UK Vol.91 (Post-EUref #Brexit Vol.20: 2017 General Election – Plaid Cymru, Democratic Unionist Party, Sinn Féin)

Here are policies of Plaid Cymru (The Party of Wales), Democratic Unionist Party (DUP) and Sinn Féin. Excerpts are on our own.

——- Plaid Cymru Action Plan 2017 (issuu or PDF)
DEFENDING WELSH INTERESTS P8
A STRONGER WALES P12
Wales must have an equal say when decisions are made which have major implications for devolved functions. All future free trade deals, for instance, must be endorsed by the National Assembly for Wales.
PROTECTING WELSH JOBS P16
Plaid Cymru will push for targeted tax discounts for new and existing businesses in Wales as a central part of the new UK Regional Policy. We will demand that Wales has the power to set its own rates of tax including Corporation Tax, Air Passenger Duty and VAT. As we leave the EU the new assisted areas map must be determined in Wales.
Plaid Cymru will fight to ensure that £4.3 billion in public sector contracts are spent in Wales and we will introduce a real, independently verified, Living Wage.
… We will ensure there is a properly funded Welsh Development Bank to invest in Welsh businesses. …
A HEALTHIER, HAPPIER WALES P20
CARING FOR THOSE IN NEED P24
GIVING EVERY CHILD A CHANCE P28
CONNECTING WALES P32
Plaid Cymru wants to see a real Wales-wide transport system, including re-opening the Carmarthen-Aberystwyth railway, improved Valleys line services, improvements to the A55 and the expansion of the Traws Cymru bus network. We will also ensure that walking and cycling is integrated with bus and rail services.
We will create a level-playing field with every other UK nation and give Wales the power to decide its own media and broadcasting policy. We will ensure that S4C receives the funding it needs.
We will introduce a Welsh Development Agency (WDA) for the 21st century, tasked with boosting Welsh trade.
PROTECTING OUR COMMUNITIES P36
We will secure an extra £25 million for Welsh police forces…
Create a Welsh legal jurisdiction that ensures we can create a justice system that reflects the needs of Wales.
PUTTING ENERGY INTO OUR ENVIRONMENT P40
…energy generation from renewables including delivering tidal lagoons in Swansea Bay, Cardiff and Colwyn Bay. We will establish a national electric vehicle charging network…
Plaid Cymru will roll out a nationwide scheme to make our housing stock more energy efficient. We will secure compensation for those who have suffered from badly installed, governmentbacked cavity wall insulation.
CHAMPIONING RURAL LIFE P44
Plaid Cymru will oppose the construction and use of pylons through National Parks and Areas of Outstanding Natural Beauty, advocating underground or undersea cabling where possible.
WALES ON THE GLOBAL STAGE P48
We are determined to scrap Trident, resisting any attempts to relocate it to Wales. We will instead invest in home-based troops and strengthen our conventional forces.
We will create a Welsh Migration Advisory Service so that we can have a system that suits Wales’s needs. Welsh-specific visas are necessary to plug skills gaps and to protect our health service from staff shortages. International students must be taken out of net migration targets.

——- DUP Our Policies
More jobs, rising incomes
Northern Ireland has seen the unemployment rate drop from 58,644 in 2011 to 39,320 in 2016.
This record of success was built on:
• supporting the promotion of over 40,000 new jobs – smashing the target of 25,000;
• £2.9 billion of investment – almost three times the target of £1bn;
• £585 million on research and development investment – almost double the target of £300m and
• 72% of new jobs supported under the Rebuilding Our Economy Programme have been above the Northern Ireland Public Sector Median salary.
• In areas like tourism, Government action, in partnership with the industry, has delivered real advances. For example, we took control of Air Passenger Duty on long haul flights leaving. …
… This is our Plan for more jobs and rising incomes.
1. 50,000 MORE JOBS
2. OUR COMMITMENT ON CORPORATION TAX
3. A BETTER BUSINESS RATES SYSTEM
4. UPSCALING SUPPORT PLAN
5. A NEW ENERGY STRATEGY FOR NORTHERN IRELAND
6. OUR FAIR SHARE OF THE APPRENTICESHIP LEVY
7. JOB FOCUSSED SKILLS
8. STRENGTHENING OUR MANUFACTURING BASE
9. INNOVATION UK AND NI
10. A £1 BILLION TOURISM SECTOR

A world class health service
• We have invested over half a billion pounds more in Health; …
• We have delivered over £800 million in efficiency savings to reinvest in the frontline;
• We have built new, state of the art health and social care facilities such as the new Critical Care Building at the Royal Victoria Hospital, new Health and Care Centres in Ballymena and Banbridge, the Radiotherapy Unit at Altnagelvin and large scale redevelopment of the Ulster Hospital …
1. A BILLION POUNDS MORE FOR HEALTH
2. MORE FRONTLINE STAFF
3. TRANSFORMING MENTAL HEALTH
4. A HEALTH SERVICE FIT FOR THE CHALLENGES OF THE 21ST CENTURY
5. GETTING TO GRIPS WITH WAITING LISTS
6. ENCOURAGING ACTIVE AND HEALTHY AGEING
7. SUPPORTING PRIMARY CARE
8. DELIVERING DIGITAL HEALTHCARE
9. PROMOTING PUBLIC HEALTH
10. INVESTING IN NEW HEALTH INFRASTRUCTURE
11. PERINATAL HOSPICE CARE FOR LIFE LIMITING CONDITIONS
12. BEATING CANCER
13. ASSISTING NURSING

Every child with the opportunity to succeed

Rewarding hard work
Over the past five years, the DUP has created opportunities for hard working people across Northern Ireland:
• by freezing the regional rate in real terms and deferring water charges, we have saved the average householder in Northern Ireland over £2,500 in the last 5 years compared to their counterparts in England;
• as Northern Ireland has the lowest household taxes in the whole of the United Kingdom. For 2015/16 the average household bill was £842 in Northern Ireland compared to £1337 in Scotland, £1,465 in England and £1,550 in Wales;
• as we have maintained free travel on public transport for over 60s;
• in providing the Lone Pensioners Allowance which has helped thousands of ratepayers aged 70 or over and living alone save a total of £5.2 million annually on their rates bills and
• in assisting almost 5,000 families to buy affordable homes by investing £168 million between 2011 and 2015. …
1. A NEW CHILDCARE STRATEGY
2. KEEP HOUSEHOLD TAXES IN NORTHERN IRELAND LOW 
3. PROTECT PENSIONER BENEFITS
4. HELP YOUNG PEOPLE ON TO THE PROPERTY LADDER
5. SUPPORTING CARERS

Rebuilding Northern Ireland
… Since 2011, over £5 billion has been invested in a range of new infrastructure projects that have improved Northern Ireland.
These include:
• new roads including the A8 Belfast to Larne dual carriageway, A2 Shore Road, Greenisland dual carriageway, A26 Frosses Road and the Magherafelt bypass;
• new schools such as Bangor Grammar, Strathearn Grammar, Magherafelt High School and Whitehouse Primary School in Newtownabbey;
• new colleges like Belfast Metropolitan College in the Titanic Quarter and the North West Regional College;
• new healthcare facilities such as the new South West Acute Hospital and Health and Care Centres in Banbridge and Ballymena …
This is our plan for rebuilding Northern Ireland
1. INVESTING IN NEW ROADS
2. IMPROVING PUBLIC TRANSPORT
3. A SINGLE DEPARTMENT FOR DELIVERING INFRASTRUCTURE PROJECTS
4. BETTER MANAGEMENT OF PUBLICLY OWNED LAND
5. ESTABLISH A £1 BILLION NORTHERN IRELAND INVESTMENT FUND
6. INVESTING IN WATER

Safer streets and smarter justice
The DUP tabled the motion in the Assembly which led to the full introduction of the National Crime Agency (NCA) to Northern Ireland. In the Fresh Start Agreement the DUP secured:
• £160m new resources for the PSNI to go after paramilitaries;
• a £50m cross border task force of the NCA, PSNI and Tax authorities to ensure no safe havens; …
… We have attempted to overcome the past failure of the UUP to get a proper definition of victim and to achieve a pension for severely disabled victims.
1. LET VICTIMS DECIDE
2. FULL IMPLEMENTATION OF THE FRESH STARTANTI-PARAMILITARY MEASURES
3. PROBLEM SOLVING COURTS
4. OPEN POLICING AND JUSTICE
5. ONLINE CIVIL JUSTICE
6. LEGAL ACCESS FUND
7. A NI REGISTER OF ANIMAL CRUELTY OFFENDERS
8. FULL PROTECTION FOR ACCIDENT AND EMERGENCY STAFF
9. GREATER PROTECTION FOR THE ELDERLY AND VULNERABLE
10. PARADES AND PROTEST

A friend of the farmer and natural heritage

Creating stronger communities
• between 2011 and 2015, £400million was invested, alongside £315million of private finance, in providing social and affordable housing across Northern Ireland. Over 8,500 new social and affordable homes have been constructed over the period;
• by end of March 2016, £70m will be committed under the Social Investment Fund, for the first time benefiting churches, Orange Halls and many new areas not included under traditional DSD schemes; …
1. INCREASING INVESTMENT IN NEW SOCIAL & AFFORDABLE HOUSING
2. A TOWN CENTRE REGENERATION CHALLENGE FUND
3. REINTRODUCE A ‘LIVING OVER THE SHOPS’ SCHEME
4. COMMUNITY LAND TRUSTS FOR AFFORDABLE HOMES
5. RE-BIRTH OF THE NORTHERN IRELAND HOUSING EXECUTIVE (NIHE)
6. ENERGYWISE AND WARM HOMES
7. BULK BUYING FROM PRIVATE SECTOR LANDLORDS
8. HOMELESSNESS

Taking pride in Northern Ireland

Changing politics and government in Northern Ireland

——- Sinn Féin SINN FÉIN WESTMINSTER ELECTION MANIFESTO 2017 (PDF)
FOREWORD MICHELLE 3
DESIGNATED SPECIAL STATUS WITHIN THE EUROPEAN UNION 4
A TIME FOR UNITY 5
ENDING TORY CUTS 6
WORKING TO ESTABLISH THE EXECUTIVE 7
PROTECTING YOUR HEALTH SERVICE 8
INVESTING IN EDUCATION 9
SAFEGUARDING YOUR RIGHTS 10
SUPPORTING FARMING AND PROMOTING AGRI-FOODS 11
BUILDING BUSINESS GROWING TRADE 12
GERRY ADAMS MESSAGE 13

cf. Policies
Brexit (w Video)
On 23rd June 2016 the people of the North voted to remain in the EU. They did so because it is in their best interests politically and economically. Brexit poses a huge threat to the future of the people of Ireland in terms of a land border on the island, the north being forced out of the single market, barriers to trade, potential devastation of agriculture, not to mention the implications for the peace process and the Good Friday Agreement.
Sinn Féin has argued that the only credible approach is for the north to be designated special status within the EU and for the whole island of Ireland to remain within the EU together. …
Better For Health (w Video)
… For Sinn Féin the long-term solution is clear – we need an Irish National Health Service. …
Better For Housing
… Sinn Féin is promising that, if in government, we will deliver a housing blueprint for this island…
Decent Work And A Living Wage
Dealing With The Debt


Ireland Vol.25 (Munster Vol.3 – Tipperary, Waterford)

Tipperary

cf. @TipperaryCoCo    TIPPERARY – THE PLACE, THE TIME | @TipperaryTime    @Nenagh_ie    @MICLimerick St Patrick’s Campus Thurles    @clonmel_town    @LimerickIT in Tipperary    @tippfood

Waterford

cf. @WaterfordCounci    @waterfordcc    @waterfordit    @BizWaterford    @VisitWaterford    @WaterfordCityCt    @WaterfordWalls


Free papers, reports, et al. Vol.3

Here are @_WorldSolutions’ RTs from late January 2017 to late December 2016 which include free papers, reports, podcast, et al.


Easter 2017

Here are articles on Easter. Excerpts are on our own.

The Economics Of Easter (4/12/2017) | Rutger Bloemenkarr @The_MarketMogul   … According to @NRFnews’s annual Easter Spending Survey, which surveyed 7411 American customers about their Easter Sunday plans at the beginning of March, the total amount that is expected to be spent in the US is $18.4bn in 2017, which is approximately $152 dollar a person. This is considered to be the highest amount in 14 years, up by about 6% compared to 2016. …consumers are expected to spend $5.8bn on food, $3.3bn on clothes, $2.9bn on gifts, $2.6bn on candy, $1.2bn on flowers, $1.1bn on decorations, and $788mn on greeting cards. … The majority of Americans, about 58% to precise, visit discount stores to purchase their gift of preference, while the remainder visit department stores (46%), local stores (26%), or online stores (27%). … Almost two out of three Americans (61%) will visit their family and/or friends for Easter, 57% will cook a holiday-oriented meal, a majority visit church (52%), and a small portion go to a restaurant (17%). Additionally, more than one-third of the consumers surveyed (35%) are expected to have a so-called Easter egg hunt. Lastly, 16%…  According to @smallbiztrends…

Easter in Canada | @dgreetings   … – Eggs are forbidden during Lent but after fasting they are consumed mixed with maple syrup. Also special Easter passion plays and songs are performed at the major theatres and community halls of the major cities of Canada.    – A typical Canadian Easter is characterized by its mouthwatering and sumptuous recipes of ‘Maple Baked Beans’, ‘Potatoes Nicoise’, ‘Cape Breton Scones’ and apple tart. Thus, Easter in Canada is an event worth enjoying for its wide festive activities.

The Easter Egg Hunt, the Economy and the New Game (6/4/2015) | @LearntSchool @HuffPostUK   … @charliehoehn,@FreeRangeHumans,@ajjuliani …

Britain to benefit from 1.8 per cent boost to economy this Easter:  BRITAIN’S economy will grow by 1.8 per cent this year according to upgraded forecasts from the EY ITEM Club, thanks to a recovery in global trade. (9/4/2017) | Geoff Ho @Daily_Express    Easter: Quarter of UK Christians do not believe in the resurrection of Jesus Christ, survey reveals (11/4/2017)     Irish business owners urged to be vigilant this Easter (13/4/2017) | Robert McHugh @BusinessWorldIE

Canberra’s experts divided over economics of Easter holidays (10/4/2017) | @DavidTuckwell3 @The_RiotACT   … According to @CBRBusiness, the territory’s top business lobby, the effect can be negative as public holidays mean penalty rates, and penalty rates mean unemployment. “Generally speaking, penalty rates on public holidays make businesses think staying open on a public holiday is just not viable,”… “Some businesses – particularly small businesses – look at their cost of operation compared to potential income and think it’s not commercially viable to open.” … “The problem with this entire penalty rates debate is the ‘fallacy of composition’,” says @MattGrudnoff, an economist at @TheAusInstitute, a left-leaning think tank based in Civic. … According to Professor Phil Lewis, an economist at @UniCanberra, there are both moral and economic considerations to keep in mind. “If you have a public holiday, employers who pay the award will be obliged to pay $45 an hour for a person on the lowest wage. …some businesses will stay open, especially family-owned businesses, as family members won’t demand penalty rate…

Retailers baffled by Easter trading laws (11/4/2017) | Matthew Theunissen @nzherald   … A recent law change gave local councils the authority to permit Easter Sunday trading and 25 mostly smaller councils have so far taken up the option. … Five councils have continued with the the ban while all major centres are yet to reach decisions. Shops which open in the restricted areas risk a prosecution and $1000 fine. … There are exemptions to the Easter trading laws, and some of them are quite unusual. Dunedin’s Carnegie Centre has an exemption to sell arts, crafts, children’s toys and books on Easter Sunday. “Toys and books sold only while performances happening on the mezzanine floor,”… In Nelson, crafts can be sold “whenever Founders Park is open”. @nelsoncitynz has been approached for clarification on whether this means any shop can sell crafts while the park is open, or only shops within the park. A clearer definition of “crafts” was also sought from the council. … Other exemptions include dairies, service stations, takeaways, bars, restaurants and cafes, duty-free stores and shops providing services rather than selling goods, such as a hairdresser. … The industry had fought hard to get the exemption and Odering could not understand why it didn’t include Friday, too. … Since 1992, Odering said the his business had paid in excess of $20,000 in fines, Department of Labour Fees and court costs because they had refused to shut shop over Easter. @RetailNZ spokesman… @MBIEgovtnz data shows that prosecutions for shops illegally opening over Easter steadily declined from 63 in 2006, to 34 in 2008, 28 in 2010, 25 in 2012, 0 in 2014 and 3 in 2016. …

Easter to bring a million foreign tourists to Netherlands (4/13/2017) | Janene Pieters   About 950 thousand foreign tourists will spend Easter weekend in the Netherlands, according to calculations by @NBTC. “It is expected to be very busy”, a spokesperson said to @NOS. “In comparison with last year, we expect 100 thousand more tourists.” Most foreign visitors come from Germany, about 600 thousand. And over 200 thousand Belgians are expected to visit this weekend. …increasing since 2009… Last year 15.8 million foreigners visited our country. This can partly be attributed to the recovering economy in Europe and America. And due to the weak euro, it is relatively cheap for non-euro countries to visit the Netherlands on holiday. The threat of terrorist attacks in European cities such as Paris and Brussels also…

Norwegian Easter Traditions   … In old times, people would climb mountains on Easter Sunday morn to watch the sunrise as they thought the sun danced with joy for the resurrection of Christ.  It is suggested that this could have started the Norwegian habit of ‘going up the mounatins’ at Easter time.  This day was also a day to predict the weather for the Summer.  If it was a good day then the Summer would be good too.  If there was frost the night before the Sunday then the Summer would come late.  For some reason, the Bunad is not worn during Easter. Easter Sunday breakfast is a grand affair.  Anything and everything is put on the table, cured meats and especially eggs – boiled, scrambled, fried, (and even fish eggs!), you name it.  The boiled eggs are often dyed or painted before eating.  Traditionally the Winter stores are low from the long Winter, so there is not much cooking or baking, especially compared to Christmas time.  However, egg dishes are in abundance, especially when there has been a lot of egg decorating with lots of leftover whites and yolks.  Pancakes are also a popular treat at Easter. … The Easter egg hunt is a common tradition around the world and in Norway children look for a brightly decorated paper eggshell filled with small lollies.  The eggs used to be real chicken eggs…

Easter | @denmarkdotdk   …most Danes regard Easter as a holiday. A national survey in 2000 showed that 48% of the Danes attached particular importance to the family spending time together during Easter and 37% regarded it as a holiday; only 10% mentioned ‘attending Church’ and ‘the Christian message’ as the main feature of Easter. … Many homes and shops are decorated for Easter in green and yellow, especially with new-leaved branches and daffodils. The main symbol of Easter is still the egg. The eggs used for decoration may be ordinary hen’s eggs which have been blown out and coloured or they may be imitation eggs or various kinds of sugar and chocolate eggs. Other decorations include small artificial hens and chickens and gradually also the Easter hare, which formerly was almost exclusively common in the areas by the German border. There is a unique Danish Easter tradition, viz. the custom of sending teaser letters. In the weeks before Easter especially children cut out elaborate letters, on which they write a so-called teaser verse. The letter is anonymous, but signed with a number of dots corresponding to the number of letters in the sender’s name, so that the recipient has a chance of guessing who sent it. The pledge is a chocolate Easter egg redeemed at Easter. The letter is accompanied by a snowdrop, which is regarded as the first flower of the year. …

Easter in Sweden (4/12/2017) | @Sweden_Belgrade   …most people celebrate it at home with their families and relatives. … Nowadays, eggs are a favourite accompaniment to the dish of pickled herring that is the centrepiece of most Swedes’ Easter meals. And few associate the omnipresent birch twigs − nowadays decorated with brightly coloured feathers − with the suffering of Christ. Easter has its own rituals. Children dress up as Easter witches; clad in discarded clothes, gaily coloured headscarves and red-painted cheeks, they go from house to house in the neighbourhood and present the occupants with paintings and drawings in the hope of getting sweets in return. Having consumed all these sweets, they are then given Easter eggs filled with yet more. … A traditional Easter lunch is likely to consist of different varieties of pickled herring, cured salmon and Jansson’s Temptation (potato, onion and pickled anchovies baked in cream). … At dinner, people eat roast lamb with potato gratin and asparagus, or some other suitable side dish.


