguistic


Cantons of Switzerland | TRAMsoft GmbH
The 10 Most Populous Cities In Switzerland | World Atlas
Switzerland’s Political System and Government | ALL ABOUT SWITZERLAND
The Federal Council, The portal of the Swiss government
Switzerland’s direct democracy (YouTube)
What Type Of Government Does Switzerland Have? | World Atlas
This is how Switzerland’s direct democracy works (31/07/2017) | Micol Lucchi WEF
Switzerland’s People Power (04/20/2017) | Catherine Bosley BLOOMBERG
7 Reasons Why Switzerland Is The Best-Run Country In The World (12/11/2012) | Max Nisen BUSINESS INSIDER
Switzerland Celebrates Europe’s Strangest System of Government (21/09/2017) | Mathieu von Rohr SPIEGEL ONLINE
The Swiss Cantonal System: A Model democracy (03/12/2000) | LIBERTY INTERNATIONAL
How Switzerland’s cabinet works – Politics in Switzerland | Just Landed
Switzerland’s 18 living ex-presidents: a political record (07/12/2017) | Thomas Stephens SWI
The political System of Switzerland | SwissCommunity
Switzerland Government | GraphicMaps
Switzerland Corruption Report | GAN BUSINESS ANTI-CORRUPTION Portal
SECRETS OF SWISS SUCCESS – LESSONS FOR NEW ZEALAND (PDF) | Oliver Hartwich The Centre for Independent Studies
https://twitter.com/Martin_Dahinden/status/984800784985526272


https://twitter.com/Swiss_Pavilion/status/897444359389552642


https://twitter.com/SwissCGNY/status/972158044732837888

https://twitter.com/BF_Nordics/status/987253273471184899


Mississippi Vol.2

Mississippi State 1


Government of Mississippi State Mississippi Maps
Government of Mississippi State Chamber of Commerce
Government of Mississippi State Economic Development
Economy of Mississippi State | @EconomyWatch
Mississippi Economy
Mississippi state budget and finances | @ballotpedia
Mississippi Agriculture Overview
@MSManufacturers
Mississippi Automotive Manufacturers Association (MAMA)
@mdaworks AUTOMOTIVE
Mississippi State University Office of Technology Management


cf.


Ireland Vol.29 (Economy, et al. – institutes of technology, counties, chambers, LEOs, et al.)

Carlow


Wexford


Waterford


Cork


Sligo


https://twitter.com/itsligoglobal/status/971773068581498882


Galway


Clare


Limerick


https://twitter.com/LimerickIT/status/972177745668136962


https://twitter.com/LimerickIT/status/971427484473413632


Kerry
https://twitter.com/TraleeAlliance/status/959086796004057090


Ireland Vol.28 (Economy, et al. – institutes of technology/universities, counties/cities, chambers, LEOs, et al.)

Donegal


https://twitter.com/DonegalMaps/status/974600619494428672


Louth


Kildare


Westmeath


County Dublin
Fingal


https://twitter.com/itbdublin/status/973148534311718912


https://twitter.com/DubBayPrawnFest/status/975705046628302848


South Dublin


Dún Laoghaire-Rathdown


City of Dublin


https://twitter.com/ucddublin/status/973959143055872001
https://twitter.com/DublinCityUni/status/976458468319285248


MISCELLANEOUS


Germany Vol.6 (Grand Coalition 2018 #GroKo, et al.)

Germany1Germany2
Germany: Merkel’s next cabinet shows youth trend (11/03/2018) | @dwnews
MINISTERS UNDER MERKEL: GERMANY’S NEW GOVERNMENT
Chancellor: Angela Merkel (CDU)
Chief of Staff at the Chancellery: Helge Braun (CDU)
Minister of the Interior, Heimat and Construction: Horst Seehofer (CSU)
The fight for the Foreign Ministry: Heiko Maas (SPD)
Finance Minister: Olaf Scholz (SPD)
Minister of Defense: Ursula von der Leyen (CDU)
Economic and Energy Affairs Minister: Peter Altmaier (CDU)
Minister of Justice and Consumer Protection: Katarina Barley (SPD)
Minister of Labor and Social Affairs: Hubertus Heil (SPD)
Minister for the Environment: Svenja Schulze (SPD)
Minister for Health: Jens Spahn (CDU)
Minister of Education and Research: Anja Karliczek (CDU)
Minister for Family Affairs, Senior Citizens, Women and Youth: Franziska Giffey (SPD-Mayor Berlin-Neukolln)
Minister of Economic Cooperation and Development: Gerd Muller (CSU)
Minister of Transport and Digital Infrastructure: Andreas Scheuer (CSU)
Minister for Food and Agriculture: Julia Klockner (CDU)
@cducsubt @CDU @CSU
@spdde
German Elections: Mapping Economic Policy Preferences (09/14/2017) | Caspar Kolster @gmfus
Germany: A New Government Is off to a Weak Start (03/14/2018) | @stratfor
Coalition watch – The making of a new German government (14/03/2018) | Soren Amelang, Kerstine Appunn, Sven Egenter, Benjamin Wehrmann, Julian Wettengel CLEW
Angela Merkel sworn in for fourth term as German Chancellor (03/14/2018) | Judith Vonberg @CNN
Angela Merkel re-elected as German chancellor to fourth term after five months of political deadlock (14/03/2018) | @tomemburyd @independent
The SPD just won the Frankfurt mayoralty in a landslide. So why are Germany’s cities going red? (03/15/2018) | Stephen Jorgenson-Murray @CityMetric
Merkel secures fourth term in power after SPD backs coalition deal (04/03/2018) | Philip Oltermann @guardian
The last thing Germany – and Europe – needs is a grand coalition (23/02/2018) | Timothy Garton Ash @guardian
German coalition talks to continue on Monday and focus on health and labor (02/04/2018) | Michelle Martin & Andreas Rinke @reuters
https://twitter.com/dw_politics/status/973993118608568330


https://twitter.com/dw_politics/status/973925892375367680
https://twitter.com/dw_politics/status/973895254494646272


https://twitter.com/dw_politics/status/973847104207622144


https://twitter.com/MattSmithWales/status/921700025381597184


Germany Vol.5 (Economy, et al.)

Germany’s Economy: Successes and Challenges (11/28/2017) | Kimberly Amadeo @thebalance
The Economic Miracle and Beyond
Germany: The Party System from 1963 to 2000 | Kimberly A. Allan
Focus Germany @DeutscheBank #dbresearch
How the German elections may affect Brexit | @leopoldtraugott @OpenEurope
German elections: Merkel looking for a (new) deputy (08/29/2017) | Daniel van Schoot and Stefan Koopman
Deutsche Bundesbank
Deutsche Bank
Commerzbank A.G.
KfW Group
DZ Bank Group
UniCredit Bank AG (HypoVereinsbank)
Landesbank Baden-Wurttemberg
Bayerische Landesbank
Norddeutsche Landesbank Girozentrale
Helaba
Germany | @TheEconomist
Articles on German politics | @ConversationUS
https://twitter.com/fnfnorthamerica/status/970715584538267648


https://twitter.com/boell_us/status/936310323291787265


https://twitter.com/GGrimalda/status/951775509054095360


Ireland Vol.6 (Economic Crises and the Changing Influence of the Irish Congress of Trade Unions on Public Policy)

Here is a paper, Economic Crises and the Changing Influence of the Irish Congress of Trade Unions @irishcongress on Public Policy (PDF, 2010) | Dr John Hogan, Dublin Institute of Technology @ditofficial. Underlines, italicization, excerpts, et al. are on our own.

Abstract

This chapter examines the dramatic changes in the Irish Congress of Trade Unions’ (ICTU) influence over public policy during the latter half of the twentieth century.  The chapter focuses upon the impact economic crises have had on the ICTU’s role in policy-making.  The chapter concentrates, in particular, upon four periods, the late 1950s, 1970, the early 1980s and 1987, when the ICTU found its influence over public policy radically transformed.  By the late 1950s the trade union movement was invited into the policy-making process by a government desperate to revive a sclerotic economy.  During the following decade the ICTU played an integral part in the development of economic and social programmes.  In 1970, due to concerns over inflation and the increasing level of industrial disputes, the ICTU, initially under government pressure, became a party to centralised bargaining.  The National Wage Agreements that the ICTU was a party to during that decade were marked by their integration with government budgetary policy.  With active state involvement in industrial relations came ICTU involvement in policy-making.  However, by the early 1980s the Irish economy was in serious difficulties again.  This, combined with trade union and employer disillusionment that the centralised agreements were not achieving their respective objectives of full employment and low inflation and a new collation government determined to remove the unions from the corridors of power, led to the collapse of the national agreements and ICTU finding itself shut out of the policy-making process.  The years afterwards saw the economy continue to stagnate and the ICTU marginalised as a policymaking influence.  By 1987, with Ireland teetering on the brink of bankruptcy, a new Fianna Fáil government came to power seeking to promote a three year national pay agreement with the unions and employers, in the hopes of reviving the economy.  The ICTU, weakened through marginalisation and membership losses, favoured a return to centralised pay agreements.  However, these agreements ultimately came to encompass a wide range of economic/social policy commitments that went far beyond the agreements of the 1970s.

INTRODUCTION

Over the last half century, there has been a series of dramatic changes in the influence of the Irish Congress of Trade Unions (ICTU) on public policy.  This chapter examines those changes, highlighting the circumstances under which they occurred and the kinds of influence the ICTU gained and lost, as a result of its fluctuating fortunes.

By the late 1950s, the Irish economy was in serious difficulty and a mood of despair pervaded society.  Into this environment came Seán Lemass, the new Taoiseach and leader of the largest party, Fianna Fáil.  Lemass introduced new ideas on how to manage the economy and how to reform the country’s relationship with the world.  His ideas and influence transformed economic policy and had a profound influence on the role of trade unions in the formulation of public policy.

The growing economic openness of the 1960s produced incentives for new patterns of collective bargaining.  Ireland had come to rely on foreign direct investment (FDI) to promote industrialisation and employment.  In response, from the 1970s onwards, public policy was directed towards minimising strikes and restraining pay increases: ‘the then Fianna Fáil government of Jack Lynch brought the trade union movement into the policy-making process as a way of ensuring economic stability’.

However, by the early 1980s, the economy had deteriorated.  Although centralised agreements between the employers, the government and the ICTU were the hallmark of industrial relations during the 1970s, they were not achieving the unions’ objectives.  This led to reluctance on the part of the ICTU to continue participating in these agreements.  Irrespective of the unions’ attitude, they were excluded from the policy-making environment by the Fine Gael and Labour coalition government (1982-1987) as economic decline gathered momentum.

By 1987, the economy reached a historic nadir.  In response, a new Fianna Fáil minority administration sought a centralised pay agreement with the ICTU and the employers, bringing the unions’ influence directly back into the corridors of power.  This was to be the first of a series of such agreements.  The social partnership born of these agreements contributed to the transformation of society over the following decades.

The chapter is divided into four sections, each one of which deals with a particular period – the late 1950s–mid 1960s, mid 1960s–late 1970s, the early 1980s and the late 1980s – that saw the ICTU’s influence on public policy transformed.  Each section begins with a discussion on the economy at that time and the impact that this had upon government thinking.  Thereafter, the section moves on to examine how economic circumstances impacted upon the relations and interactions between the government and the trade union movement.

THE TRANSFORMATION OF THE TRADE UNIONS’ ROLE IN SOCIETY (1950s – MID 1960s)

The trade union movement expanded with industrialisation in the 1930s.  However, with industrialisation came inter-union rivalry.  During the 1940s Seán Lemass, then Minister for Industry and Commerce, sought to encourage trade union rationalisation.  However, efforts to rationalise the unions created tensions that fissured the movement.  In April 1945, 15 Irish-based unions withdrew from the Irish Trades Union Congress (ITUC) and established the Congress of Irish Unions (CIU).  The existence of two rival congresses weakened the movement’s efforts, dissipated resources and rendered a common front against employers impossible.  However, in 1956, a Provisional United Trade Union Organisation was set up to co-ordinate the activities of both congresses, with a view to reunification.

The general election of 1957 resulted in a Fianna Fáil victory, and saw its 75-year-old leader, Éamon de Valera, form his final administration.  The year ‘1957 is conventionally thought of as the end of an era, marking the final exhaustion of the ideas of the first generation of political leaders’.  Two years later, de Valera was succeeded as Taoiseach by Seán Lemass.  Lemass, although almost 60, and a lifelong follower of De Valera, was nevertheless to stand for a clean break with the policies of the past and was to oversee the opening of the country’s economy.  The transformative impact of his innovative leadership, upon a then poor and insular Ireland, was to constitute the foundations upon which modern Ireland is built.

The Economic Stagnation of the 1950s

From the late 1940s onwards, the Irish economy stagnated.  Ó Gráda and O’Rourke argue that ‘in the 1950s, Ireland’s relative [economic] performance was disastrous, poorer than the European average’.  The benefits from protection had been reaped by the industrial expansion of the 1930s.  The post-war economic boom petered out at the end of the 1940s.  By the 1950s, Irish industry was supplying as much of the domestic market as it could.

OECD analysis showed agricultural production was abnormally low, while industrial output was faltering.  Per capita GNP grew at 2.4 per cent throughout the 1950s, but only because of ‘the exceptional demographic experience during this period when net migration averaged forty-one thousand persons a year’.  Yet, even this growth rate was among the lowest in the OECD.  Although employment in the economy was falling, the cost of living was still high.  The impact of these disastrous figures upon the populace at large cannot be underestimated.

In 1957, manufacturing output was no higher than in 1953, while building activity declined.  Between 1951 and 1958, GDP rose by less than one per cent per annum, employment declined by 12 per cent, unemployment rose and half a million people emigrated.  By the late 1950s, the outlook for the economy was depressing, while Europe was achieving strong and sustained growth.

The Government’s Response to the Economy

Upon his appointment as Minister for Industry and Commerce, in the new Fianna Fáil government of 1957, Lemass began implementing policies opening the state to foreign investment.  Despite fears over the competitiveness of protected Irish industry, the pressure for change increased.  By the end of the decade, both the government and opposition recognised the crisis facing the country.  During the Dáil debate on Lemass’s nomination as Taoiseach, Daniel Desmond of the Labour Party argued that it was time for the political establishment to realise that solving the problems with the economy superseded their own struggles for power.  On becoming Taoiseach in 1959, Lemass stated that the task was to consolidate the economic foundations of independence.  He brought to government vigorous entrepreneurial leadership.

The crisis in the economy prompted a fundamental reappraisal of the policies pursued up to that time.  Into this pessimistic environment came T.K. Whitaker’s report, Economic Development, in 1958.  Whitaker, then Secretary of the Department of Finance, was committed to export-led growth.  He advanced a strategy within the finance department of more planning, fewer tariff barriers and greater emphasis on productive investment: ‘It was in the atmosphere of a new government and a more active and interventionist Department of Finance, that Economic Development was born’.

This document was ‘a watershed in the modern economic history of the country’.  It proposed the gradual transition to free trade, stimulation of private investment, the reorientation of government investment towards more productive uses, the introduction of grants and tax concessions to encourage export orientated manufacturing and the inducement of FDI oriented manufacturers.  The document advocated abandoning the protectionism Fianna Fáil had pioneered since the 1930s.  These measures were incorporated into the First Programme for Economic Expansion in November 1958.  This White Paper, based on Whitaker’s document, ‘was drawn up by Charles Murray of the Department of Finance, supervised by a four-member Government subcommittee headed by Lemass’.  The fact that Lemass was involved in the White Paper ensured that the essence of Economic Development’s recommendations remained intact:

While there were some significant differences between Economic Development and the [First] Programme for Economic Expansion, which arose out of their different parentage, such differences were for the most part cosmetic as the main thrust of both documents was the same.

The ICTU Brought in from the Cold

The ITUC and CIU eventually reunited after 15 years apart.  The absence of ideological and organisational differences between the congresses made the process of reunification easier. …

Soon after Lemass became Taoiseach he sought a meeting with the ICTU to discuss the challenges facing the economy and how co-operation might be fostered between the various economic interests.  The number of meetings between the new Taoiseach and the unions increased thereafter, whereas there had been little interaction with de Valera.  These meetings covered a range of issues, from the economy to the prospects of Ireland joining the European Economic Community (EEC).  This development was in line with the calls for consultation between state, unions and employers contained in the First Programme for Economic Expansion.

The Fianna Fáil government’s 1958 and 1959 budgets reflected a change in fiscal policy.  Lemass’s speeches in 1959 often paralleled the positions adopted by the ICTU.  These included the need for state involvement in development and the expansion of the state sector.  The ICTU argued that the government should pump-prime the economy for growth and that capital investment should not be pursued to the detriment of social spending.  Within a year of Lemass becoming Taoiseach, budgets began expanding, with increased investment in areas identified by Congress.  By 1961, the reshaping of public capital expenditure, to give increased emphasis to directly productive investment, something the trade unions had argued for, stimulated economic growth.  A policy of grants and tax exemptions attracted foreign capital and the government also pursued an increasingly liberal trade policy.