Good Friday (& Agreement)

Here are articles on #GoodFriday & the Good Friday Agreement (the Belfast Agreement).  Excerpts are on our own.

When is Easter weekend 2017? Key bank holiday dates and facts for Good Friday, Easter Sunday and Easter: Monday Why does the date for Easter Sunday change every year according to the lunar calendar? We’ve got all the answers to your questions (13/4/2017) | Ian Leonard & @jondeano @DailyMirror     Good Friday vs Easter: We Don’t Always Have to Win (5/4/2015) | @jontylangley @HuffPostUK

When is Good Friday in 2017 and is it a Bank Holiday? Easter celebrations and Christian festivals – here’s all you need to know: The important date in the Christian calendar is a national holiday (13/4/2017) | @LittleBitSoph @TheSun   … Good Friday is commemorated because the date marks the crucifixion of Jesus Christ and his death at Calvary. Accounts of the Gospel state that it was the day that the son of God was betrayed by Judas, before he was sentenced to death. The date falls during Holy Week on the Friday before Easter Sunday, and sometimes coincides with the Jewish celebration of Passover. Experts believe the event has been coined “Good Friday” because the word “good” means pious or holy. …

Who, What, Why: Why is Good Friday called Good Friday? (18/4/2014) | @BBCNewsMagazine   … according to Fiona MacPherson, senior editor at @OED, the adjective traditionally “designates a day on (or sometimes a season in) which religious observance is held”. The OED states that “good” in this context refers to “a day or season observed as holy by the church”… According to the Baltimore Catechism – the standard US Catholic school text from 1885 to the 1960s, Good Friday is good because Christ “showed His great love for man, and purchased for him every blessing”. … It also says that the day is known as “the Holy and Great Friday” in the Greek liturgy… Karfreitag (Sorrowful Friday) in German.

UK government committed to Good Friday agreement, says NI secretary: James Brokenshire said government supports re-establishing power-sharing devolved authority after assembly elections (17/1/2017) | @henrymcdonald @guardian     Northern Ireland’s system of government is broken. We must review the Good Friday Agreement (18/1/2017) | @lrobertsonmp @Telegraph

The Good Friday Agreement and today: The Good Friday Agreement is the cornerstone of our commitment to peace and stability on this island. It was agreed on 10 April 1998 and overwhelmingly approved in 2 referendums in both parts of Ireland in May 1998. | @dfatirl   Northern Ireland Assembly, North South Ministerial Council, British-Irish Council; St. Andrew’s Agreement (2006), Hillsborough Agreement (2010), Stormont House Agreement (2014), A Fresh Start – The Stormont Agreement and Implementation Plan (2015)

Good Friday is Ireland’s Brexit talks ace card (31/3/2017) | Jim Power @irishexaminer   … The optimal outcome would be a smooth process that would placate the UK and, thereby, set the scene for a decent trade deal once the UK has formally exited the system in two years. For Ireland, the potential challenges are obviously immense. We clearly have a special relationship with the UK from a political, economic and cultural perspective. Some 800 years of history cannot be eroded overnight, nor should it be. I have always been sceptical about the willingness of the EU to treat Ireland as a special case and do us special deals, but the Good Friday agreement is very definitely Ireland’s ace card. There is a strong realisation in Brussels of just how important that process has been in delivering peace and prosperity on the island of Ireland, and one assumes that the EU would not want to undermine that. This should be the central plank of Ireland’s approach to the EU meeting on April 29. …

Britain ‘will never be neutral’ on Northern Ireland, says Theresa May Jeremy Corbyn backs NI assembly’s right to hold border poll on a united Ireland (29/3/2017) | @reuters,@IrishTimes   … “We are of course, within that, fully committed to ensuring that the unique interests of Northern Ireland are protected and advanced as we establish our negotiating position, and our position has always been clear that we strongly support the Belfast Agreement, including the principle of consent that Northern Ireland’s constitutional position is a matter for the people of Northern Ireland to determine. “But as our manifesto made clear, we have a preference that Northern Ireland should remain part of the United Kingdom, and we will never be neutral in expressing our support for that. …

Good Friday Agreement: 10 April 1998 | @BBC   … A personal assurance from Tony Blair to UUP leader David Trimble smoothed these last ripples of discontent. … The Belfast Agreement (or Good Friday Agreement as it would become known) contained proposals for a Northern Ireland Assembly with a power-sharing executive, new cross-border institutions with the Republic of Ireland and a body linking devolved assemblies across the UK with Westminster and Dublin. … Referendums were held on the same day in both Northern Ireland and the Republic of Ireland. In the north, voters were asked to ratify the deal. In the south, they were asked to approve a change to the constitution of Ireland. All sides agreed a credible majority was required if the deal was to survive. While most nationalists and republicans were clearly in favour, a unionist and loyalist majority was far from certain. … In Northern Ireland, 676,966 people voted in favour of the deal, while 274,879 voted against. The ‘yes’ vote was 71.12%. Turnout was a record 81.10%. In the Republic the recorded ‘yes’ vote was 94.39%, with 1,442,583 people voting in favour and 85,748 voting against. …

Good Friday and the wait for a new politics in Northern Ireland (15/4/2015) | David Mitchell @openDemocracy   … For unionists, it was simply a pragmatic response to ensure that pro-Union voters did not lose out in the “winner takes all” Westminster system. … A pall of negativity has rested on the Northern Irish political scene at least since the Belfast City Hall flag protests began in late 2012. There has been failure to make substantive progress on the three issues which are symptomatic of the underlying and ongoing identity conflict: flags, parades and the past. … According to the 2013 Northern Ireland Life and Times Survey the proportion of people who think relations between Protestants and Catholics are better now than five years ago has fallen from sixty-five percent in 2007 to forty-five percent in 2013. …

The Troubles Are Back (5/10/2015) | Eamonn McCann (@IrishTimes) @nytimes   … Yet the deal delivered by Senator Mitchell contained the seeds of its own destruction. In effect, the Good Friday Agreement assigned every person in Northern Ireland to either the unionist or nationalist camp, and the decision-making institutions it created, the Northern Ireland Assembly and its accompanying Executive, were designed to be balanced between the two camps. The plan was not to eliminate sectarianism, but to manage its manifestations. …


Ireland Vol.23 (Munster Vol.1 – Clare, Limerick)

#StPatricksDay #HappyStPatricksDay #HappyStPatricksDay2017 #SPD2017 #HappyStPattysDay #Paddysday #Guinness

Ireland Munster

Clare

Limerick


Ireland Vol.22 (Connacht Vol.2 – Mayo, Galway)

Connacht, IE

Mayo

cf. Ireland Vol.3 (Mayo)

Galway


Ireland Vol.21 (Connacht Vol.1 – Leitrim, Sligo, Roscommon)

Leitrim

Sligo

Roscommon


Ireland Vol.20 (Ulster – Donegal, Cavan, Monaghan)

Donegal

Cavan

Monaghan


Ireland Vol.19


UK Vol.65 (Post-EUref Vol.11 – including UK Prime Minister Theresa May’s Brexit speech)

Here are articles on Brexit including scholars’ analyses, UK Prime Minister’s speech, et al. Excerpts are on our own.

I was wrong on Brexit (12/12/2016) | Niall Ferguson @BostonGlobe
The three words you are least likely to hear from an academic are “I was wrong.” Well, I was wrong to argue against “Brexit,” as I admitted in public last week. …
…Europe became the world’s most dynamic civilization after around 1500 partly because of political fragmentation and competition between multiple independent states. …the rule of law ? and specifically the English common law ? was one of the “killer applications” of western civilization.
…the costs of Brexit would outweigh the benefits. …the doom-laden projections of a post-Brexit recession from the International Monetary Fund, the Treasury, and others. …
…Americans since the 1960s have wanted the Brits inside the EU to counterbalance the French…
… First, the warnings I and others gave about European monetary union back in the 1990s have been wholly vindicated.
Second, Europe’s supposedly common foreign policy has been a failure. …
Third, the EU institutions mishandled the financial crisis. …
Nor is that all. Last year EU leaders… Finally, they utterly misread the mounting public dissatisfaction ? not only in Britain ? with the consequences of unfettered free population movement.
… His mistake was to accept the risible terms that the European leaders offered him back in February on EU migrants’ eligibility for benefits, instead of marching out of the conference room and announcing that he would campaign for Brexit. My mistake was not to urge that.
… Many “Remainers” have dug in deeper and waste their time dreaming up ways of derailing Brexit. The Brexiteers meanwhile are dividing like 19th-century Protestant sectarians over how “hard” Brexit should be. …

Key points from May’s Brexit speech: what have we learned? (w Video; 1/17/2019) | @jonhenley @guardian
The single market
…her top two Brexit priorities are controlling EU immigration and withdrawing from the jurisdiction of the European court of justice.
… Single market membership, she said, would mean accepting the EU’s four freedoms – free movement of goods, services, capital and people – and “complying with the EU’s rules and regulations that regulate those freedoms”.
…Britain will seek “the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement”.
The customs union
…goods from outside the area are charged a common external tariff to cross its border and enter it; goods already within it can circulate and cross borders freely.
…she did not want Britain to be bound by the common commercial policy and the common external tariff.
But she also said she wanted tariff-free trade with Europe and cross-border trade there to be “as frictionless as possible”…
… Car parts, for example, cross EU borders dozens of times before completion, and customs checks would be disastrous…
Parliamentary involvement and article 50 timing
… This deadline may be problematic if the supreme court rules, as expected, later this month that parliament must vote on the formal article 50 notification to the EU, and it could also be delayed by elections in Northern Ireland.
… “I can confirm today that the government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force.”
Controlling EU immigration
…while wanting to continue to attract “the brightest and best to study and work in Britain”…
… She has previously rejected the idea of a point-based regime, and ministers have hinted at the possibility of work visas, but no new system has yet been formally announced.
A transitional deal
…a “cliff-edge”: …with no future relationship defined.
…“implementation period”…
But she is opposed to the kind of interim arrangement favoured by some who want a lengthy…
Status of EU citizens in UK and UK citizens on continent
…“negotiating capital”. …the government wants to guarantee their rights – and those of British citizens on the continent – “as early as we can”. …
The EU budget
…“some specific European programmes… …it is reasonable that we should make an appropriate contribution.”
The EEA option
… “We do not seek to adopt a model already enjoyed by other countries.”
… Britain did not want “partial membership…or associate membership…
Ireland and the union
…maintaining the pre-EU common travel area between Britain and Ireland… …avoid a “hard border” between Northern Ireland and the Republic.
…describing the union between England, Scotland and Wales as precious. …
Tone
…“I want us to be … the best friend and neighbour to our European partners,”…
…“an act of calamitous self-harm for the countries of Europe. …
…“no deal for Britain is better than a bad deal for Britain”…
Conclusion

Theresa May’s Brexit speech in full: Prime Minister outlines her 12 objectives for negotiations: Britain is leaving the Single Market but will still cooperate in other areas (1/18/2017) | @independent

London Mayor Sadiq Khan in stinging attack on Theresa May’s Brexit plans, warning they could ‘rip Britain apart’ (w Videos; 1/18/2017) | @PippaCrerar @standardnews

How a British Court Ruling Could Delay Brexit Negotiations (w Podcast; 11/9/2016) | @whartonknows
… Olivier Chatain, professor of strategy and business policy at the HEC Paris business school, and a senior fellow at Wharton’s Mack Institute of Innovation Management, and Michelle Egan, a professor at American University’s School of International Service…
More Uncertainty
Economic Impact
Finding Common Ground
Brexit Referendum Will Stand
A Brexit Bill

Oxford academics warning of Brexit ‘disaster’ (1/11/2017) | @seanjcoughlan @bbc
A “hard Brexit” would be the “biggest disaster” to have hit the UK’s universities for many years, a university head told MPs.
‘Culturally allergic’
‘Manchester Utd problem’
Research funding
Unanswered questions

Can Brexit Be Achieved with Minimal Damage? (w Podcast; 10/7/2016) | @whartonknows
American University’s Michelle Egan…

How Brexit Could Boost the European Union (9/21/2016) | @whartonknows
Size Matters a lot
Then There Is Regulation
Talent Is Key
Real Investments
Yet More Uncertainty
Opportunities for the Rest of Europe
– Big is beautiful? promote it
– Boost the single market? but shift the focus to direct benefits for people
– Smart integration? do things that could not be done before
– Bring over banks, corporates and the ecosystem? make it appealing to move
– Leverage investment opportunities? follow the money
– Attract the leaders of tomorrow? EU-27 as the place to be
– Make it appealing for skilled workers to move back
– Finally, it is all about trust, stability and the reduction of uncertainty

Amid Brexit and Spotify threats, Stockholm adapts to remain globally competitive (9/20/2016) | Elizabeth Patterson and Marek Gootman @BrookingsInst

What Comes Next for Europe? (6/27/2016) | @DBachYSOM & ANDREW METRICK @AdvancedMgmt @YaleInsights
Andrew Metrick:… The bigger concerns are long run. … With the UK exiting, it’s the first time we’ve seen any significant pullback from this project, which had mixed success, but certainly kept alive its noble ideals. …
… Uncertainty discourages people from making long-term investments. …
David Bach:… Three million EU citizens live and work in the UK, and 1.5 million UK citizens live in Europe. …the European Union has to think, on the one hand, about how to manage this exit in a way that protects the interests of the stakeholders in the 27 continuing EU countries…
…at least three different groups within the “Leave” camp. You have conservative, neo-liberal types around Boris Johnson and others who feel that EU regulation was stifling business and want to control their own sovereignty. The second camp is around Nigel Farage and the UK Independence Party—the nativists who are anti-immigration. And then you have a third group, trade unionists who felt that Europe was too pro-business, and they want to go back to a model of greater protection. …
Metrick:… Northern Ireland is really tricky. It is the case that they’ve had no borders with the Republic of Ireland for a while, but I don’t know whether the religious issues that made this split in the first place are going to be any less potent.
Bach:… The presumption was that if we used Article 50, it was going to be some small Eastern European nation that couldn’t keep up with the regulations. …
Metrick: No one believes the optimal size of government is everybody under one government. There are always going to be certain things we want local control over. This is a battle we have a lot of experience with in the United States, and we fought a civil war over it. …

Ivan Rogers and the great British Brexit pantomime (1/4/2017) | @RGWhitman @ConversationUK @UKandEU

Scottish independence: Decapitate Britain, and we kill off the greatest political union ever (9/8/2014) | Boris Johnson @telegraph


Ireland Vol.17 (A COMPARATIVE CRITIQUE OF THE PRACTICE OF IRISH NEUTRALITY IN THE ‘UNNEUTRAL’ DISCOURSE)

Here is a paper, A COMPARATIVE CRITIQUE OF THE PRACTICE OF IRISH NEUTRALITY IN THE ‘UNNEUTRAL’ DISCOURSE (PDF, 2008) | Dr @DevineDrKaren @LawGovDCU. Excerpts, underlines, italicization, et al. are on our own.

ABSTRACT

This article takes a comparative, empirical look at the practice of Irish neutrality during the World War II. It critiques a model of neutrality presented in a thesis on Irish neutrality called Unneutral Ireland, consisting of factors derived from an analysis of three states regarded as well-established European neutrals, Austria, Sweden and Switzerland that reflect the practice of neutrality. That model focused on the rights and duties of neutrality; the recognition of Ireland’s status by belligerents and others; the disavowal of external help; and the freedom of decision and action. This present article focuses on the factors flowing from these latter obligations that are cited in an analysis of the practice of Irish neutrality, in the Unneutral thesis as proof of Ireland’s ‘unneutral’ status, i.e. ideology; involvement in economic sanctions; partiality; the practice of Irish citizens joining the British army; and post-World War II factors such as Ireland’s EEC membership. In this article, Ireland’s practice of neutrality is evaluated against the practice of other European neutral states – Sweden, Switzerland, Austria and Finland (including Norway’s truncated practice of neutrality) – vis-à-vis the above variables. This article also deals with the perennial myths that crop up in ‘unneutral’ discourses on Irish neutrality, for example, the oft-cited incidence of de Valera’s alleged visit to the German legation in Ireland to sign a book of condolences on Hitler’s death and the suggestions of a British government offer of a deal on Northern Ireland in exchange for Ireland dropping its neutral stance and supporting the Allies in World War II. The article concludes that the practice of Irish neutrality is equivalent to or superior to the practice of other European neutral states, thus undermining the dominant discourse that Ireland’s neutrality is a myth and that Ireland is ‘unneutral’.

INTRODUCTION

A discourse produced by a number of academics, journalists and political elites claims that Irish neutrality is a ‘myth’, because the alleged inadequate practice of Irish neutrality during the Second World War vis-à-vis a conceptual model of neutrality renders Ireland ‘unneutral’. This conclusion, that Ireland’s neutrality does not exist, is reflected in much of the academic discourse on Irish neutrality and is echoed in the media discourse. Discourses propounding the conceptual metaphors that Irish neutrality is mythical or ‘unneutral’ are pertinent to examine, given the current significance of Irish neutrality for a proportion of the electorate who vote against EU Treaties in referenda due to perceived threats to neutrality arising from proposals for progressive European integration in the area of security and defence. The repetition of these negative discourses on Irish neutrality has the effect of ‘sedimenting’ the ‘unneutral’ and ‘myth’ metaphors, i.e. such discourses become ‘common sense’ and may, over time, constitute deeply internalized structures that people exposed to the discourse take for granted and as natural. Such discursive structures are argued to have causal effects that are linked to policy…

These ‘myth’ and ‘unneutral’ discourses are propounded by many elites who advocate Ireland’s participation in NATO and/or a European Union (EU) military alliance, and who support the more recent, concrete plans to build up EU military capabilities (with an associated hypothesised rationale to rival US military hegemony) proposed in the Lisbon Treaty. Irish neutrality is a barrier to these policies, and the ‘unneutral’ and ‘myth’ discourses are produced and reproduced to undermine the value and status of Irish neutrality as part of the strategy to persuade voters to acquiesce to the proposed EU military and defence policy goals.

This article critiques the Unneutral thesis’s premise of deriving its model of neutrality from well-established practitioners of neutrality, namely Austria, Sweden and Switzerland.  It reviews the Unneutral analysis of the model’s variables with respect to Ireland, specifically, the variables of “the rights and duties of neutrality [broken down into (1) due diligence and defence resources, (2) defence expenditure and costs of attack, and (3) supplies, trade and economic dependence]; the recognition of Ireland’s status by belligerents and others; the disavowal of external help; and the freedom of decision and action”.  It also reviews some ancillary factors that are cited in Unneutral Ireland as additional evidence that Ireland is unneutral, specifically, ‘ideology’, ‘involvement in economic sanctions’ and ‘impartiality’ and the fact that Irish citizens joined the British army.  Finally, the article considers the perennial issues that crop up in the ‘unneutral’ discourses: de Valera’s alleged visit to the German legation in Ireland to sign a book of condolences on Hitler’s death and the suggestion that de Valera was open to a deal on Northern Ireland in exchange for Ireland’s neutrality during the war, as well as post-World War II factors such as Ireland’s membership of the EEC. The argument of this article is that if the behaviours of Austria, Sweden and Switzerland were fairly evaluated, each of them would also be deemed ‘unneutral’ alongside Ireland, because each state violated these variables to an equal or greater extent.  This conclusion gives rise to the following propositions: either the model of neutrality in the Unneutral thesis effectively defines neutrality out of existence, and is thus unhelpful in a fair and realistic evaluation of the practice of any state’s neutrality; or the Irish practice of neutrality is not ‘unneutral’ by comparison with the above-named neutral states and Ireland was, in some respects, arguably more neutral than these others.