The Unions and Their Role in Policy Development

Until the 1950s, the unions’ influence was largely indirect.  However, during the late 1950s, the government’s policies began to reflect those of the unions.  Lemass’s perspective on economic development was close to that of Congress.  In June 1959, Lemass remarked on the need for change in industrial development policy.  The government began to regard the trade union movement in general, and the united Congress in particular, as both an ally and supporter of its programme for national development.  The task of adjusting industries to competition led public policy into the realms of labour practices, industrial relations and pay bargaining.  In return, Lemass was prepared to offer the unions an integral part in the development of economic and social programmes:

He [Lemass] clearly understood that the government would have to play a more active, even hegemonic, role in the Irish economy, but he also realised that the success of government strategy assumed a new partnership with different interest groups, which would (in time) become players in the policy game.

In 1961, the ICTU and the Federated Union of Employers (FUE) reached agreement on the formation of the Employer-Labour Conference (ELC), which the government subsequently facilitated.  This body became central to corporatist control.  The unions’ increasing influence was visible in all areas of government policy.  For instance, the 1961 budget saw increases in social welfare payments at the behest of Congress.

Lemass argued that social progress would follow from economic development…  With the move towards the liberalisation of trade and economic planning, Lemass was instrumental in creating consultative bodies involving the unions and employers…

Union membership, declining throughout the 1950s, increased after 1959 and would go on rising for the next 21 years.  After 1959, the number of committees on which the ICTU was represented expanded.  The Irish National Productivity Committee (INPC) was a joint consultative body charged with improving productivity.  The Committee on Industrial Organisation (CIO) was set up in 1961 to examine the ability of Irish industry to compete within the EEC.  The National Industrial and Economic Council (NIEC) was established in 1963 as a consultative body in economic planning.  These bodies, paralleling ‘the state’s commitment to economic planning as contained in the first two programmes for economic expansion’, permitted the unions to co-operate with the state on a range of problems posed by economic expansion.  Thus, the period between 1959 and 1965 was to witness a new pattern of Congress participation in state institutions, such that ‘[t]he institutional setting soon became largely tripartite, with the representatives of business, of labour and of government discussing the issues of employment, output, prices and trade’.

THE MOVE TO CENTRALISED BARGAINING (MID 1960 – LATE 1970s)

In the 1960s, the economy performed well, real Gross Domestic Product  (GDP) increased by 4.4 per cent per annum, economic openness grew by 23 per cent, while unemployment averaged 5.05 per cent.  Economists attribute this success to export-led growth based upon trade liberalisation and FDI.

The Institutionalisation of the ICTU/Government Relationship

Congress’s attitude to EEC entry was initially cautious, but by 1962 it was willing to support Lemass’s plans.  Congress, recognising free trade as inevitable, decided to embrace it from a position of influence with the government through membership of the CIO and NIEC… the limitations of relying on a web of collaborative bodies to oversee economic adjustment, while collective bargaining remained unregulated, became clear.

The government’s attitude towards collective bargaining was influenced by its increasing economic significance.  As more workers became unionised, bargaining exerted a major influence on macroeconomic policies.  Industrial development’s pride of place in national policy influenced the government’s stance towards centralised collective bargaining.

Lemass had urged a corporatist strategy towards industrial relations following the Second World War.  Corporatism (or as it is sometimes called neo-corporatism) is an inclusive bargaining approach involving the unions, employers and government.  However, the employers’ and unions’ preference for the status quo – free collective bargaining – prevented corporatism’s introduction. …

The pay-rounds of the 1960s prompted attempts to again centralise collective bargaining.  Growing trade union power, rising industrial conflict and wage pressures impelled governments to adopt a more interventionist stance.  The dangers of economic crisis from industrial unrest and an unprecedented pay-round increase in 1969 were the catalysts for the move towards corporatism.  This resulted in the unions’ influence over public policy increasing substantially. Throughout the following decade, pay determination became increasingly politicised and public policy was directed towards minimising strikes and restraining pay.

Economic Stagnation at the Beginning of the 1970s

Economic expansion and decentralised collective bargaining were viewed as incompatible in the NIEC’s Report on Incomes and Prices Policy.  To compound matters, economic growth slowed.  Statistics for output, employment, imports and sales all indicated a stagnating economy.  Industrial production and construction activities were affected by strikes, while investment was depressed by a six-month bank strike.  Inflation was running at 8.5 per cent, its highest level since 1952.  The OECD argued that the high level of inflation was partly due to the labour disputes.  The Central Bank warned that the penalty for high and prolonged inflation would be declining sales, followed by a fall in production and employment.  The improvements in living standards in the 1960s were in danger of being lost to inflation.  At this time, economic openness declined, while the total number of days lost through economic disputes peaked at over one million.

The Government’s Deepening Relations with the Unions

‘The chief lesson emerging from the operation of collective bargaining in the 1960s was that decentralised wage rounds were by their nature unstable and prone to inflation’.  The government’s economic policy, traditionally geared to long-term growth and industrialisation targets, from 1969, became increasingly concerned with inflation.  Demand and output were depressed by the government’s anti-inflationary policy and the recession in the United Kingdom.  The combination of relatively slow growth, inflation and a large external deficit in 1970 presented a dilemma.  As prices became a primary concern, budgetary strategy was aimed at moderating government spending so as not to contribute to inflation.  In response, the government’s policies towards organised labour changed.

The NIEC viewed economic expansion and decentralised collective bargaining as incompatible.  The 1970 budget argued ‘the principle need at present is for a more orderly development of incomes if we are to bring the present inflationary situation under control’.  Another lesson from the 1960s was the need for a joint body to administer national pay agreements.  It was against this background of industrial strife and economic difficulties that the NIEC prepared its Report on Incomes and Prices Policy.  A consequence was the reconstitution of the ELC in May 1970 (which had become defunct during the early 1960s), a significant event in restructuring the adversarial approach to industrial relations.  The government became a participant in the ELC with the intention of influencing wages.  Then Minister for Finance, George Colley, stated that the economy could not afford wage increases unrelated to productivity increases.  Following the collapse of talks at the ELC in the autumn of 1970, the government threatened statutory controls on wages and salaries with a Prices and Incomes Bill.

… it should be noted that the ICTU refused to ratify the agreement until the government withdrew its Prices and Incomes Bill.  The 1970 agreement marked the beginning of a decade of engagement in centralised collective bargaining, a significant change in the politics of pay determination.  Between 1972 and 1978, six National Wage Agreements (NWA) were reached through bipartite negotiations between the ICTU and employers.  A further two agreements reached in 1979 and 1980, referred to as National Understandings (NU), were arrived at through tripartite negotiation with the involvement of the government.

By the mid-1970s, the new collective bargaining was marked by quid pro quo arrangements on taxation between the unions and the state and the integration of government budgetary policy into national pay determination.  The linkage between the national pay agreements and government budgetary policy was ‘the most profound change in the nature, functions and prerogatives of democratic government in the history of the state’.  With active state involvement in industrial relations came union involvement in policymaking.  The relationship between the ICTU, the FUE and the government had changed significantly.

Trade Union Representation and Government Policies

… following the 1970 agreement, the boundary between politics and industrial relations was dismantled by the state and unions.  ICTU representation on government committees, in the economic and social fields, expanded.  All centralised pay agreements were drafted and concluded by employer and trade union representatives in the reconstituted ELC and thereafter adopted as state policy. …

The 1970s saw union membership expand.  Throughout that decade the unions’ and employers’ federations became major actors in policy formulation. … there was a marked change in the level of ICTU policies incorporated into the government’s policies.  The Industrial Relations Act of 1971 largely followed the proposals of the ICTU, and the National Prices Commission was established by the then Minister for Industry and Commerce in line with Congress’s proposals. … By the end of the 1970s, formal tripartite agreements were concluded.  The government went from using budgetary policy to underwrite national pay deals, to placing a range of policy issues on the negotiation table.  The ICTU, through dialogue with the government, gained influence over the most important economic policy instruments in the state.

Industrial relations difficulties – attributed to the wage round system and free collective bargaining – along with inflation, the loss of competitiveness and industrial conflict, impelled the centralisation of collective bargaining.  With the conclusion of the NU in 1979, the government acknowledged a new role for pressure groups in an important sector of economic policy-making and incurred commitments to them; they, in turn, incurred reciprocal obligations involving the conduct of their members.  However, by 1978, the ICTU had grown strong due to the state’s willingness to grant it concessions.  This became clear in 1980…  This left the employers disgruntled and questioning their place in social partnership.