CRITIQUE OF THE MODEL

The first problem with the approach to formulating the model of variables used to evaluate Ireland’s neutrality in the Unneutral thesis concerns tautology.  The thesis takes Austria, Sweden and Switzerland as neutral states because they are “universally regarded as such”, because they are “commonly identified as neutral…in the literature”. Using a common, inter-subjective belief that these states are neutral states to identify them as exemplars of a concept of neutrality, rather than arriving at this classification by analysing the practice of their neutrality, is a flawed basis for the formulation of the model.  The Unneutral thesis does not evaluate both Ireland’s neutrality and the practice of neutrality of these neutral states vis-à-vis its model of neutrality variables. There is no systematic analysis in the Unneutral thesis evaluating whether these neutral states adhered to the variables of neutrality.  Only Ireland is evaluated against these variables, and is found wanting, to the extent that a dominant discourse is in operation that Ireland is ‘unneutral’.

Garret FitzGerald also… contends that it is at least questionable whether Ireland can properly be described as having been “neutral”, because the scale of assistance given secretly to Britain was scarcely compatible with the concept of neutrality under International Law’.

And it is not just the proponents of the ‘unneutral’ discourse in Ireland, but also “both great power blocs, and all the more, the Continental neutrals” who have viewed Ireland’s practice of neutrality as “sui generis”.  Thus, it is necessary to evaluate the neutrality of Sweden, Switzerland and Austria as well as that of Ireland against those variables of the model, to establish whether Irish neutrality really is all that different from the neutrality practised by European neutral states during and after the Second World War. The second problem with how the Unneutral thesis evaluated Ireland’s neutrality concerns the proposition that if each of those neutral states violated many elements of the thesis’s model of neutrality, they would also be deemed ‘unneutral’.  The approach of evaluating the failures of each state on a ‘sortal’ rather than a ‘scalar’ basis effectively defines neutrality out of existence.  The problem is that there is no indication of a hierarchy of the variables in the model, of which variables are fundamental to the concept of neutrality and which variables are auxiliary.  Is it possible to violate auxiliary elements of neutrality and still be considered a neutral state?  Or is it the case that a violation of just one variable of the model renders a state ‘unneutral’?  Does a state have to violate all of the variables to be deemed ‘unneutral’?  This is not made clear. Although it is possible to argue for a scalar concept of neutrality that allows violations of some variables in the model, the specification of such conditions would be political and contested.  This issue pervades the following comparative analysis of European neutral states’ policies and practices of neutrality.

Benevolence and Concessions

Ireland did give assistance to Britain during the war in terms of shipping, emigration and aviation policy; for example, de Valera came up with “an ingenious plan to help Britain while at the same time preserving the appearance of strict neutrality”. Once the Irish authorities located a submarine, information on its whereabouts would be radioed “to the world”.  This would not be of assistance to the Germans because they were too far from Ireland to use the information, but Britain could take action. However, most of the actions were mutually beneficial. It was out of a determination to remain neutral that De Valera denied the British the cooperation from Ireland they wanted most: the return of the Treaty Ports to British hands, and as a result, Irish neutrality was never legally compromised. Bill McSweeney reasoned that Ireland’s “defence was backed up by some ostentatious displays of military impartiality and other, less public, concessions to the Allied cause which were deemed necessary to pacify an outraged Westminster government”. Arguably, Salmon and FitzGerald’s point about Ireland’s alleged lack of adherence to the international law of neutrality could apply to all of the neutral states, not just Ireland. As Risto Pentillä explains, the World Wars shattered the idea of strict, impartial neutrality because those who were able to stay out of the war (many neutral states were invaded) had to compromise their neutrality in economic and military terms in favour of the stronger belligerent side. Citing the case of Sweden, which allowed the transport of German troops through its territory, he argues that such states were legally non-belligerent rather than neutral, concluding, however, that, “because of these concessions, Sweden managed to stay out of the war even if it broke legal rules concerning neutrality”. Constance Howard cites another example in the case of the Swiss, who also made concessions to the Axis side: “while the Swiss were determined to maintain their political independence and to defend their neutrality, the Government were obliged to make a number of concessions to Germany and Italy”. Thus, Rodrick Ogley surmises, “Sweden and Switzerland, like other successful neutrals, had to make concessions, in their case, largely to the Axis powers”. Ogley argues, the fact that Sweden and Switzerland survived at all as neutrals in the Second World War says much for their diplomatic skill. Their problem, essentially, was to concede what had to be conceded to Axis powers, and no more, while making clear that they would fight against any wholesale assault on their independence.

Ogley concludes that “only Ireland, Portugal, Spain, Sweden and Switzerland of the European States, preserved their neutrality throughout the war”. Thus, Ireland is included in the bracket of successful European neutral states in his analysis.  It also appears that Ireland did not have to make as severe concessions as other European neutrals – such as facilitating the transportation of British or German troops, as some other neutrals did – thus casting doubt over the argument made by Salmon and FitzGerald that Ireland’s neutrality is a myth because it was of a ‘less clear-cut’ type than that of Sweden or Switzerland.

Impartiality and disavowal of external help

Impartiality is a property of neutrality that Salmon finds lacking in the exercise of Irish neutrality: he argues “partiality to one side or the other is not simply to be added up and judged acceptable if the score comes out evenly at the bottom. There can be little doubt that the Irish engaged in unneutral acts and in partial behaviour”. Dwyer recounts that de Valera was cautious in providing measures that might appear to prove beneficial to one side, i.e. the British, more than the other side, and he had made changes to an exclusion order to include aircrafts and ships because, “if the policy were directed against U-boats alone, critics would charge that it was entirely anti-German”.  Salmon also argues that an estimated forty thousand Irishmen from the Republic fighting in the British army “did infringe neutrality by its partiality”.  This argument, however, runs contrary to the legal concept of neutrality, for example, the Swiss Doctrine of neutrality provides that neutrality is not conducted by private individuals. Therefore in a neutral country there is freedom of the press, and freedom to join an army if an individual so wishes.  Furthermore, Salmon raises the question of whether involvement in the EEC and EPC is incompatible with impartiality, especially as Ireland has participated, along with other Community members, in imposing sanctions against various states on various occasions. Yet, the 1993 Swiss Federal Council report concluded “the law of neutrality does not render neutrality and participation in economic sanctions fundamentally incompatible”. … What of the behaviour of the other neutrals, such as Sweden and Norway? Those two neutral states also engaged in similar discussions, with some analysts claiming that Sweden had “made secret preparations for co-operating with the West in the event of Soviet aggression and neutrality failing”. Moreover, neutral Norway (at least up until the time the Nazis intervened to preempt Churchill’s landing of British troops) discussed a potential defence alliance; as Hicks recounts: the only occasion on which a slight relaxation of Koht’s strict conception of neutrality was noticeable was when he took part in deliberations on the possibility of a defensive alliance between the Scandinavian states and Finland after the conclusion of the Russo-Finnish Peace treaty of 12 March 1940.

What Salmon’s analysis fails to consider is that the accusations he levels at Irish neutrality are not unique to Ireland; in an effort to avoid participating in the war, all of the other European neutral states engaged in unneutral acts and were biased in favour of hostile or friendly neighbours. Even the ‘British Representative’ in Ireland, Sir John Maffey, understood that De Valera’s “goal had been to maintain neutrality and to help us within the limits of that neutrality to the full extent possible”, and he further understood that de Valera regarded his policy as consistent. Nevertheless, Salmon continues, the real question is whether the Irish reservation was sufficient to save their policy of neutrality. Preparations for and expectations of help certainly ran counter to the principles underpinning a policy ‘for neutrality’, as followed by Austria, Sweden and Switzerland. …

… The then UK Minister for Health in the wartime Cabinet, Malcolm MacDonald, was sent to Dublin to try to persuade de Valera to allow British troops into Ireland to take over the ports – his advice was given “principally in the interests of Éire in itself”. Fisk surmises, “MacDonald must have realized that this was less than the truth; in her greatest moment of peril since Napoleon planned an invasion across the Channel, Britain was not offering her troops to Éire for de Valera’s benefit”.  In his response to each of the British proposals, de Valera emphatically rejected any possibility of ‘Éire’ abandoning her neutrality. The key point is that de Valera rejected the proposals of external help offered by the British out of a concern to preserve neutrality and the state.

Due diligence and defence resources

Salmon argues, it is difficult to say categorically what constitutes sufficient resources, but at sea and air the Irish clearly did not have ‘enough’, since they were incapable of preventing invasions into territorial waters and airspace, or violations of their neutrality. Their relative defencelessness meant that on occasion they did bend…with respect to ‘due diligence’ the Irish clearly defaulted, particularly in the air and at sea. The Irish objective was simply to avoid participation in the war. That is not neutrality.

Before going into the detail of the “due diligence” accusation, it is worth pointing out, in reference to the last argument, that it is clear from this analysis that the other neutral states also had only one goal in mind – to avoid participating in the war – and this goal was pursued at the expense of many legal rules of neutrality. If Ireland is ‘unneutral’ on this basis, then all of the other states in this present analysis must also be ‘unneutral’.

Fisk reasons that accidental encroachments into Irish territorial waters and a flood of refugees from Britain were the natural burdens of neutrality and de Valera could not have been surprised by these events. Éire was the only British dominion to choose neutrality – the rest of the Commonwealth followed Chamberlain’s lead by declaring war on Germany.

Salmon argues that airspace violations rendered Ireland unneutral, however, it is also the case that other European neutrals also suffered airspace violations, many of them committed by the British. Howard recounts the Swiss experience of airspace violations:  since the summer of 1940, however, British bombers had repeatedly crossed Swiss territory on their way to attack north Italian towns and, in spite of repeated protests from the Swiss Government, this violation of Swiss air by British aviators continued. The Italians complained that Swiss illumination gave an unfair advantage to British bomber crews as it helped them to find their targets in northern Italy.

Norway also experienced airspace violations: Hicks describes how there were minor violations of Norwegian neutrality during this period, in the shape of flights by belligerent aircraft over Norwegian territory. Such incidents were always followed by prompt Norwegian protests to the offending Power when it was possible to identify the trespassing aircraft. …

De Valera’s determination for the state to remain inviolate will be dealt with below, in relation to defence resources and threats of invasion from Britain. The Swiss were in much the same situation as Ireland, with an aggressive, hostile belligerent as a near neighbour in Germany, but they managed to stay out of the war despite similar threats of invasion: In 1943 the Government had real grounds for fear that German threats might indeed be translated into action. Hitherto, also, although Hitler had been greatly irked by Switzerland’s continued independence and neutrality, the advantages which would have accrued from the invasion and conquest of Switzerland had been clearly outweighed by the drawbacks.  The Germans were aware that any attack would be strongly resisted by the Swiss.

The Irish government itself acknowledged that neutrality meant limited warfare with all belligerents. As Frank Aiken, the minister for the ‘Coordination of Defensive Measures’ said on 23 January 1940, “in the modern total warfare it [neutrality] is not a condition of peace with both belligerents, but rather a condition of limited warfare with both…”. De Valera added, neutrality if you are sincere about it means you will have to fight for your life against one side or the other – which ever attacks you first. Neutrality is not a cowardly policy if you really mean to defend yourself if attacked. Other nations have not gone crusading until they were attacked.

Defence expenditure and “costs of attack”

Although, as mentioned earlier, Salmon admits, “it is difficult to say categorically what constitutes sufficient resources”, he does confirm that, “neutrals do, however, need the ability to deter by making the costs of attack too high, relatively, for the belligerent”. Salmon claims that the Irish position was undermined by de Valera’s recognition that Ireland was a small state and the equipment and arms required in modern wars were beyond a small state. These issues were also acknowledged by the small neutral states in mainland Europe. The notion that a certain level of arms means that a defence is 100% effective is a (neo)realist myth; no defence can be 100% effective and the Swedes and other World War II neutrals knew their defence limits too. The important fact is that de Valera pledged that Ireland would fight any incursion from any side, and the costs of attack were made high. This was acknowledged by both the Germans and the British. … Thus, de Valera had shown comparatively sufficient due diligence and defence resource preparations to make the perceived costs of occupation too high for belligerents, an achievement he shared with the other neutral states.

What Salmon’s analysis (in particular the charge regarding Ireland’s lack of arms) fails to acknowledge sufficiently is the British and American refusals of de Valera’s requests for arms. Duggan recalls, “it was difficult if not impossible in the circumstances to procure weapons. Britain was obstructive; the US was uncooperative. … And David Gray, the United States representative in Dublin during the war years and a confidant of the American President (Gray was also related to Eleanor Roosevelt by marriage to her aunt), made the threat from the Third Reich seem remote by comparison: “Allied troops were already poised on Irish soil and Gray had an insensitive amateur’s appetite for action”. Fisk also recounts that de Valera’s persistent, occasionally frantic quest for weapons was to be a consistent theme of Irish foreign policy over the coming years, a search that was principally directed towards the belligerent powers and which was thus always rewarded by demands which would – if met – totally compromise Éire’s neutrality. In return for guns, the British wanted the use of the Treaty ports, the Americans wanted Irish participation in the war, and the Germans – less ambitious because there was little else to be gained – wanted a closer relationship between Dublin and Berlin. Denuded of weapons, Éire’s refusal to participate in the war was no longer just an assertion of sovereignty; from now on, the policy had to prove successful in keeping Éire out of the war.

Supplies, trade and economic dependence

Because there were exchanges of food for military supplies across the Northern Ireland border, a lack of a ‘strategic reserve’ and a dependence on other countries’ shipping for imports of wheat, maize, petroleum and bulk cargoes, Salmon claims “third parties” saw room for influence and manoeuvre, and doubted the credibility of Irish neutrality. On the other hand, Fisk regards de Valera’s prioritizing of food supplies and external trade, followed by censorship, counterespionage and coastwatching, over military measures and air-raid precautions as an authentic policy of neutrality, the desire to maintain the country’s commercial life and safeguard its political integrity from external pressures, while taking only minimum defence precautions on the grounds that neutrality – if strictly adhered to – would obviate the need for enormous military expenditure.

In fact, de Valera turned down trade agreements with Britain in order to safeguard Irish neutrality: in November the war cabinet was told that Éire had rejected the storage and trans-shipment proposals as being incompatible with neutrality and from fears that they would provoke German attacks on the ports if not on the country as a whole. Ireland’s refusal of the trade agreement may have left her vulnerable to the British economic pressure, but the refusal also sealed off a potential serious breach in Ireland’s neutrality and nothing was more important for de Valera.

Although Salmon is right to point out that Ireland was vulnerable, if this vulnerability renders Ireland ‘unneutral’, then Salmon must retract his understanding of Switzerland, Sweden and others as neutral, because those states experienced similar difficulties.  Howard points out that although the Swiss, with the exception of a minority of fanatics and defeatists, were resolved to maintain their political independence, economically they were obliged to align themselves much more closely with Hitler’s Europe. After the fall of France, Switzerland was economically at the mercy of the Axis, which controlled practically all ways in and out of Switzerland. In a trade agreement reached on 9 August 1940, Germany undertook to supply her with certain quantities of raw materials, of which the most vital were coal and iron. In return, Swiss industry was to supply Germany with goods required for her war effort. The Swiss neutrality doctrine states that the neutral country is entitled to trade with belligerents; the neutral country has merely to submit to certain encroachments by the belligerents, e.g. a blockade. … Norway had to deal with a similar situation: “Norway continued to maintain commercial relations with both belligerents – though this to a decreasing extent, and at the price of incurring both Germany and Franco-British displeasure”. It is held that Swedish neutrality during World War Two was compromised by its trade with Nazi Germany, whilst Austria’s leading trade partners were Germany and Italy. The point is that although there is some support for Salmon’s claims that Ireland was non-belligerent in the Second World War because of dependent trade relations or concessions made or assistance given, this analysis shows that Salmon must withdraw his definition of Switzerland and Sweden as being neutral, and to re-brand those states as non-belligerent, because those states failed the same criteria more severely than Ireland is alleged to have failed them. …

“Non-belligerency” and official belligerent acknowledgement of Irish neutrality

Salmon claims that because the British didn’t guarantee not to invade Ireland and refused to officially recognise Ireland as a neutral state, Irish neutrality was not possible. He argues, “neutrality does not come into existence until recognized by both belligerents”, and therefore Ireland was ‘unneutral’; he does, however, concede that “on occasion there was a certain apparent de facto recognition of the Irish position”. It is notable that Hitler did not guarantee not to invade Switzerland, and yet Salmon regards Switzerland as neutral. The British always refused to acknowledge Ireland’s neutrality and preferred to use the term ‘non-belligerency’, because Ireland was still a member of the Commonwealth. As Fisk recounts, a formal recognition of Éire’s neutrality presented a serious difficulty, said Eden, because ‘we do not want formally to recognize Éire as neutral while Éire remains a member of the British Commonwealth’. This would surrender the ‘constitutional theory of the indivisibility of the Crown’.

Duggan’s account of this period states, the [German] Envoy had reported Allied pressure to change the Irish neutrality posture to a stance of technical nonbelligerency, which would be designed, he said, to permit the Allies to use the ports”.

Therefore, regardless of the language the British government used because of political considerations, it was recognised by both the British and German sides that Ireland was indeed ‘neutral’, and this legal, official stance could only turn into “non-belligerency” if troops were allowed in (as in the example of Sweden cited by Pentillä above). Britain’s official view of Ireland’s status emerged during times when the British government tried to persuade the Irish government to allow British soldiers into Ireland. MacDonald offered, we would be content for Éire to remain non-belligerent if she invited our ships into her ports and our troops and aeroplanes into her territory to increase her security against the fate which had befallen neutral Norway, Denmark, Holland, Belgium and Luxembourg.

Whereas MacDonald avoided the word ‘neutrality’ throughout these meetings, in fact there was ‘official British’ recognition of Ireland’s neutral status in various forums, although many were off record.  There are several examples of this “certain apparent de facto recognition of ” Ireland’s neutrality by Britain.

In a War Cabinet memorandum, Viscount Cranbourne, the UK Dominions Secretary from 1940-2, described life in “Southern Ireland” as very uncomfortable, and stated that the discomfort “is a direct result of her neutrality”. When Cranbourne informed Churchill of a request for arms from de Valera in a cover note attached to a dispatch from Maffey, Churchill replied, no attempt should be made to conceal from Mr de Valera the depth and intensity of feeling against the policy of Irish neutrality. We have tolerated and acquiesced in it, but juridically we have never recognized that Southern Ireland is an independent Sovereign State, and she herself has repudiated Dominion Status. Her international status is undefined and anomalous.

The issue behind British refusal to officially acknowledge Ireland’s neutrality was largely inspired by Churchill’s imperialist attitude towards Ireland. Fisk reports, there is, throughout Churchill’s writing and speeches at this period, an ill-concealed impatience with the Irish that sometimes turns into contempt. Above all, there was his notion that by rejecting the Oath of Allegiance, de Valera’s Ireland might somehow legally cease to exist. It was a very disturbing idea to have been gestating in the mind of a future British Prime Minister.

At the time described by Fisk, Churchill, still smarting over the Anglo-Irish rapprochement of 1938 [Chamberlain’s decision to hand the Treaty Ports back to de Valera]…also brought with him to the Admiralty his profound distrust of de Valera’s young state….Here, clearly, would be no friend of a neutral Éire. So it was to turn out, for as Britain went to war against Germany, Churchill’s contempt for Éire’s political status surfaced almost at once. Only two days after the British declaration of war, he ordered the Admiral of the Fleet Sir Dudley Pound, the First Sea Lord, to compile a special report ‘upon the questions arising from the so-called neutrality of the so-called Éire’.

On foot of this request, Sir William Malkin, the UK Foreign Office Legal Advisor, wrote a ten-page report (it was classified top secret and was never seen by de Valera) on the legal aspects of Irish neutrality and the Treaty ports, which amounted to ‘as blunt an acknowledgement of Éire’s juridical right to remain neutral as had yet come from a British Government official’. Malkin went on to define the complexities of Irish neutrality in a way that morally precluded any British action against Éire.

Anthony Eden added to the report by hand: I fear that it becomes every day clearer that it is scarcely possible for “Dev” to square neutrality with the grant of the facilities for which the Admiralty ask. And at least 80% of the Irish people favour neutrality. Altogether a pretty problem.

Churchill responded to the paper in a way that revealed the extent of Churchill’s disturbing obsession about Ireland: he did not just throw doubt on the international validity of Irish neutrality. He was questioning Éire’s very right to exist as a separate and independent state….seventeen months later, Churchill had become possessed of the idea that Éire had no international rights at all.

Thus, the refusal by ‘Britain’ to recognise the neutrality of Ireland was in effect, Churchill’s refusal to recognise Ireland as a sovereign state, and this was the real dynamic behind Salmon’s argument that the British never simply accepted the 1939 Irish aide-mémoire and throughout the war refused to recognize the Irish position formally. Moreover, there was lacking not only a guarantee of respect for Irish neutrality but also a guarantee not to invade Irish territory: this latter omission was quite deliberate.

Germany did officially recognise Ireland’s neutrality; hours before Germany’s invasion of Poland, “on the instructions of Joachim von Ribbentrop, the German Foreign Minister, Hempel told de Valera that Germany would respect Éire’s neutrality.

Protective umbrella and “relying on Britain”

Salmon’s thesis claims that “the Irish relied on a protective umbrella supplied by the British” and that “during the war there was no consistent Irish disavowal of external help…there still remained a belief in the protective umbrella”. Salmon is employing a classic (neo)realist myth in his use of the concept of a protective umbrella to argue that Ireland is ‘unneutral’. His argument is feasible in a different sense, in terms of seeking help to prevent an attack, as a speech by de Valera on 5 October 1943 illustrates. On that occasion, the taoiseach reasserted in tones reminiscent of a 1940 speech recalled earlier, that if Ireland were attacked by one side, Ireland would seek aid from the other. In this sense, the notion of a protective umbrella applies equally to the other major belligerent in the War, Germany, as it does to Britain.  Regardless, as Duggan points out, “this did not indicate any overt change in maintaining the policy of neutrality”. Salmon’s argument may also be resting on the notion that the Germans would have to overcome Britain before launching an invasion of Ireland, but that argument does not hold either, given the inability of the British to defend Belfast and the indications of German plans to occupy Ireland directly. Fisk posits, if the British could not even defend Belfast and protect these people, how could they possibly have guaranteed Dublin’s safety under air attack if Éire had allied herself to Britain in 1940?” and the British themselves, through MacDonald, put it to de Valera that a German invasion of Ireland might precede an invasion of Britain.  Thus, the notion that Ireland was relying on Britain to protect her from a German invasion does not stand up to scrutiny, because Britain was simply incapable of defending any part of Ireland from the Axis aggressors.  Furthermore, it was the British that were most hostile to Ireland and her policy of neutrality throughout the Second World War. In an interesting reversal of the ‘protective umbrella’ thesis argued by Salmon and others, after the blitz of the British cities began, there were rumours that the North [of Ireland]’s freedom from attack could be put down to the fact ‘that de Valera has indicated to the German embassy that Ireland is to be regarded as a whole’ and there was ‘a belief that the neutrality of the South would somehow cast a protective shield over Northern Ireland’.

Salmon was cited earlier as drawing attention to the fact that Churchill was very careful not to acknowledge or guarantee Irish neutrality; in fact, Churchill threatened to invade Ireland several times and made reference to these intentions in his victory speech after the War ended. Fisk argues that, as early as 1940, “Éire now believed that a British invasion was more likely than a German attack”. British Cabinet records show that, in the event of an enemy invasion of Ireland, Churchill proposed plans to gas the Irish population, as he was prepared to use poison gas against other populations during World War II. As Chomsky points out, as Secretary of State of the War Office in 1919, Winston Churchill was enthusiastic about the prospects of ‘using poisoned gas against uncivilised tribes’ – Kurds and Afghans…

The validity of “the Irish” relying on Salmon’s (neo)realist concept of a British protective umbrella is undermined by the fact that “de Valera was never able to rule out the possibility of British attack”. Throughout the War, de Valera did not know which side was going to be the first to launch an invasion of Ireland and he had to make plans to tackle both the Germans and the British, and also the Americans. Fisk reports that in June 1944 “Éire thought she might be invaded by American troops”. Duggan recounts that, Hempel passed on the following British secret service report: in their judgement the Irish army was very good, in spite of a shortage of armament; that factor meant that a large force of, say, 100,000 men would be required for a quick occupation of Ireland” and that Hempel felt a British attack had to be reckoned with – “de Valera did not exaggerate when he stressed the threat from both sides”. Fisk confirms that, “the Irish Government anticipated not only an invasion but an occupation of large parts of Éire by British or German troops.”

Ideological impartiality

Salmon quotes FitzGerald who said in 1980, “there really isn’t such a thing as neutrality today: we are part of Western Europe and our interests coincide with theirs” and he argues the fact that Ireland’s profession of itself as not neutral between ideologies (i.e. between Western values and Communism) violates neutrality. However, the other neutral states also declared they were part of Western Europe and shared the associated values. Hakovirta states “the neutrals identify themselves ideologically with the West”. Schlesinger notes Austrian foreign policy’s general identification with the West as a value system with significant economic and cultural relations with Germany and that Austria’s neutrality was a consequence of a Soviet-Austrian understanding.  Furthermore, Schlesinger points to an analyst who declared that Austria and Switzerland, as two ‘alpine neutrals’, had been “more Western than the West”. Keatinge notes that Finland has a consideration for the Soviet Union, mirroring Ireland’s consideration for the United States, and argues that Sweden and Switzerland are “essentially oriented to the west”. Andrén clarifies this in more detail; Sweden has never sought to assume a neatly balanced position in all major respects between the superpowers or between the power blocs. The Swedish policy of neutrality is related only to security, not to ideology, economic relations, or other aspects of international affairs. Sweden has repeatedly and emphatically rejected the idea of ideological neutrality.

McSweeney argues “the law, for what it is worth, places no barrier to neutrality for a nation which is ideologically close to one of the belligerents. Nor does it demand ideological impartiality even during a war”. He argues that impartiality is not with respect to ideology or culture, but the likely consequences of ideology, such as trade, communication links and the possibility of recruitment and propaganda.

Condolences

Mansergh recounts, “the rigid formalistic adherence to the letter of neutrality, which found significant expression on many occasions, caused much misunderstanding of Éire’s position even among the members of the united nations most friendly to her”. One such occasion concerns de Valera’s “formal call of condolence on the German Minister on 3 May 1945” after the end of the war. This incident is a central part of the anti-neutrality discourse of the past 35 years and is continually cited in the context of arguments that seek to undermine positive adherence to Irish neutrality by members of the Irish public (particularly those who have vetoed EU treaties in the 2001 Nice Treaty referendum and 2008 Lisbon Treaty referendum in an attempt to protect Irish neutrality). …

This ‘book of condolences’ myth is widespread: it is part of mainstream publicly-available accounts of Irish neutrality.  For example, it appears in the first and highest ranked article in a Google search on “Irish neutrality”; it arises in tourist guides’ talks; it is cited by secondary school students of history; it is a constant in public and political discourse in Ireland; and it is part of media discourse on Irish neutrality abroad. Its ubiquity is connected to the activities of a significant number of anti-neutrality academics, politicians and journalists, such as Salmon, FitzGerald, Roberts, Girvin and Collins, who continue to publicize and promote the story that de Valera went to the German Legation in order to sign a book of condolences and/or to sympathize over the death of Hitler.   There are three core untruths in this collection of discourses: (1) de Valera went to the home of Eduard Hempel, the German Minister in Ireland from 1937 to 1945, not to the German legation (the legation was the equivalent of a German Embassy at that time). This is an important detail, because the claim that de Valera went to the Legation obscures the fact that the central purpose of the visit was of a personal nature.  (2) De Valera did not sign a book of condolences. …  (3) De Valera’s visit was an act of courtesy, rather than a call of condolence. …

… According to Duggan’s account, de Valera paid a visit out of consideration for Hempel– “the German minister, who deduced his mission as being the preservation of Irish neutrality”, who was “a great favourite of Dev’s because he had fought against any German infringement of Irish neutrality” – and because it was the right thing to do.  His attitude to “the displaced German diplomat” was “charitable and understanding. He granted asylum to him and his family”. De Valera defended his decision to grant Hempel asylum against British and American pressure to do otherwise.

Is there other primary evidence that might contradict this account?  There appears to be little official pronouncements to analyse, as de Valera would not make any public comment on the visit. There are two ‘official’ sources that are relied upon by commentators and academics, included in more recently published accounts by Brian Girvin and Clair Wills, in their discussions of the visit: (1) a Dáil statement made by de Valera on 19 July 1945 and  (2) a letter written by de Valera in a private correspondence to the Washington-based Robert Brennan.

Notably, the word ‘condolences’ is absent from the letter text cited; de Valera used the word ‘courtesy’. The same is also true of the Dáil statement; de Valera never used the word ‘condolences’, he used the words ‘courtesy’ and ‘courtesies’. … The political context of the interpretation of the event is the fact that de Valera knew that his personal visit would be deliberately misrepresented by the British and the Americans (who waged vicious propaganda wars against Irish neutrality); turning to the two primary sources for evidence of this context, de Valera noted in the letter to Brennan that his visit had been ‘played up to the utmost’ by the British and the Americans; and in his Dáil Éireann statement he pointed to the spin of the ‘propagandists’ who were displeased with Ireland’s neutrality and sought to ‘malign’ and ‘misrepresent’ the country. …

… This indicates a rather obvious anti-neutrality political position, one that the author acknowledges in the preface to his book: “I was an active proponent of European integration, believing that Ireland should join NATO.” The same pattern is found in relation to Garret FitzGerald, who argued that “military neutrality is immoral” and initiated and carried on a series of columns in the Irish Independent advocating Irish membership of NATO. Later, as Ireland’s minister for foreign affairs, FitzGerald ensured the perpetuity of the condolences story by passing it on to other EC Foreign Ministers. The debate continues in recent historical texts, but what this analysis seeks to highlight is that history is political, particularly the history of Irish neutrality…

EEC membership

Salmon argues that the act of joining the EEC in 1973 cast doubt on the principle of Irish neutrality because Ireland “acceptedthe political objectives of the Community, including political unification and a European identityand the need ultimately to partake in Community defence”. Twelve years after the initial application, the EEC agreed to accept Ireland as a member, and the Irish government put the proposal to the people through a referendum. The 1972 public debate on EEC membership concentrated on the economic implications of membership and although the question of the possible political consequences was raised, the consequences were not explored in any depth. The government took the line that defence co-operation was a consequence and not a pre-condition of political union, and that it would only arise when economic integration was complete. In the campaign in the run-up to the 1972 referendum, Fianna Fáil and Fine Gael reiterated the line that there was no threat to Irish neutrality, and that, in any case, neutrality was accidental, ad hoc, temporary and conditional. The then Taoiseach and leader of Fianna Fáil, Jack Lynch, said Ireland would defend others in the Community and that Ireland had no traditional policy of neutrality like Sweden and Switzerland, and nor did Ireland’s neutrality compare with Austria’s declaration of permanent neutrality. The Labour Party, traditionally a defender of Irish neutrality, was the only large political party to campaign against membership. As Salmon points out, Successive government declarations did not help to clarify the issue: they emphasised the legal position when referring to neutrality, but Irish moral and political obligations when referring to Community commitment. A distinction was drawn between current and future commitments, and between the Community and an alliance.

However, Salmon goes on to argue that this acceptance was the position not only at the elite level: underneath these statements lay a public recognition and acceptance that at some time in the future, and conditional upon certain developments, Ireland would join in the defence of the Community. The problem arose from a reluctance to accept the corollary, namely that such a position involved the abandonment of neutrality.

This is a rather confident statement regarding the state of public opinion given that Salmon does not consider public opinion as a substantive concern in his analysis of Irish neutrality and does not cite any primary evidence in support of this claim. … Keatinge argues the decisive vote of the electorate in favour of membership of the European Community is explained by the quantifiable expectations of economic gain rather than by views, one way or another, on neutrality.

According to Hederman, the Irish population had not decided its preferences on the limits of European integration, and Irish people were no different to other member-state populations in this respect. EEC Eurobarometer opinion poll data supports this view. Keatinge’s and Hederman’s analysis of the debate on EEC membership is corroborated by members of the public exposed to the campaigns of the political parties at the time. In 1995 one such member of the public, Mr. Desmond Curley, wrote a letter to the Editor of the Irish Times newspaper to point out that the former Taoiseach, Dr. Garret FitzGerald, together with the Fianna Fáil and Fine Gael political parties, deliberately minimised the debate on security implications in their campaigns for people to vote ‘yes’ in the referendum on Ireland’s membership of the EEC in 1973. The comparative international literature on neutrality also confirms this version of events: Karsh notes “the dismissive attitude of the Irish proponents of EEC membership to the possibility of Ireland’s entanglement within the political and military designs of the European Communities”. Hakovirta also opines that the question of neutrality was never very important in the arguments presented by the Irish government for EC membership, or even in the Irish EC debate in general. It was basically seen as a limited question of non-membership in military alliances. The government argued that membership of the EC was something quite different from that.

CONCLUSION

Salmon’s conclusion that Ireland’s neutrality does not exist has spread into and seemingly taken root in the mainstream academic discourse on Irish neutrality, and is echoed in the media discourse. The approach Salmon has taken in evaluating a state’s neutrality according to a legalistic, prescriptive, sortal definition has effectively defined neutrality out of existence, because any empirical evaluation of a state’s neutrality shows discrepancies between theoretical and legal prescriptions and state practices. … The assertion by many academics that Ireland’s neutrality is questionable because it does not mirror the clarity of the concept reflected in the practice of other European neutral states is therefore falsified through this comparative analysis. Tonra summarises the ‘unneutral’ thesis as one in which Ireland’s “neutrality has been dismissed as an almost adolescent effort to distinguish the state from its ancient enemy”… Neutrality is a concept needing evaluation in relation to the particular time in which it exists and the situation thereof. … it may be well to suggest a distinction between the factors contributing to the creation of these rules of the international law of neutrality rights and the factors conditioning their application. It is apparent that economic necessities and opportunities and political alignments moved the states of the sixteenth and seventeenth centuries to embrace and advocate particular rules. But the rules having once come into vogue often developed into a servant stronger than the master. The rules became part of the factual situation which statesmen had to take into account in shaping their policies from time to time. This was true because the rules were themselves the reflection of economic and political realities.

Thus, many empirical differences in the conduct of neutrality are argued to legitimately exist, and are rationally explicable in the context of state interests, the external environment and perceived associated demands. Evaluations and conclusions as to a state’s neutrality based on a particular definition will always be questionable, because the concept is fundamentally essentially contested. What is clear is that Ireland’s practice of neutrality was arguably as clear-cut, legally circumspect, and sufficiently deterring, credible, recognised and respected, as that of the other neutral European states during the Second World War, if not more so. As a result, the current elite strategy to discredit Irish neutrality through incomplete comparative or ideological analyses of the practice of Irish neutrality, and to claim on the basis of such analyses that the public has ‘illusions’ about the nature of Irish neutrality during the Second World War is undermined.  Neutrality is a complex policy, in theory and in practice, and tends to be universally hated by all sides. The Americans waged an unscrupulous campaign in the press against Irish neutrality, as did the British. As Frank Aiken, the Irish Minister for the Coordination of Defensive Measures, put it in January 1940…


UK Vol.59 (Religion and the patterns of conflict in Northern Ireland)

Here is a (draft, 2008?) paper, Religion and the patterns of conflict in Northern Ireland (PDF) | Prof Jennifer Todd @ucdpolitics @YaleMacMillan. Excerpts, underlines, italicization, et al. are on our own.

Religious distinctions are key to social and symbolic boundaries in many societies, and most certainly so in Northern Ireland. The historical patterning of religious opposition, most particularly perhaps in the conservative character of the forms of Protestantism and Catholicism in Ireland, is clear. Recent works have traced the many ways religion has fed into conflict in the present, and the groups for whom it is important for conflict. Building on this research, I will point to some general tendencies or mechanisms which have kept religion mattering for conflict, and to show the particular character this has given to conflict. This is intended to contribute to the analysis of the way multiplex symbolic boundaries can strengthen singular social boundaries and political oppositions and to help clarify the role religion can play in a multiply constituted conflict.

The Northern Ireland conflict 

The conflict in what is now Northern Ireland lies in a direct line of descent from the English reconquest and colonisation (plantation) of Ulster in the early 17th century. This colonisation was never separable from religious differences.  Counter reformation, via Irish priests trained on the continent, came to Ireland before the English reformation had taken hold, so that by the early 17th century, when the bulk of plantation took place, religious conflict was already underway. …

The result was a multiply-constituted conflict, where power relations… were partially organised by formal and informal religious organisation and networks, and where symbolic boundaries were multiplex, with religion, moral-political norms and civilisational values, historical narratives of plantation, and ethno-national identities overlapping if never quite coinciding. This configuration generated interests among Protestants, Catholics and the British state which reproduced the broad contours of the social and symbolic distinctions through the radical social, institutional and constitutional changes of the eighteenth, nineteenth and twentieth centuries, and led to endemic conflict between the groups so constituted. In this paper, I focus on the period I know best, late 19th century to present, and within this on the contemporary phase of conflict and settlement, 1969-present.   Conflict between Protestants and Catholics was persistent from the late 19th to the end of twentieth century. It varied in intensity and in institutional and organisational form. There were periods of more or less extreme violence (actual or threatened) from 1912-22, and 1969-94, with intermittent violent episodes throughout. As actors attempted to secure their interests, they entrenched symbolic and social boundaries, while they also came to define their interests in terms of these distinctions. It was a tightly structured conflict, with mutually reproducing feedback between symbolic distinction, social organisation and power relations, giving the conflict an intractable quality. Within this pattern I will argue that religion played a role in making conflict more meaningful, more intense, more totalising. The 1998 settlement, which signalled an end to violence and a more pervasive relaxing of conflict and beginning of a new political order, could have left symbolic and social boundaries intact. It didn’t. Instead it saw a remaking of the symbolic packages, with different roles for religion. …

I want briefly to justify my focus in this paper on religion and conflict rather than religion and violence.  Religion is not an important factor in explaining why some individuals opted for violent means while others didn’t, nor in explaining when they so opted, nor in explaining what they did when they so opted: neither the actors nor the targets of violence were overtly or primarily religious. Joining the IRA after 1969 was a strategic choice in a situation perceived as deeply unjust in which there was neither exit nor voice. Law abiding Catholic citizens shared the same experiences and many of the same aims as republicans and understood their motivations. Rev. James McEvoy, Professor of Scholastic Philosophy in Queens University Belfast, pointed out that both the Catholic church and republican paramilitaries believed that Catholics in Northern Ireland faced a stark alternative – to accept a measure of injustice and live with that, or to revolt – they simply made different choices. The IRA itself was informed by a political rather than primarily religious ideology, and its stated aims were constitutional rather than religious or cultural. Loyalists, for their part, judged that effective repression of the republican threat to the union required informal paramilitary as well as state security response.  Unionists and Protestants shared the aim but rejected the paramilitary means: indeed many joined and almost all supported the state security forces in this task. … The most interesting question is not why, in this situation, a minority of people resorted to violence, but why the mass of the population was so polarised in its politics and perspectives, and how religion contributed to this.

Disentangling the role of religion in conflict

If, in the contemporary period, religion plays one part in conflict, it does not play the determining part. The same religious oppositions coexist with quite different patterns of social relations and political organisation in, for example, the Irish state or in some areas of France. Religious opposition is at most one strand of causal patterning, where institutionalised power differentials, inequalities, ethnic differences and nationalist aims also play a part. …

There is a strong tendency in the contemporary literature not even to attempt such a task. Contemporary comparative political science takes a broad concept of ethnicity, which bundles together ethnicity narrowly conceived as people-hood, as a descent defined group with a distinctive origin myth, and religion, race, caste, region and sometimes even class. In the presently dominant interpretation of the Northern Ireland conflict, it fits neatly into this conceptualisation, with religion understood as an ‘ethnic marker’. This, in my view, is a mistake, cutting short analysis before adequate explanations are reached.