THE COLLAPSE OF CENTRALISED BARGAINING (EARLY 1980s)

By the close of the 1970s, centralised agreements had become policy agreements.  However, by the time the second NU expired in 1981, the unions and employers were disillusioned.  The sought after economic stability had not materialised. …

The Economy Crisis and Economic Policy

The centralised agreements, implemented as solutions to the economic and industrial relations problems of the 1960s, were increasingly relied upon to address the problems of the 1970s.  The late 1970s saw the economy recover from the downturn following the 1973 oil crisis.  Inflation and unemployment began to fall, while strong growth returned.  Real GDP increased by 5.3 per cent annually from 1976 to 1979.  However, the Fianna Fáil government of 1977 employed an expansionist fiscal policy when the economy was already growing unsustainably.  Strong pro-cyclical policies led to deterioration in fiscal balances, with the public sector borrowing requirement (PSBR) rising from 13 per cent of GNP in 1976 to 17 per cent by 1979.  The structural problems highlighted by the first oil crisis remained unresolved when the second crisis struck in 1979.

Adjustment to the European Monetary System (EMS), entered in 1979 after severing the link with Sterling to reduce inflation, proved problematic and inflation fell more slowly in Ireland than the UK.  The average rate of consumer price increase in 1980 was 18.25 per cent.  Although high levels of current expenditure produced a budgetary over-run in 1979, the government continued its expansionary policies due to the worsening international economic climate resulting from the second oil crisis, increasing unemployment and emigration.

Following rapid growth in the second half of the 1970s, demand fell in the early 1980s.‘The second oil shock, the protracted international recession and the failure to achieve the fiscal policy of retrenchment led to a worsening of [economic] imbalances’.  With a slowdown in growth, unemployment rose to historic levels.  The increase in fiscal deficit, intended to be temporary, became impossible to eliminate as the economy declined.  By 1981, the national debt reached £10.195bn.  The PSBR peaked at 20.1 per cent of GNP, while the current budget deficit stood at 7.3 per cent.  Government spending was so high that the total amount budgeted for 1981 had been used by June.

The Unions and the Ending of the National Agreements

Taoiseach Haughey, who came to power after winning a divisive party leadership contest within Fianna Fáil in December 1979, needed to prove his authority to a divided party with an election victory.  In this context, the government was reluctant to adopt measures that could prove unpopular.  In September 1980, as talks on a second NU entered their final stages, they collapsed, resulting in government intervention.  ‘The Taoiseach managed to press the FUE national executive into resuming negotiations by pledging guarantees on the content of the 1981 budget’.  The second NU was subsequently ratified, but the FUE resented the pressure brought upon it.

Centralised bargaining was not meeting the FUE’s objectives.  For employers,  particularly in indigenous companies in exposed sectors, the agreements imposing similar wage norms across the economy undermined competitiveness.  For the unions, the agreements were not transforming pay restraint into jobs at a sufficient level to meet the labour supply, nor were they reducing social inequality.  The state looked to the agreements to restrain pay increases, preserve competitiveness and deliver economic growth.  However, these objectives were compromised by extensive bargaining below national level.  The result was a second tier of pay determination developed in the 1970s.  Although the agreements had procedures for containing industrial conflict, this was historically high during the 1970s.

Irish governments have tended to appease interest groups through ad hoc policy concessions.  This worked against enduring agreements between the state and interest groups found in continental neo-corporatism.  Additionally, close ideological affinity between the unions and government, a feature of stable neo-corporatist arrangements, was absent in Ireland.  The social partners’ failure to share comparable views on the policies needed for tackling economic problems compounded difficulties.  Employers warned that spiralling wages fuelled inflation and contributed to rising unemployment.  The unions argued unemployment was a consequence of deficient demand.  Their solution was expansionary fiscal policy.  Employers resisted the demands for public sector job creation on grounds that it would have a crowding out effect. …

Political and Economic Instability

The general election of 1981 saw a minority Fine Gael and Labour coalition government come to power.  At a most inopportune time, Ireland was condemned to a period of unstable government.

Prior to the election, the Central Bank stated the ‘fundamental problem is that the community still does not realise that it must adjust its living standards and expectations downwards in the face of deteriorating terms of trade and the need to commit resources to servicing the increased external debt’.  The new coalition government was determined to bring order to the public finances.  According to the National Economic and Social Council (NESC), a spiralling current budget deficit, PSBR and national debt precipitated a new approach to economic management.  Regaining control of the public finances would entail constraining public service pay. …

Government ministers saw little merit in tripartite agreements.  When discussions on a new NU broke down, the government was unwilling to intervene to save the talks. … From late 1981 onwards, with worsening economic conditions, wage rounds became decentralised.  By 1982, all political parties were committed to curbing public spending, which was incompatible with the terms of the NUs.  Union influence on public policy was drastically reduced during the first half of the 1980s, as the ICTU was pushed out of the policy-making process.  The Fine Gael wing of the coalition decided social partners had no right to influence policy.

Political and economic instability peaked in 1981-1982.  With the national debt and budget deficit spiralling out of control, a coherent policy approach was essential.  However, the governments of 1981/1982 lasted such a short time that no clear policies emerged.  When the second Fine Gael-Labour coalition came to power in November 1982, the national debt was almost on par with GNP.  By then, all the parties agreed on the need to stabilise the debt/GNP ratio.

The state’s strategy for much of the 1980s was to exclude the unions from the policymaking process.  State policy changed from focusing on employment to balancing budgets, export growth and international competitiveness.  Persistent turbulence over public service pay, and government disinclination to return to tripartism, meant meetings between the government and the ICTU were formal, tense and unproductive.

The Changed Influence of the Unions

After expanding for two decades, union membership peaked at 545,200 in 1980 and then declined thereafter.  During the late 1970s, the unions’ polices had been finding their way into legislation.  However, by January 1982, the ICTU was at loggerheads with the Fine Gael-Labour coalition over their budget.  Determined to cut government expenditures, the subsequent Fianna Fáil government ignored ICTU proposals.  From mid-1982, in the face of an unsustainable national debt, all political parties committed themselves to curbing public expenditure as a precondition for economic recoveryThe Fine Gael-Labour coalition budget of February 1983 saw the tax burden on pay-as-you-earn (PAYE) workers increase and social welfare cut.  Thereafter, it was clear that on taxes, wages and welfare, the government and ICTU were in disagreement. …

The coalition government of November 1982 to February 1987 experienced considerable difficulties in righting the economy.  As McCarthy put it ‘an attempt to achieve fiscal correction and disinflation through increased taxation, rather than expenditure reduction, completed the economic picture’.  However, the stabilisation of the debt required sharp cuts in borrowing and, consequently, in current spending.  Control over current spending proved difficult to achieve with high unemployment and population growth.  Government spending on social services jumped from 28.9 per cent of GNP in 1980 to 35.6 per cent in 1985. … With investment and productivity capacity depressed by high taxes and interest rates, the economy entered a downward spiral.

THE REINSTITUTION OF CENTRALISED BARGAINING (LATE 1980s)

The 1980s saw a stagnating economy, deteriorating public finances and unprecedented unemployment.  By the mid-1980s, the level of unemployment was being offset by emigration.  Between 1981 and 1986, 75,000 people left the country, and, for the first time in a quarter of a century, 1986 saw the population decrease.  By 1987, the economy reached its lowest point ever.

The State of the Economy

By 1986, most economic indicators had reached historic lows, while national economic and political commentators, the media and domestic and international organisations, all regarded the economy as in crisis.  The policies introduced to shelter the economy from the oil shocks of the 1970s led to unsustainable macroeconomic imbalances.  Between 1982 and 1987, the national debt doubled to over 130 per cent of GNP.  The government borrowed to spend on welfare services that could be sustained only by more borrowing.  Economic commentators advocated debt repudiation.  Although inflation had fallen, the borrowing requirement stood at 13 per cent of GNP in 1986.  Unemployment reached 17.7 per cent in 1987, with 254,526 people out of work.  The numbers in work had fallen from 1,145,000 in 1979 to 1,095,100 by 1986, shrinking the tax base.

The Central Bank viewed the situation with pessimism, as it would not permit for improvements in welfare benefits to the needy.  The business community was extremely concerned and leading businessman and entrepreneur Tony O’Reilly warned of the dangers of International Monetary Fund (IMF) intervention in the economy.  If the IMF were to intervene in the operation of the Irish economy, it would signal to the international financial community the diminution of Irish economic sovereignty and be widely perceived as confirmation that the Irish government was incapable of righting the economy on its own.