First, to take a broad and inclusive notion of ethnicity is to focus on boundaries rather than on the meaning of those boundaries (religious, or racial, or narrowly ethnic). This dissociation of boundary from content is, I would argue, a wrong turn in the social sciences. Symbolic boundaries and symbolic content are intrinsically interrelated. Barth who insisted that ethnic groups had no homogenous or unique set of cultural practices or beliefs and refused to reduce ethnicity to ‘cultural stuff’, also described the ‘basic value orientations: standards of morality and excellence’ which defined boundaries.  In Northern Ireland, whether (and which) actors define themselves in terms of theological beliefs and religious practices, or in terms of ethnic descent groups, in terms of nationality or of key moral-political values affects not only the persistence of difference and the prospect of eventual integration (via immediate conversion, or long-term intermarriage, or gradual convergence) but also the precise place of boundaries, those marginals who are included and those excluded.

Second, once one acknowledges the relevance of content to boundaries, one would expect conflicts informed by religious distinctions to have a distinctive symbolic logic different from other forms of conflict. This of course leaves open how such conflicts are patterned, how symbolic distinctions do or don’t translate into patterns of behavior, a question that becomes the trickier as we look at real conflicts which have ethnic/religious/national/class/political/civilisational components in different degrees.

Third, the dominant view tends to slip between a broad, inclusive (and therefore empty) concept of ethnicity – where it makes good sense to ask if ethnicity matters for conflict – and a narrow concept of ethnicity as descent, lineage, quasi-kin consciousness which, it is believed, trumps all other categories. This slippage is justified in terms of a socio- psychological or socio-biological explanation of why broadly-conceived-ethnicity has these narrowly-conceived-ethnic-characteristics. This sort of explanation not only elides those cases where it doesn’t have such characteristics but also, in my view, fails adequately to describe or explain those cases where it does.

However, to start to pull apart the role of religion in a multiply constituted conflict like that in Northern Ireland, is exceeding difficult. On all objective indicators, divisions in Northern Ireland are deep: there are comparatively strong correlations between religion of origin, party-political support, constitutional preference, national identification and a set of political views about security, law and equality of treatment.  When one makes finer tuned distinctions within the broad categories of Protestant/Catholic, unionist/nationalist, British/Irish there are no evident correlations of type of religion with type of politics. …

Qualitative and interactional studies show a radical variety of ways of combining positions on religious, political, ethnic, national and moral dimensions, and of giving meaning to these categories. Multiply constituted conflicts invite symbolic tradeoffs where blurring on one boundary (eg a Protestant with an Irish identity) is compensated for by insistence on another (eg that same Protestant’s strong unionism). In everyday discussions there are consistent shifts in emphasis and slippage between categories of nationality, religion, and ethnicity. Clustering exists but it also changes over time: Catholic unionists are interesting in this regard, but the better researched are Protestant evangelicals who cluster into two, relatively balanced, groups of, on the one hand, liberals and radicals, and, on the other, conservatives, and the political positions of each have changed very significantly in the last decade.

In light of these well-known facts, some have argued that religion does not matter for conflict, that it is essentially an ethno-national conflict. However very similar arguments – relying on slippage, symbolic trade-offs, everyday cultural variation, and the lack of correlation between varieties of Britishness, Irishness and Northern Irishness, ethnic-self-definitions and political views – can be used to argue that ethnicity (understood in a substantive cultural sense) does not matter for conflict, that national political division is imposed on a cultural plurality and that scholarship inappropriately echoes this imposition of binary categories on a plural cultural reality. …

… Once one opens this path, the prospect of showing how religion contributes to conflict is clear. First, however, it is useful to show why a direct analysis of the material and political incentives to bloc formation is insufficient to explain the continuation of conflict.

That the political system in the period of unionist rule (1921-72) gave incentives for bloc formation, benefitting the Protestant population in terms of division of the spoils and access to influence, is not in any doubt.  It also gave Catholics incentives to associate together in defence, and the church was their only well-resourced organisation. Significant though lesser benefits for bloc formation continued through the period of British direct rule, diminishing more rapidly post 1985.  Today the benefits are slight: a bias in the Assembly voting system (key votes can be passed with a bare majority of self-designated nationalists and self-designated unionists and an overall majority) which may give a slight incentive to voters to vote for the unionist and nationalist blocs. In addition, the desire of the British and Irish governments to keep the major parties in agreement gives those parties considerable bargaining power and capacity to distribute resources to their supporters. Can bloc formation and behaviour be explained solely by the actual or anticipated material benefit?  One test is what happens when the benefits decrease. The result, in the 2000s when benefits and expectations of benefit have definitively decreased, is that the political cleavage is even clearer and more defined than before, even while political conflict is less intense.

If, however, we need to look at the socio-cultural patterning of conflict, we need to look at cultural trajectories, not simply empirically observable (synchronic) cultural plurality. In Northern Ireland, as elsewhere, the categories of division are only one set of categories used in daily life, and oppositional interpretations of them are only one set of available repertoires. Other things equal, one would expect experimentation with new ideas, a blurring of symbolic boundaries, gradually over time the development of a range of different religious, political, national, historical perspectives and a range of different ways of combining them, a move away from oppositional perspectives. Instead, despite consistent experimentation and boundary blurring which is obvious from a micro-interactional perspective, oppositional perspectives have persistently been reaffirmed whenever collective decisions are necessary. For example, in a whole series of small and large decisions over the last forty years, ordinary people began by blurring boundaries, experimenting with new ideas, moving towards compromise, then wavered, then opted for opposition and division. No obvious material interests were involved, nor was this a following of leaders: the Northern Irish are notorious for rejecting their one-time leaders. … In what follows, I sketch some very general mechanisms which explain this type of reaction, and emphasise the role of religion. To test the value of these schema in explaining these particular decisions would require a longer empirical analysis.

Multiplex symbolic boundaries and the tendency to opposition 

Given the plurality of dimensions or categorisations by which distinctions are made – Protestant/Catholic, unionist/nationalist, British/Irish, even settler/native – the plurality of repertoires within the religious, national-political, ethno-national and historico-colonial fields, and the constant experimentation with new views which goes on in Northern Ireland as elsewhere, what leads towards an emphasis on opposition? I suggest that there is a practical-cognitive mechanism which provides a weak tendency towards opposition. …

This is neither a structuralist argument nor a Weberian one. It is not structuralist in that the binary oppositions are empirical, historical – rooted in the fact that the same or closely linked groups of people in each generation were making and remaking political, religious and historical narratives; the experience of them in practical life varies between groups, as does the internalisation of them; the tendency to internalise is weak rather than strong, and can be counteracted in predictable ways…

The forms of religion which evolved in Northern Ireland have been on the extreme ends of the reformation division: Calvinism or low church, evangelically oriented Anglicanism; Roman Catholicism with little anti-clericalism and no routine challenge to hierarchical authority. Protestants tended to see themselves as rational, progressive, modern, as opposed to Catholic superstition and backwardness. Within this, brands of Protestantism emphasised old testament chosen-people themes, and the covenantal tradition. The parallels with the dominant brand of unionism are striking: unionism sees nationalism as superstitious, traditionalist, backward, and itself as global, progressive, modern, rational. … Akenson shows how the religious sense of chosen people was historically intertwined with the sense of being a settler, and how this tends to make recessive those aspects of the religion that could criticise inequality and injustice. …

Catholics, on the other hand, saw themselves in the one true church with the one truth. In parallel, the nationalist tradition has a singular, concentred self-understanding with a coincidence of ethnic background, religious faith and national belonging. Particular brands of nationalism emphasise a messianic vision of history, with golden age, fall and redemption through suffering. The concepts of justice and equality used to criticise the Northern state were often informed by Catholic social thinking, and sometimes by a more generalised and simple ‘basic’ Christianity: the Campaign for Social Justice (CSJ) policy statement in 1964 concludes: ‘Our aim is, we think, both basic and Christian but, nevertheless, has not been realised here for hundreds of years, namely equality for all’. It is highly significant that the same concepts (for Protestants, rationality, modernity, loyalty) are used to distinguish different classes and sub-groups within the community as are used to distinguish the communities, thus reinforcing overall communal opposition.

Why this seeming gravitational pull to opposition, even while there are so many nonoppositional strands in the (contemporary) Christian religions? Steve Bruce explains it in terms of the need for a clear sense of belonging which is given (for Protestants) in evangelical Protestantism and the sense of being a chosen people. But the sense of belonging (and the felt need for such a sense) varies very dramatically. The extremes within Northern Ireland have shown little sense of solidarity or belonging beyond their immediate group: republicans, in particular, have little solidarity with or affection for their fellow nationals. I have suggested a simpler cognitive explanation: logical coherence is found in the oppositional interpretations of religion, politics, ethnicity, history, not in the inclusive interpretations: there is a clear coherent oppositional ‘package’, whereas breaking with opposition on any one dimension does not imply a particular way to break with it on others. …

Of course these are socialised rather than intellectualised understandings, a practical sense of coherence, not a coherently articulated ideology. The embodied practical concepts of rationality and modernity allow a merging of religious and other distinctions. The young modern liberal Protestant girl filmed by Desmond Bell in the late 1980s goes into a Catholic church and is visibly shocked and displeased by ‘all the statues’. Meanwhile Catholics are shocked by the ‘polish’ of Protestants in their religious practices as if formality and showy-ness is all, and this spills over into judgement of Protestant dress and make-up. Such embodied religious differences, can exist without being generalised to politics or wider social attitudes. In Northern Ireland, however, they are so generalised. Harris describes how there is a Protestant and Catholic position on just about everything, including international relations. … Work places were largely informally segregated until the last decade. There was strong opposition to exogamy, and where it (fairly frequently) took place, mixed marriage couples moved firmly into one community and all but severed linkages with the other. This had the following consequences:

(a) social capital was within each religious group. With this went reliance and trust: who one was likely to believe in a situation of contestation was firmly determined by religion.

(b) communication patterns were within each group. This was of particular importance as violence began and as information flows became specific to each side. It is well attested that rumours play a major role as triggers and precursors to violence, in particular to riots. The prevalence of single-religion organisations and meeting places in Northern Ireland facilitates two sets of rumour-networks. …

(c) The social basis for mobilisation was given by these working, socialisation and communication patterns and this affected the form of mobilisation. For unionists, the interlocking networks of unionism and the Orange Order allowed province-wide mobilisation which marginalized modernisers within the Protestant community. For nationalists, it meant that mobilisation took place by leafleting areas with GAA halls, parish halls and de facto excluding Protestants… the centrality of religion to social division allows that division to ‘penetrate everyday life’, and permits the clergy to play an important role in socio-political organisation. Taken by itself, religious organisation of social division does not necessarily affect the political goals of the mobilised population. It is, however, likely to highlight the religious dimensions of political opposition: the funerals for the hunger strikers were mass religious rituals with immediate political connotations: terrible suffering and grief, hope of resurrection. Once interrelated with the cognitively-based tendency to generalise religiously-informed oppositions, however, it has greater effects. It gives immediate social confirmation to this fusion of religious-political-social values and embeds it in group-belonging. It separates ‘people like us’ from those who breach the most basic norms of rationality and morality…

Institutional confirmation  

Religious division has also been formally and institutionally sedimented. There is an extensive literature showing how Protestantism, Protestant values and Protestant habitus came to permeate the British state and nation.  The devolved state in Northern Ireland was more explicitly Protestant in a Calvinist vein, with enforced sabbatarianism, and immediate and easy access and influence of the Protestant clergy on decisionmaking. Employment in the public sector (as in private firms) favoured Protestants, and the reasons for this merit attention: Barritt and Carter report Protestant views that Catholics were ‘not to be trusted‘, they were ‘shifty, idle and unreliable, fit only to be employed on unskilled work‘… Protestants might not ‘work well under Catholic supervision’. In the public sector, Catholics were not considered good candidates for promotion because in tough cases they would obey their church rather than their superior… Later again it was said that Catholics, and particularly republicans, could not be employed in industries of strategic importance because they would leak secrets. …continued underrepresentation of Catholics in the civil service and in public bodies well into the 1980s, …

As state institutions slowly changed, they gave differential incentives to different subgroups of unionists and nationalists to differentiate politics from culture, ethnicity and religion, or to re-connect it. …

Later ‘structural unionists’ who differentiated unionist politics from religious belief and ethnic belonging and argued for fuller integration into a changing British state, were wrong-footed by the increasingly bi-communal and bi-national policies and institutions set in place from 1985. In the 2000s, the unionist public – recognising that a bi-communal politics was now irreversible – left the UUP, plumping decisively for the communalist, religiously influenced DUP, to fight their corner within new institutions which they now also plumped for.

Different worlds. 

This intersection of symbolism, social practice and institutions created two separate worlds, with different – opposed – values and assumptions, which intersected only occasionally and at risk of violence. Conflict became more intense in the 1960s as the state increasingly penetrated the Catholic social world, and as Catholics increasingly asserted their position in the public (Protestant) world. …

In Catholic theology, God is present in the Communion, and the clergy play a mediating role between individual and God: in Protestant theology, the individual has a direct relationship with God who is not closer to the believer in church than outside. Church-going thus has quite different religio-social meanings in each community. For Protestants, it is a display of respect to God and to the religious community; it is a formal occasion of display, shown in clothing, stance, seriousness of demeanour, control of children in the family group. In some families, if the car is not washed or the clothes not properly ironed, church attendance has to wait. For Catholics on the other hand, the important thing is to attend, whatever the appearance. Moreover there is a radical asymmetry in church organisation and practice. In each small town or city neighbourhood, there are multiple Protestant churches each with a single long Sunday morning service. The congregation arrives at each church at a defined time, whole families together. Catholics, in contrast, have one large local church which holds multiple morning services, so there are always people coming and going, usually walking, and different family members may attend different services, finding seats whereever available. Some arrive late and leave early.

These differences cohere well with the different class and authority profiles of Catholics and Protestants in Northern Ireland. Protestants often display their position in the community in and through church attendance; the best clothes, the dignified and upright stance appropriate to people of authority and substance. Church is also an occasion to show one’s own respect for authority – the authority of the state, of the security forces, of the monarchy, symbols of which may be displayed in the form of flags or plaques.  Mass-going plays a role in community bonding for Catholics. It does not, however, have the same status resonances as it does for Protestants, not least because social position has not been a source of pride for most Catholics, and the churches never display symbols of the state. Behavior in church varies accordingly. In Protestant churches, children are kept with their families, under strict control; in Catholic churches, children are omnipresent, babies crying, toddlers climbing.

Church-going thus expresses and reproduces much more than simply religious difference. It is of crucial importance in forming perceptions of difference-as-opposition, since it is where Catholics and Protestants were – and are – seen in large numbers, as communities rather than as individuals. In the past, part of what Catholics disliked about unionist rule was being governed by the sort of people they saw going to church on Sunday, dark, polished, formal, humourless, and being made fit into a society in their image. Part of what Protestants feared was being governed by the sort of people they saw walking to church, as if randomly, at all hours, without clear order or formality, in all sorts of clothes, in great numbers, or later pouring out of church, or later again going to the Gaelic football match (not much distinguished from church-going in terms of clothing or style but even more threatening because of the numbers, predominantly male attendance and lack of formal authority).

Secularisation is important less because it makes religious values unimportant to individuals – Mitchell argues that they outlast the ending of religious practice by more than a generation – than because it removes religious practice from the public eye and it becomes easier to privatise and segment its values.

Predictions:  

If – as sketched above – the generalisation of oppositional religious concepts and values through the political and social sphere is a product of symbolic and social mechanisms, certain predictions follow.

1. Argument and evidence alone will be insufficient to break the cognitive frame. The very meanings of terms like ‘rationality’, ‘progress’, ‘modernity’ are communally-loaded. [An example of this is the capacity of even the most intellectually able and sophisticated of unionists and nationalists to describe their respective states in utterly opposing ways. Until very recently, unionists perceived the Irish state, in David Trimble’s words, to be ‘sectarian, mono-ethnic and mono-cultural’, economically weak and globally inconsequential compared to the British state. For nationalists like Garret FitzGerald, on the other hand, the British state is seen as traditionalist, conservative and class-bound, incapable of fully participating in the European and global economy; the Irish state is a small, independent open economy and polity with strong guarantees of human rights, providing the sort of institutional context and social capital that allows full use to be made of its resources.]

2. Secularisation alone will not break the pattern, since the oppositional concepts are already embodied in politics, notions of identity, views of history, thus creating a continued openness to religion. …

3. Since the ‘practical-cognitive-coherence’ mechanism depends in turn on other social mechanisms, it may routinely be set aside where these mechanisms don’t exist, for example where individuals’ social practices in one field involve a quite different set of concepts and values than in others. …

4. Change is more likely to be provoked by a breach of institutional and social networks than directly by a challenge to the symbolic equivalences. …

5. Where change is radical, there is likely to be a tendency to look for new coherences, and to embed these in new social networks. …

Change.  

Since 1998, quite radical institutional and social changes have given widespread incentives to change/breach the cognitive equivalences noted above. The ways this is being done casts light on the specific role of religion in the past and present.

1. The political system and power relations have been radically changed with the following as the key events: 1985 (Anglo-Irish Agreement), 1989 (Fair Employment Act) 1998 (Good Friday Agreement), 1999-2003 (reform of policing). Since 1998 this has begun to percolate down to everyday experience, for example in republican participation at all levels of decision making and in a visible nationalist presence in every aspect of the public sphere.

2. Social networks have been diffused. This has occurred in three ways. First, by increased funding for cross-community venues and integrated schooling, although such cross-networking remains relatively small-scale (only 4% of students attended integrated schools in 2002). Secondly… fair employment legislation has stimulated more widespread change in work relations. Third… general cultural trends and consumerism (from foreign holidays to non-place shopping malls to home cinema) have led to greater individualisation, a lesser reliance on social capital, although separate religio-leisure networks remain.

3. The older social worlds are challenged and increasingly problematised. For Protestants, the new political order disconfirms their previous expectations and rules out their habitual ways of acting: they can no longer march where they want, their world (and their control of it) has changed. For Catholics, once isolated ‘Catholic’ and ‘republican’ worlds are increasingly integrated into the public world: for them, their beliefs (in the need for public equality) are confirmed but their practices are changed.

These changes give individuals incentives to rethink and reframe their worlds, to cast adrift older assumptions and conceptual equivalences, to pull apart the cultural matrix or to change it altogether. …

1. One-time Protestant fundamentalist extremists have changed much more quickly than was expected, as is seen by the DUP’s cohabitation with Sinn Féin in the new executive. Recent research shows phases of this change: first a clear sense of political defeat, a prioritisation of religious values over political and a ‘purifying’ of religion of its failed political resonance; second a changing of political assumptions – which no longer matter so much to them; third, a finding of new religious opportunities as well as economic ones in the new cross-border structures or in moral activism (‘saving Ulster from sodomy’) within the newly egalitarian Northern Ireland.

2. One-time Protestant extremists who have no explicit religious belief find it harder to orient themselves to the new situation. They fear being swallowed up by Catholic, nationalist, republican expansion The new opportunities in Northern Ireland, however, require engagement with erst-while opponents (republicans) with clear public projects by whom they feel easily outmanoevred.  Some reassert the old values in increasingly desperate protest.

3. Some attempt to adapt, moderate, come to a strategic compromise. But this too raises moral issues which are not easy to resolve: if they can compromise now, what of the principles that they fought for in the past? Were they not important? …

Republican electoral success and international favour has been gained by a public silencing of the questions. It remains as yet unclear if the older oppositional mind-sets are being worn away by the practice of peace and compromise…

4. a helter-skelter of change, with initial movement leading to new levels of cognitive dissonance and further change. This group typically refound aspects of their familial and religious traditions which allowed them to legitimate these changes, and to reinvent a continuity with their personal and wider historical past. Many were in mixed marriages. Even in non-conflictual societies, mixed marriage respondents often narrate a refinding of more open aspects of their religious tradition, using ecumenical networks as support. …

when religiously informed conflict ends, the individuals who most quickly come to terms with both conflict and settlement are those who re-find aspects of the religious tradition by which to reinterpret it.