The NESC Report: A Strategy for Development

In this context, the government became interested in building support among the economic and social interests for a national recovery strategy.  Through the involvement of the major economic interests, the NESC acted as a forum for discussing the crisis.  In the autumn of 1986, it produced a report A Strategy for Development, 1986-1990, in which it noted that ‘[t]he argument against a continuation of present policies is based on the consideration that discretion over economic and social policy would ultimately be removed from [Irish] control’.

The NESC report emphasised a plan, requiring an integrated medium term strategy that would command acceptance throughout society to tackle the crisis in public expenditure.  The report was conceived as a means of supporting the coalition government’s recovery plans.  While still in opposition, Fianna Fáil proposed building on the NESC’s report and its 1987 manifesto, The Programme for National Recovery, absorbed much of A Strategy for Development.

The 1987 General Election

By 1986, Fianna Fáil, in opposition, was aware that the unions were disillusioned with the government, especially the Labour Party.  In the absence of political links, the union movement faced the prospect of continued marginalisation from policy debates.  Spotting an opportunity, Fianna Fáil sought to woo the unions through its willingness to involve them in policy discussions if elected to government.  It did not regard the arms length dealings with the unions, employed by the coalition government, as ideal for imposing fiscal discipline upon the troubled economy.  Haughey also denounced the Thatcherite policies of the Fine Gael-Labour government, supporting the calls of union leaders for a return to social partnership.

Labour Party ministers struggled in cabinet to maintain social benefits, imposing considerable strains on the coalition.  Yet, the Labour ministers’ stance had not made their relationship with the unions easier.  The coalition government collapsed in 1987, when Labour resigned in disagreement over budget cuts.

The election of 1987 saw all party leaders proposing fiscal rectitude.  Haughey, leader of Fianna Fáil, stressed that the election was about economic recovery.  The Fine Gael election manifesto, Breaking out of the Vicious Circle, proposed reduced public spending and borrowing.  Fianna Fáil campaigned on a platform of opposition to cuts in social spending and advocated a return to centralised pay agreements.

The election saw a shift of urban working-class support towards Fianna Fáil, in protest at the harshness of the measures proposed by the coalition. The new Fianna Fáil minority administration was considered likely to want to avoid the risks of implementing severe spending cuts.  However, after Haughey visited the Department of Finance for a briefing on the national finances, Fianna Fáil recanted on its manifesto promises, making clear it proposed little modification to the outgoing government’s plans.  The budget introduced in March 1987 sought greater fiscal adjustment than was achieved in preceding years.  This was a marked shift in policy emphasis and a determination to reduce the deficit.  Expenditure was reduced by £250m, while tax revenue increased by £117m.

The Unions and the Programme for National Recovery

The new government’s actions appeared unpromising from the ICTU’s perspective.  However, Fianna Fáil wanted to avoid confrontation with the unions, especially in the public service.  Within a few months of assuming office the government promoted talks on a national pay agreement – The Programme for National Recovery (PNR) – in accordance with the principles in the NESC report.  The administration was interested in securing a three year tripartite agreement throughout the economy.  ‘The Taoiseach invited the unions, along with the other social partners, to take part in an effort to spur recovery by means of consensus’.  To facilitate agreement, the government was willing to modify its stance on public service pay and discuss tax concessions, job creation and welfare.

By supporting a centralised pay agreement for industrial peace and union commitment to spending cuts, Fianna Fáil revealed a preference for defusing, rather than inflaming, industrial conflict and for seeking union support, rather than excluding them from policy deliberations.  By 1987, the unions favoured a return to centralised pay determination.  The prospects of agreement on a moderate pay rise, combined with tight control over second-tier bargaining, also drew in the employers.

The union movement entered negotiations in a weaker position than in the 1970s.  Although the unions had not been consulted on policy by the coalition government, they still possessed leverage in the Dáil with the Labour Party and Fianna Fáil.  However, with Fine Gael now in opposition and operating under its Tallaght Strategy of not opposing the government’s measures to revive the economy, many of which had ironically been proposed by Fine Gael in the run up to the election, the unions had few options besides doing a deal.

Talks built on the NESC report.  The ICTU executive argued that the PNR would prevent Ireland going down the Thatcherite road, where the UK Trades Union Congress (TUC) had been utterly marginalised.  Thus, the PNR restored social partnership, as well as brining considerable benefits for capitalism.  The PNR resembled the NUs in scope, but not content.  The central issue was an agreement on wages in the public and private sectors for three years.  However, the PNR, and its successor agreements, also encompassed a wide range of economic/social policy commitments on job creation and welfare benefits.  Unlike the 1970s, these agreements were based on shared understanding of the problems facing the economy and the policies required to address them.

The Unions and Policy Developments

Following the recommendations of the NESC, the government’s objective was to reduce the debt/GNP ratio to a sustainable level.  The change in government economic policy, first encapsulated in its March 1987 budget, as a determination to reduce the deficit, was elaborated in the PNR.  In contrast with earlier attempts, the targets for 1987 were achieved.  Subsequent budgets were designed in harmony with the PNR and the agreements thereafter and they provided for implementation of policies over which the unions had direct input.

Three joint government-ICTU working parties on Employment and Development Measures, Taxation and Social Policy were established and chaired by the Secretary of the Department of the Taoiseach.  More committees were formed following subsequent national agreements.  A Ministerial-ICTU group also met monthly to review progress.  The unions had secured input into policy-making through their position as an essential constituency with rights of representation on state boards, committees and policy fora

From 1987 onwards, Congress policies on pay, tax and social welfare found their way into government policy.  Ireland had embarked on a tripartite approach to income policy, marking ‘a fundamental change in [the] approach to social partnership between that practised up to the early 1980s and that practiced from 1987 onwards’.  The agreements of the 1980s and 1990s were not confined to wages, but encompassed a range of socioeconomic policies.  The focus of these agreements was economic stability, greater equity in the tax system and enhanced social justice, with the result that, ‘in the decade after 1987, interest group activity in Ireland attained centre stage, with the tripartite agreements of the 1990s cementing social partnership’.  Ireland’s political economy shifted from a British, towards a European, mode of consensus between social partners. ‘These arrangements re-established a reciprocal relationship between Congress, the government, and employers on a much stronger institutional footing than heretofore’.

Social partnership arrangement continued to function up until the collapse of talks on a new national agreement in 2008, as a new economic crisis took hold.  It remains to be seen whether Ireland will witness a return to the decentralised collective bargaining of the early 1980s, or if the social partnership arrangements can be revived.  In this respect, the current situation in some ways mirrors conditions in 1981.  The decision on this issue will have huge implications for the role of trade unions in Irish society, and for the performance of the economy, over the coming decade.

CONCLUSION

This chapter examined the four periods in which the trade union movement’s influence over Irish public policy changed dramatically during the latter half of the 20th century.  In each of these cases, extant economic circumstances had a significant role to play.  Thus, the unions’ changing influence was examined in the context of the broader Irish political economy.

The 1950s was a depressing decade.  However, after Lemass came to power in 1959, the Fianna Fáil administration sought to open the economy to competition and FDI.  Lemass regarded trade union involvement as critical in this attempt to revive the economy.  As a result, ICTU access to the Taoiseach, representation on government committees, government economic policies and policies towards organised labour, changed in the unions’ favour.

Fear that industrial unrest might frighten off FDI led to centralised collective bargaining between the state, unions and employers throughout the 1970s.  The NWAs and later NUs, provided the ICTU with unprecedented access to government, its policies, and their formulation.  These centralised collective bargaining arrangements were linked to government budgets.  Thus, the state came to play a role in industrial relations, in return for which the unions gained influence over economic policy.  By the end of the 1970s, wage agreements were being concluded in a tripartite context.

The early 1980s were a time of economic turmoil and political instability.  The national agreements of the 1970s, a solution to the industrial relations problems of the late 1960s, were no longer addressing the needs of the economy.  The employers’ had become disillusioned with the agreements’ failure to control wage inflation, while the unions felt pay restraint was not resulting in job creation.  In 1981, the government abandoned centralised bargaining, as it sought to bring public spending under control.  As a consequence, the ICTU was excluded from directly influencing policy.

By 1987, with the country on the verge of bankruptcy and unemployment at almost 20 per cent, the political establishment recognised the need for a new consensual approach to the economy.  A new Fianna Fáil administration, building on an NESC report and determined to impose fiscal discipline, sought to involve the unions in policy consultation to avoid the dangers of open confrontation.  For the weakened ICTU, fearful of permanent marginalisation, the prospect of reinstituted centralised bargaining was a welcome lifeline.  The unions saw this as an opportunity to regain influence over taxation, unemployment and social welfare policy.  From 1987 onwards, a tripartite approach to managing the economy developed, wherein the social partnership agreements encompassed a range of economic and social issues.  The ICTU, through involvement on numerous committees and working parties, secured an input into state policies that endured up to 2008.

However, with the collapse of social partnership in 2008, a large question mark hangs over the whole process.  If the impact of current recession was sufficient to collapse the social partnership process, this raises questions as to the underlying strength of the agreements.  Did Irish social partnership hold together from 1987 onwards because of an underlying societal commitment to what the agreements represented?  Or, did partnership exist primarily due to a very favourable set of economic circumstance that, once ended, made it an unsustainable proposition?  The answer to these questions will determine the future of Irish social partnership, and that of the wider economy and society, over the next decade.


Ireland Vol.4 (IRELAND’S ECONOMIC TRANSFORMATION: Industrial Policy, European Integration and Social Partnership)

Here is a paper, IRELAND’S ECONOMIC TRANSFORMATION: Industrial Policy, European Integration and Social Partnership (PDF) | Rory O’Donnell, Jean Monnet Associate Professor of European Business Studies at University College Dublin (University of Pittsburgh, CENTER FOR WEST EUROPEAN STUDIES, EUROPEAN UNION CENTER, Working Paper No.2, December 1998). Excerpts, underlines, italicization, et al. are on our own.

p3   Introduction

It is an interesting case of macroeconomic stabilisation and adjustment in a small and extremely open economy. It is a fascinating study in industrial strategy and modernisation, a transformation from a weak peripheral economy to a significant centre of high-technology manufacturing and advanced services. It is a story of European integration, and the threats and opportunities if offers to small member states. Finally, it is a remarkable story of social concertation, interest mediation and institutional innovation. While the paper attempts to weave these four stories together, it focuses particularly on the last of them. Since 1987, Ireland has conducted economic and social policy by means of social partnership between the state and economic and social interests. …

Section 2 [Background: Ireland’s Development Strategy: p4-5] outlines the background to the developments of the past decade, particularly the strengths and weaknesses of the outward-looking strategy adopted in the late 1950s. Section 3 [Domestic Crisis and European Integration: p5-9] describes the deep economic, social and political crisis of the 1980s, tracing it to both domestic pressures and the effect of European integration, and reports a variety of recent interpretations of Ireland’s economic ‘failure’. Section 4 [New Perspectives and Approaches: p9-12] outlines the new perspective on internationalisation and the social partnership approach developed in the late 1980s and pursued through the 1990s. Economic performance in the decade of social partnership is summarised in Section 5 [Economic Performance Under Social Partnership: p12-13]. Section 6 [Analytical Underpinnings and the Neo-Liberal Critique: p14-17] outlines the analytical underpinnings of the social partnership strategy and the objections to it advanced by some of the country’s more orthodox economists. Section 7 [Interpreting Irish Social Partnership: p17-22] discusses interpretation of Irish social partnership, suggesting that it is not adequately captured by the concept of neo-corporatism. Some conclusions are outlined in Section 8 [Conclusion: p22-23].

p4   Transnational Corporations (TNCs)… Indeed, during the 1970s, the weakness of linkages between foreign-owned enterprises and the indigenous economy became a major subject of research and policy concern4.

p5  CAP and Structural Funds

p6

European Exchange Rate Mechanism (ERM)… The period 1980 to 1987 was one of prolonged recession, falling living standards, a dramatic increase in unemployment and, once again, the prospect of emigration as the best option for the young. Total employment declined by almost 6 percent and employment in manufacturing by 25 percent. The length and depth of this depression reflected Ireland’s sharp balance of payments and public finance adjustment and adherence to the ERM. In addition, this weak real performance coincided with increasing public sector deficits and debt; controls on capital spending were more than offset by high interest payments and weak revenues. By 1987, the debt/GNP ratio was approaching 130 percent and real fears of national insolvency emerged. Fifteen years after joining the EC, Ireland’s ability to manage in an increasingly global environment had been tested and found wanting.

Single European Act (SEA)… naturally prompted Irish reflection on its performance in the EC and prospects in the deepening European internal market. It was clear that Ireland’s adjustment to European market integration had yielded striking changes in both the level and composition of trade. There was a remarkable increase in the openness of the economy: exports increased from 38 percent of GDP in 1973 to 67 percent in 1989, while imports increased from 45 percent of GDP in 1973 to 56 percent in 1989. The share of Irish exports going to the UK fell from 61 percent in 1972 to 35 percent in 1988, while the share going to EC countries other than the UK rose from 17 percent to 39 percent over the same period.

The commodity composition of Irish exports showed equally dramatic changes. Although food, drink and tobacco accounted for over 45 percent of the value of exports in 1972, these were soon overtaken by the value of manufactured exports, and now stand at around 24 percent. The exports of the chemical and engineering industries grew from 15 percent of total exports in 1972, to over 46 percent (67 percent of manufactured exports) in 1992. This reflects the profound changes in the structure of the Irish economy which have occurred since Ireland switched to an outward looking economic strategy, and especially since membership of the EC.

NESC identified four possible effects of the removal of tariff and non-tariff barriers:  Inter-industry adjustment and trade; Cold shower effect of improved technical efficiency; Intra-industry and trade; Increased firm size and restructuring.

p7

Detailed analysis of output, employment and trade developments in the industrial sector since 1973 identified which of the possible effects, outlined above, materialized in the Irish case…: Cold shower effect; Some intra-industry adjustment; Large inter-industry adjustment; Reduction in firm size.

Given that the Irish economic structure in 1973 was one that had developed behind high protective tariffs, it is likely that severe inefficiencies existed. Economic performance during the gradual reduction of protection suggests that efficiency was improved in a typical cold shower effect. There is clear evidence of an intra-industry adjustment in Ireland following the reduction of tariffs, as firms reacted to free trade by specializing in particular segments of their industry. However, the most significant feature of Ireland’s adjustment to European market integration was a substantial inter-industry adjustment. The nature of this adjustment is best illustrated by identifying three groups of industries, each of which had a different pattern of response: 1. Foreign-owned, grant-aided, export-orientated industries; 2. Industries in which the domestic market is naturally protected; 3. Internationally traded, relatively large-scale, industries.

The first group—chemical, pharmaceutical and electronic machinery—experienced continuous expansion, and rapid export growth, throughout the period of EC/EU membership. Because of their reliance on the domestic market, the industries in the second group (which include paper and printing, drink and tobacco, some food industries and small-scale metal and woodworking firms), fared well in the 1970’s—when domestic demand was buoyant—but suffered severe contraction in the 1980’s, when the Irish economy languished in prolonged recession. …

The third group is comprised of textiles, clothing, footwear, leather, or parts of the chemical industry, motor vehicles and parts, electrical engineering, shipbuilding, bread, biscuits, flour and confectionery and other food industries. Many of Ireland’s relatively large manufacturing firms were in these sectors. After the removal of tariff protection, import penetration was rapid and, in this highly competitive international environment, these industries suffered secular decline in which the larger Irish producers were eliminated. While some difficulties were experienced in the 1970s, the dramatic collapse occurred in the 1980s. …

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The fourth possible effect of market integration listed earlier, industrial concentration, was not observed in industry in Ireland. There was, in fact, a fragmentation of indigenous manufacturing industry. The opening of trade induced a sharp reduction in average manufacturing firm size, thereby reversing a slow process of industry concentration that had operated since the 1930s. This seemed to further reduce the possibility of building a large-scale indigenous industrial sector.

This radical adjustment in the structure of the Irish economy was interpreted as the response of firms to European integration. The removal of inefficient practices (the cold shower effect) and an element of product specialisation (intra-industry specialisation) offered some breathing space to indigenous manufacturers. But it did not, as in other countries, complete the process of adjustment. Because Irish firms’ basic scale was too small relative to their new competitors, and because they suffered a range of other competitive disadvantages, that breathing space was only temporary. Competitive pressure for further adjustment built up, forcing contractions of output and employment. In industries where economies of scale exist, contraction of employment and output tends to raise costs rather than lower them. Consequently, such ‘adjustments’, rather than re-establishing Irish competitiveness on a new basis, were the start of the process of long-run decline, inherent in specialisation between industries. The experience of Irish manufacturing between 1973 and 1987 can be seen to be consistent with a modern and realistic understanding of how trade and integration work where there are initial differences in levels of development, technology and scale of production.

The appalling experience of the 1980s, and its analysis as a failure to handle economic integration, had a significant influence on the approach of policy-makers and social partners to the dramatic deepening of European integration initiated by President Delors in the mid-1980s. However, as shown in Section 4, it did not prompt a retreat from European integration or internationalization.