Conclusions:  

I have argued that religion has played a key symbolic role in the Northern Ireland conflict, where opposition is generalised between the religious, political, ethnic, normative, historical spheres. This is not primarily driven by the actions of clerics, or the events in particular churches, or even by changing religious orthodoxies. The generalisation was made likely by the historical development of the traditions, and the highlighting of the same or very similar conceptual oppositions within each. The process of generalisation is in turn underpinned by social networks and communication patterns which prevent the ‘normal’ change and challenge of key sets of beliefs. In the past it was sedimented by state and institutional norms, although as these norms and related practices have changed, so too have the incentives for changing the oppositional understandings and identities in Northern Ireland. The religious values and concepts involved are sometimes explicit, sometimes already secularised, religion-ising values in the political tradition. They are – perhaps paradoxically – the more changeable when they are reconnected to religious tradition than when they are embedded in secularised ethno-political particularity.

Religion, I have suggested, makes conflict much more than a conflict about constitutional claims or political policies. It makes it into a conflict that touches on, resonates with and is informed by whole ways of life, with their constitutive assumptions and values. It makes it an existential conflict. … not all religious conflicts are ethnic, in the sense of being between historically defined and distinctive ‘peoples’. Nor are all ethnic conflicts are about ways of life. Some are about getting ‘our men’ into power, or grabbing resources for ‘us’, with the ‘we’ defined instrumentally, whichever way gets most ‘pork’. Nor are all national conflicts about ways of life: many are about territory and resources. To use Sharma’s categories, ethnic and national conflicts may be about which group rules, rather than about the rules themselves. When they are informed by religion, if this case can be generalised, they become about the content of those rules. The recent history of Northern Ireland also makes clear that while religiously informed conflicts may be fought to protect or to gain recognition for ways of life and identities, the fighting of them, and the process of institutional change involved in settlement, itself changes those ways of life and identities.


Debating the Little Ice Age

Here is a paper, Debating the Little Ice Age | Profs Morgan Kelly & Cormac Ó Gráda (@EconomicsUCD, @UCD_Research). Excerpts, underlines, italicization, et al. are on our own.

ABSTRACT:  This paper replies to commentaries by Sam White and by Ulf Büntgen and Lena Hellmann on ourThe Waning of the Little Ice Age: Climate Change in Early Modern Europe’.  White and Büntgen/Hellmann seek to prove that Europe experienced the kind of sustained falls in temperature between the fifteenth and nineteenth centuries that can justify the notion of a Little Ice Age. Neither of them adequately addresses the cogency of the anecdotal or statistical evidence presented in our article, especially with regard to the spurious peaks and troughs created by the smoothing of temperature series — the so-called Slutsky Effect.

In two related articles, “The Waning of the Little Ice Age” and “Change Points and Temporal Dependence in Annual Weather Reconstructions: Did Europe Experience a Little Ice Age?” we examined, respectively, the documentary and statistical evidence for a Little Ice Age (LIA) in Europe, finding little hard evidence to support the widely held belief that Europe experienced sustained falls in temperature between the fifteenth and nineteenth centuries. …

THE LITTLE ICE AGE ACCORDING TO WHITE      … the period between roughly 1400 and 1900, apart from a mild phase in the mid-1700s, was distinctly cooler on average than the centuries before or after”. ….  Figure 1…shows the probabilities of a good year, conditional on the previous year being good, and of a bad year, conditional on the previous year being bad. The eleventh and twentieth centuries at either end stand out from the rest. That the twentieth century has a higher probability of good winters and successive good winters than do earlier centuries is consistent with global warming.  In the centuries between the two, the probability of good or bad winters appears fairly constant, as does the probability of a bad winter being followed by a bad one. The probability of good winters following good winters is also fairly constant, except for that of the seventeenth century, which is nearly 20 percent higher than those of the surrounding centuries, despite being in the depth of the supposed LIA.  Note, however, that the credible intervals (or Bayesian confidence intervals) overlap with other periods. For summers, the probability of a good summer, or of successive good or bad summers, is fairly constant. The probability of bad summers is slightly lower in the twelfth and thirteenth centuries, and higher in the nineteenth century, but, again, the credible intervals overlap with other centuries. The point is by no means to deny the possibility of occasional clusters of bad years; in fact, the statistical article drew attention to the 1810s, the 1590s, and the 1690s, in particular.  …

Unfortunately, neither the tone nor intellectual level of White’s criticisms improvesthereafter.  After dubbing narratives linked to the LIA, such as the demise of the Norse Greenland colonies and English vineyards, “red herrings,” White devotes nearly half of his commentary to defending interpretations of them that are consistent with an LIA.  We view these narratives, mostly due to Lamb, as circumstantial evidence, not as “proofs” of the LIA. …

Norsemen and Others      In the documentary article, we argued that the paucity of hard data leaves room for several plausible but still nonfalsifiable explanations for the demise of Greenland’s Norse colonies. In addition to the LIA, we discussed six others that could account for the flimsy evidence available. The literature on the topic continues to accumulate.  Since our article went to press, a new study by Arneborg, Lynnerup, and Heinemeier also denies that climate cooling forced the hand of the colonists.  Their skeletal analysis indicates that the last colonists were neither stunted nor diseased.  “Perhaps,” summarizes Linnerup, “they were just sick and tired of living at the ends of the earth and having almost nothing but seals to eat.” Both seals and a change in climate feature in another article of 2012, this one by Dugmore et al., in which several factors that we also mentioned play a role: (1) increasing conflict with indigenous inhabitants, whom the colonists called “Skraelings” (“now the Skraelings have desolated the whole western settlement,” as one mid-fourteenth-century source reported); (2) the marginalization of Greenland when Norway began to shift its focus to the south and east; (3) the declining importance of the trade in walrus tusks; and (4) the tiny size of the settlements (a single Inuit raid in 1379 A.D. may have deprived the colony of 5 percent of its hunters).  Regular commercial contacts with Norway virtually ceased decades before the collapse of the eastern colony; the smaller western colony seems to have disappeared before any evident cooling in the supporting meteorological data.  Our basic point—which White obfuscates—remains that, apart from any climatic considerations, the settlement’s existence was precarious.  As Dugmore, Keller, and McGovern (whom we are accused of misquoting) concluded in their 2007 study, “One widely held view is that the impact of climate change, the failure of their pastoral subsistence base, and an inability to adapt were key factors in the end of Norse settlement in Greenland.  Alternatively, as we argue here, unfavorable economic changes and falling populations might actually have been the key factors in increasing the settlements’ vulnerability.”  We could not agree more.

London’s Frost Fairs      White’s view of the frost fairs is contradictory. On the one hand, he concedes that “no serious scholar” considers the two dozen frost fairs on the river Thames between c. 1400 and 1814 as “proof” of an LIA. On the other, however, he cites them as evidence of cooling, since the data “appear to predict” the seventeenth-century peak implied by Northern Hemisphere proxy trends … White also skirts around our statistical point that frost fairs were much more likely during cold winters in the seventeenth and eighteenth centuries than during cold winters in the preceding or following centuries.

Evidence of years when the river Rhône and Lake Constanz froze adds to the confusion since it suggests different chronologies …  In the case of the Rhône, the fifteenth century was one of the mildest centuries of the second millennium, whereas the fourteenth century was the coldest. The number of Seegfrörne (lake freezings) on Lake Constance (Bodensee), however, peaked in the fifteenth and sixteenth centuries. Neither series registers the seventeenth-century peak in the number of freezings championed by White.

The ambiguities inherent in these comparisons echo broader ambiguities about the dating of the LIA, which White exacerbates by proposing three distinct definitions of the “Real LIA” (1400-1850, 1310s-1810s, and c. 1580-c. 1710).  The second and the third definitions are intended to capture the “human dimension” and the “human experience” of the LIA, respectively, but they serve only to allow the historian’s tail to wag the climatologist’s dog.  The false precision of these dates, grounded in historical events, confuses secular trends and extreme years.  White conflates the two—“LIA climate fluctuations brought clusters of extreme events” (White, 349)—but the events could easily have occurred without an LIA, as shown above.  …

Hunting in the Snow      … In terms of content and iconography, Bruegel was following a well-defined “book of hours” tradition, traceable back to the Middle Ages; “Hunters” was one of a series of six calendar illustrations commissioned by Antwerp merchant Nicolaes Jonghelinck in 1565.  Two of the other illustrations, far from suggesting an LIA, have been described as a “radiant expression of high spring” and an example of “the flat glowing scenery [that] is pure midsummer.”

… the fading interest in this genre after c. 1675 owed less to climate change than to fashion, as the public wearied of gloomy representations of winter.  The weather, as depicted in landscape painting during the Golden Age, owed more to “the stylistic requirements of the market” than to meteorological reality.  Paintings were accordingly biased toward dramatic or fine weather and away from the humdrum grey clouds most commonly found in Dutch skies, then and now.  The stock-in-trade of Hendrick Averkamp (1585-1634), who has become synonymous with the LIA, was joyful winter scenes, played out almost always “in calm and stable weather conditions with stratiform clouds.”….

Population and Agriculture      Turning from symptoms to consequences of the LIA, Lamb and his followers repeatedly claimed that the impact of the LIA was particularly severe in the colder, marginal areas of Europe. As temperatures dropped, “grain cultivation [in Iceland] had to be given up”; “farms in many [of Norway’s]upland districts stood empty for hundreds of years”; and even in Denmark, “visitors to a royal wedding in 1406 reported much uncultivated, sodden land,” lamenting that “wheat was grown nowhere.”  We addressed such claims indirectly through an analysis of population trends and agricultural yields.  The ramifications of cooling should have been evident in demographic trends, particularly in the marginal parts of Europe.  On the contrary, the “perfect storm of population pressures and rapid cooling” asserted by White did not prevent the populations of Scandinavia and Switzerland from increasing their share of the European total…  Similarly, the cooling associated with an LIA should have resulted in diminished cereal yields, especially in the case of the more cold-sensitive grains. We could find no such evidence in the most comprehensive inventory of cereal yields available.

Nor is White’s gambit of highlighting extreme years — 1621 when the Bosphorus froze, 1658 when a Swedish army marched across the sound, or 1709 when French wine burst in its bottles — convincing.  We could equally invoke the winter of 1941/42, when the extreme cold had important ramifications for the outcome of Word War II; that of 1947, when ice floes were seen off the East Anglian coast, and the Dover-Ostend ferry service was suspended due to pack ice off the Belgian coast; or the “big freeze” of 1963, when the sea froze six km out to sea from Dunkirk, and a car could be driven across the frozen Thames at Oxford. But what would such conditions prove?

England’s Vineyards      In this case, too, White contradicts himself. On the one hand, he declares that our discussion of the demise of wine production in late medieval England is “irrelevant,” with “no bearing” on climate cooling. On the other, however, he states that studies based on grape culture that point to “cooler summers in early modern Europe” are a “recurring element in descriptions of freezing LIA winters and offer a good indicator of their severity”

England’s retreat from winemaking, which was a key part of Lamb’s classic case half a century ago, is now part of the conventional wisdom on the LIA.  Our case—that wine production was always a marginal activity in England, that the quality of English wine was inferior, that the trade between England and western France entailed both regions to select their comparative advantage, and that, therefore, arguments invoking the LIA are redundant—stands.

Glaciers      White’s rebuttal of our short discussion of growth and shrinkage of glaciers is the most confusing and contradictory of all.  Rather than confront our evidence of stasis before the nineteenth century… he invokes Groves’ unhelpful chronology, which times the main advances as “dating to around 1320, 1380, 1580 to 1610, 1690 to 1700, in the 1770s, around 1820 and 1850, in the 1880s, 1920s and 1960.” The implication that cooling lasted well beyond 1850 should have alerted White to the possibility (as we noted) that higher winter precipitation brought by mild and humid winters may also have played a role, making the connection between temperature and glacier length hardly straightforward.

THE LITTLE ICE AGE ACCORDING TO BÜNTGEN AND HELLMANN      Our response to Büntgen and Hellmann is less involved because they do not address anything that we wrote. In fact, they barely refer to us, even less to our arguments, except occasionally to re-assert that we are wrong. Were their article an exam, we would be tempted to respond, “Answer the question asked.”

In the statistical paper, we show that the four main documentary reconstructions of European weather over the past centuries do not reveal the trends or breaks that we would expect from a European Little Ice Age. Instead, the temperature series resemble white noise–independent draws from a distribution with a fixed mean and variance. In order to dispute our findings, Büntgen and Hellmann need to do one of two things—(1) to prove that the series that we analyze, which have been constructed by leading European climatologists, many of whom have co-authored papers with Büntgen and Hellmann, are wrong or (2) that our statistical analysis, in particular the powerful martingale difference tests that form the analytical core of the statistical paper, is deficient. Büntgen and Hellmann attempt neither of these strategies. Instead, they present a number of studies that purport to show systematic drops in European temperature during the past few centuries. But there are two problems with most of these studies, both of which Büntgen and Hellman ignore: They are largely based on tree rings, and the data are smoothed.

Climatologists have gone to considerable effort to reconstruct documentary weather series for Europe rather than using tree rings because tree rings are not a reliable proxy for weather in most parts of Europe. Tree rings reflect weather only at the limits of a tree’s geographical range where it is under constant stress due to aridity or cold. In Europe, this fact limits their usefulness to high mountains or northern Scandinavia — hence, the importance of documentary evidence. … …

The second difficulty with Büntgen and Hellmann’s series arises from the standard climatological practice of smoothing data. In the statistical article, we demonstrate that smoothing a white-noise series… leads to the appearance of spurious cycles–a so-called Slutsky effect… Although random, at least before the twentieth century, each series appears to show episodes of unusual cold. The Central European series is particularly relevant to Büntgen and Hellmann; it has a particularly cold episode in the late sixteenth century and other cold spells during the late seventeenth and early nineteenth centuries. What makes this graph relevant is that… the most damning evidence against us is the PAGES 2k Consortium reconstruction of European temperature.

However, this reconstruction is based on the standard Central European reconstruction that we analyze in the statistical paper and graph-smoothed… with additional tree-ring series from the Pyrenees, Alps, Balkans, and Scandinavia. The LIA episodes of deep cold in the PAGES 2k construction correspond to the spurious dips in our Central European series…

Once again, we emphasize that although the hazards of unthinkingly smoothing weather series is a central theme of our work on the LIA, Büntgen and Hellmann do not mention it once. Instead, they attempt to refute our findings with what is, in effect, a smoothed version of one of the main series that we analyze and show to be unchanged across the supposed European LIA.


Ireland Vol.15 (Celtic Tiger roars again – but not for the poor)

Here is an article, Celtic Tiger roars again – but not for the poor (7 October 2004) | @achrisafis @guardian. Italicization, underlines, et al. are on our own.

Darren Dent surveyed the concrete walkways of Stella Gardens, the low-rise Dublin estate…

Stella Gardens is on the edge of Dublin 4, the capital’s best postcode and the heart of Ireland’s economic miracle. Here the Celtic Tiger boom of the 90s roared its loudest and Dublin’s newly rich stepped into the satin slippers of the old British colonial masters, taking over redbrick villas now worth millions.

A tiny cottage costs at least €300,000 (£210,000), coffee costs the same as New York and fast food is among the most expensive in the world at €6.50 for a burger at a greasy spoon.

“All this wealth is sitting in one corner and we are sitting in the other,” Mr Dent said of the boom which transformed the country over the past decade. “We feel excluded, we’re not part of this great rich image.

Just as Ireland’s economic glory days appeared to be levelling out, a leading economist predicted the dawn of a new “golden period” this week, dubbed Celtic Tiger II: The Sequel.

Ireland, once one of the poorest countries in Europe, could become one of the richest in the EU, according to Dan McLaughlin, the chief economist at the Bank of Ireland. He said employment would rise by 50,000 a year and Ireland would have to lure workers from the EU’s latest members in eastern Europe.

This second round of economic expansion would create huge budget surpluses for Ireland. Businesses would continue to flood in: Google opened its first headquarters outside the US in Dublin yesterday.

… According to the UN the Irish are the richest people in the world after Norwegians and Luxembourgers. Dublin – where house price rises have left many with no hope of owning a home – is one of the most expensive cities in Europe.

But the gap between rich and poor has grown so much that the UN said recently Ireland had the highest levels of inequality of all western countries except the US. In spite of its new-found prosperity, Ireland has the highest proportion of people at risk of poverty in the EU. Some single parent families survive on less than €150 a week. Many say they can’t pay for their children to go to the doctor when they are sick.

The elderly, disabled and young are particularly at risk, while immigrants who arrived with the boom often live in appalling conditions. A European report released last week said one in five Irish people was classed as poor: taking home less than 60% of the average wage. The OECD puts the poverty level at about 15%.

Inequality remains the great taboo in a young state with a recent memory of the injustices of colonialism. The church, anti-poverty campaigners and local councillors have criticised the government for underspending on welfare, health and education. Some say the authorities refuse to accept the facts about poverty while the hedonistic rich enjoy high-spending lifestyles.

The ongoing tribunals into Ireland’s culture of backhanders in the 80s have left many fearful of political greed and corruption.

Newspapers question why spending on social welfare is so low when the government has ploughed more than €250m into horse and greyhound racing over the past four years.

Father Seán Healy, the director of the Conference of Religious of Ireland Justice Commission, which issued a report on poverty this week, urged the government to raise its spending on social provisions, health and education, which currently falls below EU norms, and to offer free healthcare for every child.

He said the government was listening to him, despite the former finance minister, Charlie McCreevy, saying he was “spouting rubbish”. The government says it has measures in place to combat poverty.

Father Healy said: “The per capita income is one of the highest in Europe. But there is a realisation that some people are getting left behind.”

Daithí Doolan, a Sinn Féin councillor in Dublin, said people came to him after being evicted from their homes which were knocked down to make way apartment complexes.

Mr Dent, who counsels addicts from Stella Gardens, said: “I see the same people coming in with the same problems … In the poor areas, history is repeating itself.”


Ireland Vol.14 (WHAT WENT WRONG IN IRELAND?)

 

Here is a paper, WHAT WENT WRONG IN IRELAND? (PDF; May 1, 2009) | Patrick Honohan, Trinity College Dublin. Underlines, italicization, excerpts, et al. are on our own, not the author’s.

Abstract

With its fiscal, competitiveness and banking crisis, Ireland is among the most severely affected countries in the global crisis. Yet its sustained growth achievement for almost two decades has been widely admired. This note explains how and why Ireland has entered the recession so poorly positioned. Until about 2000, the growth had been on a secure export-led basis, underpinned by wage restraint. However, from about 2000 the character of the growth changed: a property price and construction bubble took hold. This boom sustained employment and output growth until 2007 despite a loss of wage competitiveness. The banks fuelled the boom, especially from 2003, exposing themselves both to funding and solvency pressures. Successive Governments had bought industrial peace (and at first wage restraint), with tax reductions, relying increasingly on volatile sources of revenue, thereby making the tax base increasingly vulnerable to a downturn. Among the triggers for the property bubble was the sharp fall in interest rates following euro membership: within the euro zone also the disciplines of the market which had traditionally served as warning signs of excess were muted. Lacking these prompts, Irish policymakers neglected the basics of public finance, wage policy and bank regulation.

WHAT WENT WRONG IN IRELAND?

1. Introduction and overview

During the 1990s, Ireland emerged from a lengthy period of economic stagnation marked by high unemployment, emigration, and crippling public debt despite high tax levels. From 1988 to 2007 real GDP expanded by 6 per cent per annum on average (reaching double digits on average during 1995-2000). Even more astonishing, the unemployment rate shrank from 16 per cent…in 1994 to 4 per cent in 2000 – essentially full employment for the first time in modern history. Non-agricultural employment jumped from 33 per cent of the population in 1993 to 41 per cent in 2000 and 46 per cent by 2007…

But, after almost two decades of rapid growth, Ireland’s economy has collapsed more severely than almost all others in the current economic downturn. Real GDP fell by over 2 per cent in 2008 and is expected to fall 8 per cent in 2009 and a further 3 per cent in 2010. The downturn in the real economy has been reflected in the sudden emergence of a twin crisis in the banking sector and in the public finances. These in turn have fed back negatively into credit availability and rising tax rates deepening the output loss.