The severity of this experience in the 1980s altered perceptions of the Irish economy. Expectations of medium and long-term prosperity became extremely weak, which encouraged rent-seeking and profit-taking behavior. This was evident in the extent of capital flight in the 1980s and the tendency for various government incentives to produce rent-seeking financial manipulation rather than increased business initiative. The emergence of the so-called ‘black hole’ in the balance of payments and national accounts, and the coincidence of rapidly growing exports with falling living standards and employment, produced fears that the modern Irish economy was fundamentally fictitious. The failure, once again, of indigenous development gave rise to a number of major studies of Ireland’s ‘economic failure.

Crotty argued that Ireland should be compared with third world countries, in which the social and

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political structures established under colonialism are used by the state in ways which favor entrenched elites. O’Hearn traced Ireland’s long-run failure to its outward-looking free market strategy, which made Ireland a ‘classic case of “dependent” relations: slow growth and inequality caused by foreign penetration’. Although supportive of inward investment, O’Malley argued that Ireland, as a late-developing country, faced, and still faces, significant barriers to entry created by the scale, market power or technological lead of established firms in larger, more developed, economies.

In an important historical account, Lee traced Ireland’s twentieth century experience to the predominance of a ‘possessor ethic’, as opposed to a ‘performer ethic’, in the country’s institutions, intellect, character and identity. Political structures—the nature of party politics and the failure of politics to represent and mediate conflicting interests—were emphasized by Girvin. Others analyzed the relationship between national political mobilization and the development of Irish Catholicism, and suggested that those factors could have an influence on economic life. Kennedy et al identified a set of proximate causes of Ireland’s failure at the level of policy and administration: failure to grasp the implications of the small size of the economy, absence of a long-term perspective, and neglect of the human resource dimension. Finally, Mjoset’s work for NESC synthesized these studies, suggesting a dynamic interaction of economic and social structures, global political factors, and cultural and attitudinal patterns. In his view, Ireland’s ‘basic vicious circle starts from two facts: the weak national system of innovation and population decline via emigration.  The mechanism whereby these two features reinforce each other must be sought in social structure. These mechanisms are highlighted by studying contrasts which emerge from the comparison with the other…countries’.

In retrospect, many of these perceptions of the Irish economy seem colored by the extreme difficulties of the 1980s. Some of them reflect the fact that—because of its openness and high share of inward investment—Ireland was, perhaps, the first country in which conventional national accounting categories became insufficient. Others reflect the fact that dead-weight, displacement and rent-seeking are particularly prevalent in a stagnant economy with weak expectations. What is remarkable is that within ten years of emergence of the so-called Celtic Tiger, large-scale studies by some of the country’s senior social scientists shared the premise that independent Ireland was an economic ‘failure’.

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…Far from accepting the analysis of Crotty or O’Hearn, there emerged a view that internationalisation, and European governance, while they had exposed critical weaknesses in Ireland, were no longer the cause of those weaknesses. Indeed, even deeper European integration and internationalisation, when properly understood and managed, came to be seen as a route to success.

While Ireland’s membership of the EC allowed the country to achieve one of its agricultural policy aims—access to a large, high-priced market—attention turned to problems in agriculture which remained despite, or because of, the CAP. The disappointing development of the food industry, and other problems in agriculture, reflected a range of industrial, agricultural and structural constraints which had not been successfully removed by domestic policy. The loss of so many indigenous businesses was traced to failure of industrial policy and the uneven growth of domestic demand. The focus and delivery of industrial policy was quietly changed—shifting from grants to equity, to an emphasis on indigenous development, to providing business services rather than start-up capital, to strengthening linkages from the TNCs—without any overt shift in industrial strategy. The argument for a greater focus on building indigenous firms and sectors—including clusters of related and supporting industries—received a measure of official support.

… A feature of the NESC approach was its insistence on placing the issue of EMU within a wider set of questions concerning Ireland’s strategic approach to European integration (including political integration) and a new perspective on the regional effects of the overall integration process….

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… Economic actors came to recognize what Irish officials had long understood: that small states generally benefit from the formal, legal, supranational elements of integration, whereas larger and more powerful states can work intergovernmental negotiations to much greater effect. From intense study and deliberation, there emerged a recognition that the ‘1992’ program must be seen in the context of other changes in the general economic environment affecting business, many of which are independently encouraging internationalization. The Irish Congress of Trade Unions (ICTU), which had opposed the SEA in the referendum of 1987, was, by 1989, promoting integration in a campaign entitled ‘Make Europe Work for Us’.

…NESC’s Strategy for Development (1986) formed the basis upon which a new government and the social partners quickly negotiated the Program for National Recovery to run from 1987 to 1990…

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The three subsequent agreementsthe Programme for Economic and Social Progress (PESP) 1990-1993, the Programme for Competitiveness and Work (PCW) 1994-1996, and Partnership 2000, 1997-2000—had a broadly similar form. Each has covered a three-year period, and has set out agreed pay increases for the public and private sector. They also contained agreements on a variety of policy areas, including commitments to social equality and tax reform. While the macroeconomic strategy has been adhered to consistently since 1987, subsequent agreements contained policy initiatives that are worthy of note. The PESP initiated an experiment in which local partnerships seek innovative approaches to long-term unemployment. A recent OECD evaluation of Ireland’s local economic development policies considered that the local partnership approach constituted an experiment in economic regeneration and participative democracy which is, potentially, of international significance. Commercialization, and limited privatization, of Ireland’s state-owned enterprises has proceeded in the decade of partnership. The most recent program, Partnership 2000, contains a measure of agreement on action to modernize the public service, enlisting the social partners in support of the Strategic Management Initiative. Partnership 2000 marks some progress in addressing the issue of enterprise-level partnership. In addition, a partnership approach has been adopted in several policy areas, and was reflected in a range of Task Forces and Forums examining issues concerning education, poverty, the travel community, and people with disabilities. An important feature of the recent Irish approach is the attempt to widen partnership beyond the traditional social partners (trade unions, business and agricultural interests). A new forum was established and the membership of NESC was gradually widened, to include representatives of the voluntary and community sector. Reflecting this, Partnership 2000 was negotiated in a new way, involving representatives of the unemployed, women’s groups and others addressing social exclusion.

…In the decade 1986 to 1996, real Irish GDP has grown by an average of 4.9 percent a year, compared to an OECD average of 2.4 percent. While total employment had fallen by an average of 1.1 percent per year between 1980 and 1986, since then it has grown by 1.8 percent per year, compared to an OECD average of 1.0 percent and an EU average of 0.3 percent. More recently, growth of output and employment has reached unprecedented levels. From 1993 to 1996, growth of real Irish national output has averaged 7.5 percent a year, and employment by a remarkable 4.0 percent per year. The rate of growth of employment in services during the 1990s has been higher than in any other EU country, and also higher than the US. Indeed, the outstanding feature of recent economic performance has been the strong growth of employment rather than earnings. Social partnership has also produced a transformation in Ireland’s public finances. The general government deficit as a percent of GDP

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declined from 8.5 percent in 1987, to 2.3 percent in 1994.  The debt/GDP ratio, which reached 117 percent in 1986, has fallen steadily, to 76 percent in 1996. Inflation has remained significantly below the EU average and, having reduced inflation in the 1980s, Ireland did not need a second bite of the cherry (and a second deep recession), as the UK did. However, the performance on unemployment has been less satisfactory. …

Social partnership would seem also to have aided Ireland’s successful participation in the ERM and transition to EMU. “After considerable initial difficulties, it was recognized that satisfactory participation in EMS and EMU requires not only conduct of monetary policy consistent with the exchange rate peg, nor the private sector’s acceptance of modest wage increases, but also consensus on the management of the public finances, including taxation”. Partnership provided the context in which Ireland maintained low inflation and reaped the benefits of lower interest rates and improving competitiveness.  After the loosening of the ERM in 1993, the social partners remained committed to a credible, non-accommodating, exchange-rate policy, leading to membership of EMU. While technical arguments suggest that this is the best exchange rate regime for a country such as Ireland (compared with a crawling peg or free float), the Irish case shows that technical mechanisms can only be effective where the political economy of inflation, incomes and public expenditure is resolved.