What went wrong? …combines hubris formed during the years of solid growth (before about 2000), the unprecedented experience on inward migration and the demonstration effect of financial excess in neighbouring countries. EMU membership plays a subtle role in the story in the way in which it lulled policy makers into a false sense of security. At the same time, having the euro has equally protected Ireland from an even worse financial collapse today.

Overview

It was always to be expected that Ireland would be particularly exposure to a global downturn, considering the exceptionally large contribution of exports to GDP and its vertical integration of much of Ireland’s manufacturing sector into the global production chains of major multinational firms. These were characteristics which, when combined with the sustained growth in World Trade contributed to a sustained output boom for over 15 years. Now they had gone into reverse.

Moreover, by mid-2008, the Irish export sector had to cope with a sharp slide in the value of Sterling – the currency of neighboring Britain, still a major trading partner. Indeed, the sudden fall in sterling left even the domestic retail sector exposed as households crossed the border into Northern Ireland to take advantage of suddenly lower prices.

But the Irish crisis from 2007 on was not merely an aspect of international pressures. Ireland was relatively poorly positioned heading into the global recession for three distinct but related domestic reasons: a home-grown banking crisis, a trend loss in wage competitiveness that had been underway since 2000 and a tax structure whose yield was far too heavily dependent on a continuation of the boom.

Two distinct growth phases

To understand what went wrong it is essential to distinguish between two different growth phases. Up to 2000 there was the true “Celtic Tiger” period of exceptional export-led growth with moderate wage and price inflation and healthy public finances. This began back in the late 1980s when, after several false starts, Government finally tackled its over-indebtedness with tough spending restraint, and managed to negotiate a series of centralized social partnership agreements which seem to have bought wage rate moderation in return for income tax concessions. This confidence-restoring policy package, given a competitiveness boost by the successful devaluation of 1986, launched the economy on a belated convergence in living standards towards the highest in Europe. An expanded flow of European Union structural funds amounting to as much as 3 per cent of GDP also helped fund sufficient public infrastructure in those years. The historic pattern of net emigration was dramatically reversed.

By 2000, the convergence phase was over, but rapid growth continued in Ireland – though now the sources of growth shifted sharply. An unsustainable decade-long property price and construction boom, which began before that of the US and UK and went further than these both in price and quantity, had taken over from exports as the main driver of Irish growth. Initially prompted by the increased household formation (related to unprecedented levels of net immigration) and by the sharp fall in interest rates that accompanied the transition to EMU membership, the property boom was increasingly financed after 2003 with foreign borrowing by the banks.

At the same time, the negotiated wage-restraint-for-income-tax-concessions bargain continued to be renewed. Government could afford to offer these concessions because of the buoyant revenue from the construction boom and from corporate profits, on which they became increasingly reliant, insouciant of the increasing vulnerability of the tax base to a downturn. But the apparent restraint in negotiated base wages began to lose relevance as workers negotiated supplementary wage increases. Although international competitiveness began to be eroded, the effects were not yet felt in aggregate unemployment while the domestic boom continued.

Poorly positioned for the global crash

Thus, the international pressures on the Irish economy since early 2008 have been strongly exacerbated by the unwinding of the property price and construction boom, and by the tax collapse and uncompetitive wage structures it has left in its wake.

Real residential property prices peaked in late-2006 and a strong reversal set in both in prices and in activity. The collapse of the construction and property bubble, has brought banking difficulties in its wake. This would all have resulted in a recession even without the global crisis, though the banks would have been better placed to survive without exceptional intervention, and the government would have been able to take offsetting fiscal action had it not been for the collapse in construction-related tax revenues. …

2. Fiscal crisis

The fiscal crisis has been driven partly by an autonomous surge in the share of spending in GDP (after 2004), but more spectacularly by a remarkable collapse in tax revenues in 2008-9. While tax revenue has shrunk in many countries in the recent economic downturn, the revenue collapse in Ireland has been much more pronounced.

Much of the reason for the revenue collapse lies in the systematic shift over the past two decades away from stable and reliable sources such as personal income tax, VAT and excises and towards cyclically sensitive taxes. There has been more and more dependence on corporation tax, stamp duties and capital gains tax (in that order). These three saw their share in total tax revenues rise steadily from about 8 per cent in 1987 to 30 per cent in 2006 before falling to 27 per cent in 2007 and just 20 per cent as soon as the economy turned down in 2008.

Although corporation tax is charged at a very low rate (currently 12½ per cent), revenue from this source grew from little over 1 per cent of GDP in the late 1980s to almost 4 per cent a decade later. A large fraction of this has come from multinational corporations in financial and non-financial sectors. Indeed, Ireland became quite a location of choice for firms seeking to shelter sizable profits from higher tax rates elsewhere. The surge on corporation tax was due not only to the property boom of the 2000s, but benefited significantly from internationally-oriented manufacturing and services, and from the high profitability of the domestic private service sector. …

To an extent, the growing reliance on these “fair weather” taxes has been an almost automatic albeit unintended consequence of the combination of the Social Partnership process combined with an almost unbroken period of rapid growth. From 1987, the former process of triennial tripartite national pay agreements was resuscitated with a view to achieving economic recovery. In each negotiation, in order to obtain or cement agreement of the unions to moderate basic pay trends, Government offered policy concessions, generally including an explicit or implicit understanding that income tax would be reduced. These tax reductions did help to buy wage restraint in the 1980s and 1990s, but left the government accounts exposed to a downturn. The sustained output, profit and asset price boom which extended for two decades from 1988 – with only two brief hesitations in 1993 and 2001/2 – lulled policymakers into a false sense of security as to the sustainability of the revenues from cyclically sensitive taxes, and induced them to take advantage of the extra revenues by narrowing the base of the personal income tax and lowering rates. To be sure, lower tax rates were in the air of international policy discussions from the 1980s, and this thinking also influenced policymakers in Ireland, but Ireland brought them further than most. Thus, at pay rounds, Government negotiators could offer concessions in those taxes that are felt by the working person — especially income tax but also some expenditure taxes. …

In 2008, tax revenue fell by almost 14 per cent — but the percentage fall in the cyclically sensitive taxes was much larger, at 36 per cent. The differential falloff in revenue continued and even intensified into the first two months of 2009.

Had Ireland’s tax structure been less cyclically sensitive, the fall in revenue would have been much lower. Indeed, if cyclically sensitive taxes had been back at their 1987 share of total revenue, the fall in revenue in 2008 would have been much lower: 8 per cent instead of 14 per cent.

…the sudden collapse in taxation. …the way in which Government spending had a strong upward momentum. It doubled in real terms between 1995 and 2007 for a real growth rate of 6 per cent per annum. With GDP and GNP growing even faster, this made for a generally falling or stable ratio until 2003, but thereafter the ratio grew, especially as soon as this started to slow in 2007.

Actually, spending grew by over 11 per cent real in both 2007 and 2008, reflecting an unfortunate late relaxation of spending which has worsened the deficit in the crisis just when it began to matter.

It is clear, then, that a return to budgetary stability requires not only a tax adjustment but also a reining in and rollback of spending; such a policy has been announced by the Government in the supplementary budget of April 2009.

3. The property bubble and the banking crisis

Even if the lower real and nominal interest rates from 1998 meant that any given income could support the servicing of much higher loans, the three-fold increase in average real property prices from 1994 to 2006 was the highest boom in any advanced economy in recent times. Long before it peaked, it looked unsustainable to most commentary. Nevertheless, from 2003 on, banks continued to ease loan conditions such as maximum loan-to-value ratios. These continued to fall right through 2006 despite the increasingly evident vulnerability of the bubble. Competitive pressure on the leading banks to protect market share came especially from reckless expansion by one bank, Anglo-Irish (whose market share among Irish-controlled retail banks jumped from 3 per cent to 18 per cent in a decade, as it grew its total portfolio by an average of 36 per cent real). Foreign controlled banks, especially the local subsidiary of HBOS also contributed.

Bank regulation, although on the surface compliant with international standards, was complacent and permissive. Certainly it should have impeded the growth of Anglo-Irish bank. And it should have acted more vigorously to restrain the relaxation of lending standards: by 2006, fully two-thirds of loans to first time buyers had loan-to-value in excess of 90 per cent; one-third were getting 100 per cent loans. Regulatory stress tests were too timid (for example employing only a 20 per cent fall in house prices). …

Banks funded the surging loan demand by huge foreign borrowings. By early 2008, net foreign borrowing by Irish banks had jumped to over 60 per cent of GDP from 10 per cent in 2003. Irish-controlled banks, long active in the retail market in Northern Ireland and in Britain, were also vigorous lenders in these and other property markets in Europe and North America during these years.

More or less simultaneously with Britain and the US, real residential property prices in Ireland peaked in late 2006. Loan demand slowed and construction – which had employed over 13 per cent of the workforce – began to contract.

At first, the banks were relatively unconcerned, their share prices peaked in February 2007, but remained high through the remainder of that year. Although they had become highly dependent on property-related lending (which now accounted for over 60 per cent of their total lending, up from less than 40 per cent only four years before), the perception was that most household mortgages would continue to be serviced even if house prices fell back by 20-30 per cent. The growing international banking crisis cast doubt on such complacency, and especially after the rescue of Bear Stearns, the liquidity of Anglo Irish bank came under repeated pressure. After the collapse of Lehman Brothers in mid-September 2008, Anglo was unable to secure funding and effectively failed, requiring a government rescue.

Fearing a contagious reaction on confidence in the other banks, the authorities decided not to put Anglo into a government-controlled winding-up, but instead, extended a systemwide bank guarantee on, and with effect from end-September 2008.

The prospective budgetary cost if this guarantee (should it have to be called), together with the dramatic collapse in tax revenue which was becoming increasingly evident, began to put upward pressure on the secondary market yields of Irish Government securities. The spread over German Federal Government bonds at 10 years maturity jumped from about 30 basis points in September reaching 284 basis points in March 2009 before falling back.

Although all of the banks are currently reporting a healthy capital position, bolstered in the case of the two biggest ones by the Government’s injection in the form of preference shares of a total of €7 billion (or over 2 per cent of their aggregate balance sheet), there is a large discrepancy between these reported figures and the market’s assessment of the true value of equity shares in the banks, considering the likely scale of future loan losses beyond those currently acknowledged by the banks. The banks’ share prices have fallen to as low as 1 per cent of their peak value of just two years ago. …

The Government announced in April 2009 that a National Asset Management Agency would be created to acquire the development property portfolio of the banks at a written-down value. The book value of the loans to be purchased was put at €80-90 billion, or about 50 per cent of GDP. If (as seemed likely) the valuation process for the loans resulted in write-downs bringing capital below regulatory levels, the Government will inject common equity, likely taking a substantial majority stake in the banks, though they have indicated reluctance to become outright owners,

4. Loss of wage competitiveness

From 1986 to 2000, wage restraint, generally attributed in part to the effect of the centralized pay negotiations, but owing something also to the high initial level of unemployment and the dampening impact of immigration (econometric work is inconclusive on these points), helped generate and sustain an era of full employment.

But after 2000, wage competitiveness deteriorated. By 2008, hourly wage rates had raced ahead of those in competitor counties, when measured in a common currency, by as much as 36 per cent.

Sooner or later, this loss of wage competitiveness was sure to affect employment expansion, but this was masked and delayed by the construction boom. Employment in the construction sector itself grew strongly from about 6-7 per cent of total employment in the early and mid-1990s to over 13 per cent in 2007. This is what sustained overall employment levels despite the loss of wage competitiveness.

An interesting feature of this pay process was that public sector workers were able to maintain a significant average wage premium relative to private sector workers during the Celtic Tiger period. …

5. The subtle role of EMU membership

Although growth remained strong for most of the first decade of Ireland’s membership of the eurozone, the analysis we have presented suggests that the seeds of the crisis were sown around the time the single currency began at the beginning of 1999. But was this a causal factor or a coincidence?

Elements of eurozone membership certainly contributed to the property boom, and to the deteriorating drift in wage competitiveness. Low interest rates and the removal of exchange rate risk facilitated the boom; the insensitivity of the exchange rate and of interest rates to domestic developments removed a traditional external constraint or at least warning sign. The enlargement of the EU also meant that the boom could continue longer than otherwise, fuelled as it was by strong inward migration.

Specifically, real interest rates 1998-2007 averaged minus 1 per cent, compared with over 7 per cent in the ERM period (even excluding the crisis of 1992-3) and 3¾ in the floating rate period between the two. The fall in nominal interest rates was even steeper. No wonder long-lived assets like residential property, capitalized at permanently lower discount factors, seemed and were appropriately valued more highly than before. …

Up to 2003, the property boom was financed without significant recourse to foreign borrowing, but after then the banks started to borrow heavily from abroad. This was an effortless undertaking thanks to the removal of currency risk and went essentially unnoticed by analysts, the focus of policy attention having shifted away entirely from balance of payments concerns. Unlike imbalances of the past, overborrowing did not lead to interest rate increases, again because currency risk had been altogether removed. Only when credit risk became an issue after September 2008 did the financial markets belatedly sound a warning sign.

… To be sure, all of these imbalances and misalignments could have happened outside of EMU – indeed, similar problems were experienced in other non-euro countries in the EU and the EEA. But the policy antennae had not been re-tuned in Ireland, and corrective action that could and should have been taken (fiscal policy, bank regulation, centralized wage negotiations) were neglected as a result. A costly error that will not be repeated in Ireland and should not be repeated elsewhere..

6. Concluding remarks: Lessons

The Celtic Tiger period represented a solid convergence of Ireland to the frontier. But it ended in 2000, to be succeeded by an old-fashioned property bubble. The lengthy period of success lulled policy makers into a false sense of security, not to say invulnerability. Captured by hubris, they neglected to ensure the basics: a robust tax system, a mechanism for ensuring wage rates—especially those in the public sector and as such under government control—did not get out of line internationally, and above all, they largely ignored the need for conventional prudential regulation of the main banks, allowing a rogue bank’s reckless expansionism to destabilize the whole sector. …

Macro-modellers simulating possible recovery paths have concluded that the future path of GDP in Ireland will be lower than had been projected before the crisis by at least 10 per cent, and that, while recovery could begin by 2011, the economy will not have return fully to its equilibrium growth path before 2015. It should thereafter be possible to maintain the fundamental conditions that allowed the Irish Economy to reach the high levels of output and productivity attained by 2000, including the quality of education, social and physical infrastructure. The main domestic threats to this (that is, apart from the risk of a more prolonged global recession, especially if accompanied by protectionist policies abroad), would be the danger that policy is insufficiently decisive in correcting the public finances and cleaning-up the banks, and that wage determination processes are insufficiently flexible to deliver the declines in real wages now needed at a time when prices are falling.

On these matters, government, employers and trade unions are currently feeling their way towards politically and socially acceptable solutions.


Ireland Vol.13 (Warning that house prices may fall by 80%)

Here is an article, Warning that house prices may fall by 80% (Jan 13, 2009) | Laura Slattery. Underlines, italicization, et al. are on our own.

HOUSING MARKET: IRELAND WILL see more demolition than construction of houses over the next decade, as the economy struggles to recover from the collapse of the housing market and the emergence of “zombie” banks, UCD economist Morgan Kelly told the conference.

In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from peak to trough in real terms.

“Construction, but not demolition, of residential and commercial property will fall to zero for the foreseeable future,” he said.

Low levels of education among those employed in construction – where worker numbers peaked at about 280,000 – meant retraining would not be straightforward.

Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.

Mr Kelly said he had been hailed as being extremely prescient as a result of his warnings in relation to the property bubble, when in fact he and a handful of other “amateurs” were merely stating what was obvious.

Sparing no blushes, he said professional economists in the Central Bank and the Economic and Social Research Institute “need to look very closely at their analyses of the Irish economy and figure out what went wrong”.

Mr Kelly said Ireland’s “reputational capital” had been damaged by “chancers” such as ex-Anglo Irish Bank chairman Seán FitzPatrick, who had been abetted by “buffoons” such as former financial regulator Patrick Neary, Minister for Finance Brian Lenihan and the Taoiseach.

In discussing the €110 billion given in loans to developers, Mr Kelly said a typical regional housing collapse in the US saw banks sustain a 20 per cent loss on these loans, but the narrowness of the Irish market increased the risk of “substantially larger losses” for Irish banks.

“The guarantees of Anglo and [Irish] Nationwide liabilities have a strong chance of being called in over the next 21 months,” he said. Extending the Government guarantee to these two financial institutions was “extraordinarily unwise” and could produce losses that the State cannot afford to repay.

The global financial crisis may have been positive for the Irish economy as it “stopped us dragging ourselves even deeper into our hole,” he said. “If it had taken another year or two, we would have ended up in an Icelandic-shaped hole, which is not to say that we won’t end up in one.”

Mr Kelly said the Government should abolish stamp duty on property, compile proper price and quantity statistics and restore competitiveness through a public sector pay cut of 10 per cent.

A paper by TCD economist Patrick Honohan on the banking crisis (What Went Wrong In Ireland?) argued that capital injections in the banks were a prerequisite for recovery. The financial regulator needed to decide now which banks had systemic importance to the economy – in other words, are “too big to fail”, and which are “zombie” banks.

“The goal is to avoid the continued operation of an undercapitalised, error-prone bank with a flawed business model and administrative practices, a problematic customer base and a compromised management facing distorted incentives,” the paper stated.


Ireland Vol.12 (Entrepreneurship Takes Off in Ireland)

Here is an article, Entrepreneurship Takes Off in Ireland (JAN. 17, 2008) | JAMES FLANIGAN @nytimes. Excerpts, underlines, italicization, et al. are on our own.

DUBLIN — Ireland is now alive with enthusiasm for entrepreneurs, who seemingly rank just below rock stars in popularity.

For evidence, consider the Ernst & Young accounting firm’s award for Irish Entrepreneur of the Year. The award show was prime-time television fare in October. (The winner, Liam Casey, runs a business…

The change began when Ireland entered the European Union in 1973. In subsequent years, the government rewrote its tax policies to attract foreign investment by American corporations, made all education free through the university level and changed tax rates and used direct equity investment to encourage Irish people to set up their own businesses.

“The change came in the 1990s,” said James Murphy, founder and managing director of Lifes2Good, a marketer of drugstore products for muscle aches, hair loss and other maladies. “Taxes and interest rates came down, and all of a sudden we believed in ourselves.”

The new environment also encouraged Ray Nolan, who founded Raven Computing in 1989 to provide software for lawyers to keep track of billable hours. He sold that company and founded another that created software for companies to manage billing and receipts. And in 1999, he founded Web Reservations International to provide booking and property management for hostels that cater to backpackers and economy travelers.

“Hostel owners needed to keep track of people sharing rooms, and bookings for Americans coming to Dublin for three nights,” said Feargal Mooney, chief operating officer of Web Reservations. “Hostel accommodations go for 10 to 20 euro a night,” he said, or $15 to $30 at today’s exchange rates, “so booking reservations in them wasn’t profitable for the big travel companies.”

As the business grew — its 100 employees and banks of computers now handle reservations for some 50,000 hostels in 166 countries — Web Reservations was offered an equity investment by Enterprise Ireland. “But we said this is our baby, we didn’t want to give up equity,” Mr. Mooney said. …

Government help for Irish entrepreneurs grew out of an overall economic policy devised in 1987 that reduced personal taxes, said Kevin Sherry, a director of Enterprise Ireland who specializes in start-up companies.

Income tax rates in Ireland today are 20 percent on the first $50,000 of income and 41 percent on income above that. But there are value-added taxes of 21 percent levied on all goods and transactions, with the exception of health and medical services, children’s clothing and food.

The tax on corporate profits, though, is 12.5 percent, which is an incentive to own a business. And government helps out. “We have helped over 300 people or groups in the last dozen years or so,” Mr. Sherry said.

Enterprise Ireland has also put up initial capital for venture investment funds and supports research and development. “We must support new approaches, nanotechnology, biotechnology and other sciences,” Mr. Sherry said, “because we cannot succeed in the future using what got us here in the past.”