The growth of the past decade reflects continued growth of exports and, more recently, strong domestic demand. In the economic conditions created after 1987, Ireland attracted a high proportion of US investment in Europe, particularly in electronics, pharmaceuticals, software, financial services and teleservices. Between 1987 and 1996, the number of foreign firms grew from 670 to 1050, an increase of 57 percent in a decade. In 1996, foreign firms accounted for 47 percent of employment in manufacturing and internationally traded services. There is no doubt that the exports and employment of these firms constitute a significant part of Ireland’s economic transformation. However, there is evidence of greater strength in indigenous enterprises. Irish banking and insurance firms, many of which consolidated prior to the international competition introduced by the ‘1992’ programme, have grown strongly. In manufacturing, it has been estimated that the exports of Irish-owned firms have grown at annual rate of 11 percent in the period 1986 to 1995, slightly ahead of the EU (10.2 percent) and the OECD (10.5 percent). Between 1987 and 1996, Irish-owned firms accounted for 28 percent of the increase in employment and in the period 1993-96 they accounted for 41 percent of the net growth in manufacturing employment. In recent years, a significant number of Irish enterprises—in food and financial services—have undertaken mergers, acquisitions and alliances abroad. Irish enterprises have become attractive acquisitions for foreign investors. Such acquisitions, and the launch of emerging Irish enterprises on the New York or London stock exchanges, have become a routine feature of business life. There is evidence that the new methods of decentralized and flexible organization are being adopted by both TNC and indigenous firms in Ireland.

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In its second Strategy document, 1990, NESC set out a framework which has informed its subsequent work, and which underlies the commitment of government and the social partners to the process. It argued that there are three requirements for a consistent policy framework in a small, open, European democracy:

  1. The economy must have a macroeconomic policy approach that guarantees low inflation and steady growth of aggregate demand.
  2. There must be an evolution of incomes that ensures continued improvement in competitiveness, and which handles distributional conflict in a way that does not disrupt the functioning of the economy.
  3. There must be a set of complementary policies which facilitate and promote structural change, in order to maintain and improve competitiveness in an ever changing external environment.

It was argued that, in the Irish case, the first of these requirements is best met by adherence to the ERM, a non-accommodating exchange rate and, as soon as possible, transition to membership of EMU.

The second requirement is best met by a negotiated determination of incomes. To be really effective, such a negotiated approach must encompass not only the evolution of pay, but also taxation, the public finances, exchange rate and monetary policy, the main areas of public provision and social welfare.

In pursuit of the third requirement, the Council advocated a major programme of structural reform in taxation, social welfare, housing, industrial policy, manpower policy and the management of public enterprises. It argued that such reforms can only succeed with the active consent and participation of those who work in the agencies and institutions concerned. This participation is more likely in the positive industrial relations atmosphere which can be created by national policy which, on the one hand, minimizes the scope for conflict over pay and, on the other, lays down rights and duties which foster and encourage security and flexibility.

The conduct of policy along these lines since 1987 allows us to identify some of the core elements of the emerging Irish model of economic and social governance. The first element is an overall orientation, which begins with the belief that the widest participation in social life, economic activity and policy-making are inseparable and fundamental requirements for the well-being of Irish society. This is combined with an unambiguous recognition and acceptance of Ireland’s participation in the international economy and the European Union. This implies that the competitiveness of the Irish economy is a precondition for the pursuit of all other economic and social goals. The third element of the emerging Irish model is the fact that the achievement of a consistent approach to macroeconomic policy, incomes and structural adjustment has been strongly associated with

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negotiated programs. …

The international orientation of Irish social partnership was further underlined in the study which underpins the current program, Partnership 2000.  While globalization has undoubtedly undermined many elements of national economic policy, even in large countries, there remain several areas where national policy remains crucial, and may even have become more significant. National policies which influence corporate governance, innovation, the labor market and industrial relations still have a significant effect on national prosperity. In addition, study of current economic conditions clarifies the policy approaches which can be effective in a small, open, European democracy like Ireland:

  1. Most of the policies which affect national prosperity are supply-side policies;
  2. Given rapid economic change, national policies must produce flexibility;
  3. Successful national supply-side policies, directed towards innovation and competitiveness, depend on ‘the high level social cohesion and co-operation that the state can both call upon and development’.

NESC argued that this view on globalization has implications for the three elements of a consistent policy framework, outlined above. It underlines the importance of consensus, both the social partners and the political parties, on macroeconomic and monetary policy. It suggests that, once such a consensus is in place—and is reflected in government policy, wage bargaining and management—there is little value in active discussion of macroeconomic matters, or in agonizing over the transition to, or terms of, European monetary union. The main focus of policy analysis and development should be on the supply-side measures that influence competitive advantage and social inclusion, and the institutional arrangements which encourage discovery and implementation of such measures.

In assessing the merits and potential of the social partnership experiment, note should be made of the political context. It might once have been believed that the social partnership model was dependent on the dominant position of the center-left, catch-all, political party, Fianna Fail. However, since 1987, the party composition of Irish government has gone through rapid change, such that all political parties of any significance have been in government in various coalitions. The social partnership approach has not only survived this, but has gained the support of the Labour Party and the second largest party, Fine Gael. Indeed, the evolution of social partnership has seen a co-evolution in Irish party politics—towards a system of permanent, but frequently re-negotiated, coalition. This brings Ireland nearer to a European system of governance, which does not have the ‘winner takes all’ and ‘oppositional’ characteristics of the British system.

While the evolution of Irish economic policy in the past decade has been marked by a high level of consensus—between the social partners and across the political spectrum—the more liberal and orthodox economists have stood outside the consensus. Some have objected to the politicisation of industrial relations because it ‘adds to the bargaining power of trade unionism on an ongoing basis’.

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Others have argued that the social partners are ‘insiders’, whose pay and conditions have been protected at the expense of ‘outsiders who would work for less’, and that social partnership has had the effect of ‘raising the level of unemployment and emigration’. An aspect of the strategy that has particularly provoked orthodox and neo-liberal economists is EMU. A preference for the British model of economic and social policy (of the 1980s) is combined with a preference for sterling rather than the euro. Having failed to shake the consensus on EMU, they argued that EMU requires abandonment of centralised wage bargaining. In its recent assessment of the achievements and limits of the social partnership approach, NESC argued that these criticisms require careful consideration. It suggests that a number of qualifications are warranted.

First, the proposition that centralised agreements have prevented the unemployed undercutting the wage of existing workers, and has thereby increased unemployment, is both conceptually and empirically questionable. As Solow has shown, one of the fundamental features of labour markets, observed almost everywhere, is the absence of wage under-cutting by unemployed workers. This reflects the fact that the ongoing relation between management and labor gives rise to complex patterns of co-operation in which ideas of fairness play an important role.  Wage rates and employment are entwined with social status, and the performance of the worker depends on the price paid for her services. Consequently, it seems inaccurate, on the part of the opponents of Irish social partnership, to attribute the absence of wage under-cutting to the centralised agreements of the past decade.

Second, the argument that social partnership arrangements maintain a high level of unemployment, ignores the fact that, without national agreements, income determination will remain a noncompetitive, highly collectivized, process, with tendencies to monopoly power on both sides of industry. Ireland is unlikely to move to the atomistic bargaining which would seem to underpin the analytical argument, and the political preference, for decentralized bargaining. It remains to be explained how, in a world of decentralized, sectional and non-political bargaining, agents acting in their own self-interest will take greater account of the problems of the unemployed.

The argument that EMU requires abandonment of centralized wage bargaining—or wage contracts linked to the Irish punt/sterling exchange rate—confronts certain problems of a factual, conceptual and practical nature. It is based on the misapprehension that the partnership agreements are entirely inflexible arrangements. It ignores the evidence, from Ireland and other European countries, that coordinated wage bargaining, as part of a wider consensus, plays a role in maintaining low inflation by means of a hard currency peg. Linking Irish wages to the sterling exchange rate would involve less co-ordination of Irish wage settlements, introduce unsynchronized behavior, establish a most unusual (and implausible) wage-contract, and could allow a return to the type of inflation-based bargaining which proved so destructive in past decades.

Indeed, the poorly specified analytical argument against the experiment, can be contrasted with the analysis advanced by the social partners themselves. This is an analysis which begins by noting the small scale and open nature of the Irish economy, the structure of industrial relations, high levels of taxation and social provision and the significant outstanding national debt. In this context, a negotiated consensus—with a non-accommodating exchange rate as the sheet-anchor of macroeconomic policy—must include agreement on the evolution of pay, taxation, the public

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finances, the exchange rate and monetary policy, and the level of publicly provided services and social welfare. Four arguments underlie this position.

First, the internationalization of financial markets renders active manipulation of the exchange rate impossible in a small and extremely open economy.

Second, this is underpinned by the new perspective on the regional effects of economic and monetary integration, noted above.

Third, the social partnership agreements underpin the credibility of a non-accommodating exchange rate policy, by enlisting support for it as a long-term policy and ensuring that the ‘fixed’ exchange rate gives the right signal. As Soskice notes, depending on the institutional arrangements, a fixed exchange rate can either encourage moderate wage growth (when unions and employers jointly favour a low real exchange rate), or high nominal wage growth (when unions seek higher real wages in the shor