Colm O’Gorman, who teaches entrepreneurship in master of business administration courses at Dublin City University, said the government agency is at the heart of several trends. Enterprise Ireland “supports research and development at Irish companies and universities,” Professor O’Gorman said, “and it is encouraging more women to become entrepreneurs, as the role of women has changed in Irish life.”

One reason for many changes in Ireland is its membership in the European Union, which has brought new perspectives and regulations from its governing councils in Brussels.

Elaine Doorly, for example, founded Radiation Safety Ireland three years ago to advise industry on effects of radiation in building materials, scanners and other sources, an evolving field that is driven by regulation from Brussels.

Ms. Doorly runs her consulting company part time while also working as the health officer specializing in radiological protection for the University of Dublin-Trinity College, the institution that is a leading site of Irish scientific research. She has held that post for 10 years. …

Mr. Murphy, 46, of Lifes2Good is one of the entrepreneurs who has expanded his business beyond Ireland’s borders. He qualified as a chartered accountant in the 1980s and worked in several countries in Europe before returning to Ireland in 1991 looking to own a business. …

Mr. Murphy founded Lifes2Good in 1997. Using infomercials to promote micro-current pain relief and health and beauty aids, the business spread throughout Britain and the Continent and grew to 40 employees and $30 million in annual revenue. Now he is trying to expand in the United States. …

Mr. Sherry of Enterprise Ireland said the passion behind the efforts to support entrepreneurs comes from a desire to make Ireland a better place. “We’re old enough to remember when times weren’t good. We don’t want to go back there.”


Ireland Vol.11 (The luck of the Irish)

Here is an article, The luck of the Irish (Oct 14th 2004) | @TheEconomist. Underlines, italicization, et al. are on our own.

The economic boom that spawned the “Celtic Tiger” has transformed Ireland. But, asks John Peet (interviewed here), can it last?

SURELY no other country in the rich world has seen its image change so fast. Fifteen years ago Ireland was deemed an economic failure, a country that after years of mismanagement was suffering from an awful cocktail of high unemployment, slow growth, high inflation, heavy taxation and towering public debts. Yet within a few years it had become the “Celtic Tiger”, a rare example of a developed country with a growth record to match East Asia’s, as well as enviably low unemployment and inflation, a low tax burden and a tiny public debt.

The Economist proved no better than anyone else at predicting this turnaround. Our most recent previous survey of Ireland, “The poorest of the rich”, published in 1988, concluded that the country was heading for catastrophe, mainly because it had tried to erect a welfare state on continental European lines in an economy that was too poor to support one. Yet only nine years later, in 1997, Ireland featured on The Economist‘s cover as “Europe’s shining light” [Ireland shines: Lessons and questions from an economic transformation (May 15th 1997)]. It goes to show how remarkable has been the transformation of a sleepy European backwater into a vibrant economy that in some years grew by as much as 10%.

That transformation has made the Irish republic, with just over 4m people, a place of great interest around the globe. Many rich countries, not least Ireland’s sclerotic neighbours in western Europe, would love to achieve a similar change of image. The eight central European countries that joined the European Union in May seem fascinated by Ireland. Civil servants and businessmen in Dublin talk wearily of a procession of visitors from such places as Vilnius and Bratislava, anxious to emulate Ireland’s leap from one of the EU’s poorest members in the 1980s into one of its richest. They all promise that they will make good use of EU money, as Ireland did, and avoid the fate of Greece, which in the 1980s was not far behind Ireland but has since been left standing.

Punching above its weight

The world’s interest in Ireland is not confined to its rags-to-riches story. Thanks partly to the Irish diaspora, created by a century and a half of emigration, the country has far more clout than its small population might suggest. It had a notable stint on the United Nations Security Council in 2001-02. And Europeans were impressed by the Irish presidency of the European Union in the first half of this year, which took in not only the eastward expansion of the EU and the choice of a new commission president, but also a deal on a new EU constitutional treaty, brokered by the Irish taoiseach (prime minister), Bertie Ahern. On a less elevated level, the main streets of cities the world over feature “Irish pubs” serving draught Guinness.

Over the border, Northern Ireland, which has a population of 1.7m, offers a valuable case-study in how to resolve an entrenched terrorist problem. The peace process in the province remains partial, bumpy and incomplete (only last month British, Irish and Northern Irish leaders failed yet again to agree on a precise formula for the revival of devolved government in Belfast). Yet ten years of painstaking diplomacy, by both the British and the Irish governments and by politicians and paramilitary leaders on both sides of the sectarian divide in the north, have largely put an end to the violence that for two decades disfigured Northern Ireland. Other countries with intractable terrorist problems might take note.

Peace in Northern Ireland has helped to boost the economy of the whole island. A visitor to Dublin, so lively and cosmopolitan today, would find it hard to believe that only a few decades ago it was gloomy and depressed. In the 1960s Ireland’s heavily agricultural economy, almost wholly dependent on exports to Britain, was only just emerging from the misguided protectionism that since the 1930s had been the main plank of Eamon De Valera’s ill-advised economic policy. Ireland had missed out almost entirely on Europe’s post-war boom; living standards were stagnating and emigration was in full flow. In 1960 the republic’s population was down to around 2.8m, the lowest in two centuries and a pale shadow of the 8m (for the whole island) in 1840, when this was one of the most densely populated countries in Europe. Many wondered if Ireland had a future.

In fact, the 1960s proved something of a turning-point. Corporate tax on foreign multinational companies investing in Ireland was cut to zero in 1957. Belatedly, the country embraced free trade with Britain and, by joining the European Economic Community in 1973, with much of the rest of Europe. The combination of zero corporate taxes, a low-wage economy inside the EEC and a shared language proved a strong lure for American manufacturers. Ireland’s long love affair with foreign direct investment (FDI) began in the 1960s. Free secondary education for all arrived in 1967, and after 1973 Irish farmers benefited from Europe’s munificent farm subsidies.

This promising start, however, was kyboshed by the two oil shocks of the 1970s, and even more by a knuckle-headed policy response. Successive Irish governments sought to offset the cut in living standards imposed by higher oil prices through fiscal and monetary expansion. The result, ultimately, was the high inflation, high unemployment, slow growth and even electoral instability that marred the 1980s. Emigration, especially of graduates, hit new highs. At the start of the third Haughey government in 1987, a grim joke made the rounds: would the last Irishman to leave please turn out the lights? Yet only a few years later the Irish miracle had arrived. What caused it? Can it be replicated? And can it last?


Ireland Vol.10 (Must be Mister Fix-It, not a master of disaster)

Here is an article, Cowen must be Mister Fix-It, not a master of disaster (28/12/2008) | RICHARD ALDOUS. Excerpts, underlines, italicization, et al. are on our own.

The year ended with the death of Conor Cruise O’Brien, arguably Ireland’s greatest public intellectual and a political force more honoured abroad than in his own country. As the most prominent anti-IRA member of the Cosgrave government, O’Brien would have had some sympathy for any government minister held hostage at gunpoint.

Like O’Brien, the TD in question, Dick Roche, showed a certain coolness in the face of danger. Perhaps it seemed like déjà-vu. For in 2008 the political establishment has spent most of the year with a gun to its head.

That’s certainly what the Mahon Tribunal felt like for the first four months of the year. In the end, then Taoiseach Bertie Ahern decided to pull the trigger himself for the sake of the political process and the country. Troubling questions remain about the democratic deficit involved in this turn of events. Politicians clearly must be held to account — that is why the tribunal was established in the first place. …

But Mahon was not the only assault on the political establishment this year. Declan Ganley, who many had laughed off, emerged as the most successful campaigner of the year. His triumph in the Lisbon referendum was in turn a humiliation for the political elite. The ‘Yes’ campaign’s message that the treaty was a tidying up exercise was dull to the point of inertia. Nobody seemed to be in charge. …

If the resurrection of the treaty remains a possibility, one death looks final and irreversible. The Celtic Tiger has now gone the way of the dodo. A year ago all the talk was of soft landings and money-making resilience. Now the only question is whether the country can avoid a depression.

In September, having been the golden haired child of EU economic vitality, Ireland became the first western European country to go into recession. Worse followed. Bank bailouts, rising unemployment and emigration, increased taxes (a.k.a. the ‘income levy’), a black hole in the public finances, shrinking taxation revenues, ballooning national debt, out of control public sector spending: all the news was bad with a promise of worse to come.

Global economic woes and the humiliation of Lisbon played havoc with Brian Cowen’s first hundred-plus days in office. …

The challenge now for Mr Cowen is to show that he represents Ireland’s future rather than the fag end of the Ahern years. Events further afield in 2008 will have given him cause for despondency and encouragement.

Who’d have thought that Offaly would produce both the sitting Taoiseach and the US President-elect? But Brian Cowen won’t like the precedent set by the victory of Barack Obama.

Obama was swept to power on a change agenda that saw off his own party establishment in the Clintons and then, in John McCain, crushed just about the only Republican able to claim a reform mandate. It is easy to forget that even as late as September, Senator McCain was narrowly ahead in the opinion polls. Then came the collapse of Lehman Brothers. McCain’s campaign went into instant meltdown and never recovered. Senator Obama may have been untested and offering the kind of liberal economic programme that in previous elections had seen Democrats like George McGovern trounced. The electorate didn’t care: change coupled with Obama’s personal dynamism was better than continuity of any kind.

That’s bad news for Mr Cowen after more than a decade of Fianna Fail government. For encouragement, he needs to look not across the Atlantic but instead over the Irish Sea.

For much of 2008, the British Prime Minister, Gordon Brown, found himself in a similar position to the Taoiseach. Opinion polls seemed apocalyptic. His performances in the House of Commons were leaden. Having been an impressive ‘Iron’ Chancellor of the Exchequer, the premiership appeared to have diminished him. It seemed only a matter of time before he was replaced.

Then the banking crisis hit. The prime minister found a new energy and purpose. He even took up yoga. Where previously there had been no direction, now there was vision and strategy. Gordon Brown visibly bucked up. Opinion polls reflected a sense that after all, he might be the right man for the job.

There’s a lesson in this. We forgive mistakes that come from brave decisions. It is inertia and despair that earns our contempt. Early on, the Cowen government took the courageous route. The guarantee to the banks was bold and imaginative. It drew international criticism followed by quiet imitation. Since then, however, there has been only drift.

Another lesson from Mr Brown is that bold decisions require political heft. When the British prime minister was polling badly, there was precious little of that in his cabinet. His response, to widespread amazement, was to bring his old foe Peter Mandelson back from Brussels. Blairite advisors Alistair Campbell and Jonathan Powell also returned to the fold. The turnaround in fortunes was immediate and dramatic.

Mr Cowen has plenty of talent in a young team, but the more experienced cabinet heavyweights, notably Micheal Martin, have been kept at an arm’s length from economic policy making.

If imitation is the sincerest form of flattery, Mr Cowen could do worse than bring Charlie McCreevy back from Brussels. Like Mandelson, he is a controversial figure, but he has chutzpah and is a bold thinker. More than any other individual in Fianna Fail, Mr McCreevy has the ability to get the government on the front foot again. And to cheer everyone up.

That last point is more important than we might think. An observation often made of Mr Brown is that he has visibly perked up since the financial crisis began. That may seem odd in the middle of a global meltdown, but it reflects his renewed sense of confidence and purpose.

Some of that may be to do with the early morning yoga in Downing Street. More likely, it is because he finally believes he’s up to the job.

History teaches us that optimism is one of the most important aspects of political leadership when times are hard. Franklin D Roosevelt, whose New Deal steered the US through the great depression of the 1930s, is considered among America’s very finest presidents. Yet in reality the economy in that decade remained a disaster, with unemployment stuck at 20 per cent even as late as 1938. But Roosevelt, with his breezy fireside chats and sense that he was doing everything possible continued to be trusted — in 1936, he was re-elected with the greatest landslide in the history of the two-party system.

The Taoiseach needs to find a similar kind of optimism and direction. No-one is suggesting yoga in government buildings — although don’t knock it if it works — but what he does need to convey is the sense that he is the master not the servant of events.

Mr Cowen is not afraid of a fight. But he may need to mix it with a smile on his face.

He could find worse role models than Dick Roche and Conor Cruise O’Brien.


Ireland Vol.9 (How Ireland Became the Celtic Tiger)

Here is an article, How Ireland Became the Celtic Tiger (June 2006) | Sean Dorgan (@Heritage). Underlines, italicization, et al. are on our own.

In just over a generation, Ireland has evolved from one of the poorest countries in Western Europe to one of the most successful. It has reversed the persistent emigration of its best and brightest and achieved an enviable reputation as a thriving, knowledge-driven economy.

As a result of sustained efforts over many years, the past of declining population, poor living standards, and economic stagnation has been left behind. Ireland now has the second highest gross domestic product (GDP) per capita within the European Union (after Luxembourg), one-third higher than the EU-25 average, and has achieved exceptional growth.

One of the biggest successes of the Irish economy has been new job creation. From 1990 to 2005, employment soared from 1.1 million to 1.9 million. Economic growth, more Jobs, and rising living standards meant the resolution of the emigration problem, which had bedeviled Ireland for generations.

The population increased by almost 15 percent from 1996 to 2005 in a striking reversal of previous trends. In one year alone (July 2004 – June 2005), employment increased by 5 percent. Ireland is now seen as the land of opportunity by many workers from the 10 newest EU member states. Its unemployment rate of 4.4 percent is less than half the EU average. Public budgets are in balance, and foreign investment was equivalent to 17 percent of GDP in 2003.

Ireland achieved this success through a combination of sensible policies and pragmatism. At the heart of these policies was a belief in economic openness to global markets, low tax rates, and investment in education. While economic success over the past 15 years can be ascribed to a range of domestic and international factors, it was not a fluke. Ireland has long had, and intends to sustain, low tax rates to attract investment. Its current 12.5 percent corporate tax rate evolved from the zero rate on export sales in the 1950s and the 10 percent rate on manufacturing and some internationally traded services introduced in 1980.

Ireland’s transformation was national in scope, with individuals, businesses, institutions, and government sharing the same ambition. It involved parents deciding that their children would have choices that they did not have and would not be forced to leave their home communities because of economic necessity. Political decisions were driven and sustained by the public will for success. There were some deviations from sensible policies at times, but through the many difficult years, the threads of consistent development can be seen. This paper explains how the transformation occurred.

 

Economic Nationalism

For a generation after achieving independence from the United Kingdom in 1922, Ireland sought to be economically self-sufficient. It relied on small-scale agriculture, exporting primary produce to the U.K. market and manufacturing mainly for the home market of less than 3 million people. trade barriers such as high Tariffs and a policy of import substitution sought to make this reliance on economic nationalism successful. Inevitably, it failed.

Ireland’s population was just short of 3 million people when the new state was established in 1922. It fell marginally each decade thereafter until the 1950s, when 400,000 people (one-seventh of the population) emigrated in a single decade. There could be no clearer evidence of the failure of economic policies and opportunities and of the inadequate fulfillment of national aspirations.

By the mid-1950s, it was clear that economic nationalism was not sustainable. The stagnation and emigration, and the despondency they caused, were in stark contrast to other, fast-recovering economies of postwar Europe. As a result, radical policy change was introduced, and the previous protectionism was abandoned in favor of openness, driven by the need for progress from an intolerable position that offered few prospects for economic success.

The policy changes were drawn together in Economic Development, an official paper published in 1958 that overturned much previous policy thinking by advocating free trade, foreign investment, productive (rather than mainly social) investment, and growth rather than fiscal restraint as the prime objective of economic management. In 1956, to spur business development, tax relief on profits from export sales from Ireland was offered for the first time. In 1958, all controls on foreign ownership of businesses were lifted.

In the early 1960s, Ireland unilaterally lowered its import Tariffs and started to negotiate a free trade agreement with the U.K. This agreement was concluded in 1965, and Ireland joined the General Agreement on Tariffs and trade in 1967. In 1961, Ireland expressed its ambition to join the European Economic Community (EEC), which had been founded by the six member states in the previous decade. The U.K. had the same ambition, but this was thwarted by a French veto for some years, and Ireland’s application did not proceed. The U.K., Ireland, and Denmark finally joined the EEC in 1973.

These policy changes were facilitated by a transition from the generation that had won independence (although Sean Lemass, the political leader who made the most changes in a few years, was himself part of that generation) and by Ken Whitaker, the young and forward-looking head of the civil service, who led the Department of Finance from 1956 to 1969. Whitaker was the primary author of Economic Development.

 

The Transition to Openness

More open markets spurred improved economic performance in the 1960s, compared to the previous decade. Annual average growth in national income – both GDP and gross national product (GNP) – was 4.2 percent. The Industrial Development Authority (IDA) sought out new modern industry overseas, which benefited from the attractions of abundant English-speaking and low-cost labor and the exemption from corporation tax of all profits from exports. Pfizer, which established its first plant in 1969, was one of over 350 overseas companies that set up in Ireland by 1970.

However, this progress did not initially spur employment or stop emigration. In fact it came at a price: Many companies that had been set up in earlier years to serve the small closed national market were uncompetitive in the face of free trade. Moreover, Ireland still depended heavily on agriculture, which had low output and income levels, and the migration of people from the land was greater than job creation in new businesses. As a result, there was no net increase in employment in the 1960s, and net emigration from the country continued, although at a lower rate than in the 1950s.

The role of the state also increased during the 1960s. Public expenditure grew from 32 percent of GNP in 1960 to 42 percent in 1973. Social services and education, in particular, expanded with the state. The Organisation for Economic Co-operation and Development (OECD) sponsored an influential report on education in Ireland, Investment in Education, which was published in 1965. This report emphasized that education was key to the future of Ireland’s society and economy. Although not directly recommended in the report, beginning in 1967, the state paid for all secondary schooling and transportation to school. This measure resulted in a rapid rise in the level of education attained by the younger population.

Attempts were made to adjust to the new openness. The National Industrial and Economic Council, comprising government, business, and other interests, discussed the challenges of restructuring industry now faced with free-trade competition. Underlying the extensive processes of consultation and engagement was a clear commitment to change, even if that change had inevitable problems and costs.

With hindsight, the path to openness was irreversible, although it may not always have seemed so at the time. The establishment of the first (state-owned) television service in 1960 quickly facilitated debate on, and sometimes a questioning of, long-established societal norms and values. The country, which had been introspective and highly sensitized by its history, now began to see the possibilities that others enjoyed.

 

Joining Europe and Going Forward

When Ireland joined the EEC in 1973, its confidence and sense of its own status grew. Now it could deal with large and successful states as a partner, no longer burdened by its colonial history. Business now had free access to a much larger market, and exports could be diversified away from dependence on the U.K. Moreover, through the EEC’s Common Agricultural Policy, agriculture gained from access to wider markets at good prices. An improvement in Ireland’s living standards and prospects lifted spirits.

The 1970s reversed past trends. For the first time since independence, the population increased, rising by 15 percent for the decade. National income increased at a sustained annual rate of about 4 percent. Unlike previous decades, employment increased by about 1 percent per year, although a large part of this increase was in the state sector, contributing to financing problems in subsequent years.

The IDA played a central role in the new drive for success. While still funded by the state, the IDA was established in 1970 with its own board, staff, and operating freedoms, separate from the Department of Industry and Commerce of which it had been a part. It was the first dedicated state agency in the world to undertake a massive and sustained campaign to establish a modern manufacturing base by attracting large-scale foreign investment.

The IDA adopted pragmatic, business-like, focused marketing methods. The key decision was to focus on companies that represented the future-high technology, high output, and high skills. The main targets included the computer industry, pharmaceuticals, and medical technology, followed by international services. Soon investments were won from leading companies, including Amdahl, Baxter Travenol, Digital, Merck Sharpe, Wang, and Warner Lambert. All of these companies were persuaded of the value of using Ireland as an export platform to serve Europe and other markets. By 1975, more than 450 foreign-owned industrial projects, covering a wide range of manufacturing sectors, accounted for two-thirds of Ireland’s total industrial output.

While the new multinational companies brought success, many older indigenous businesses had considerable difficulty in adjusting to the new open trading conditions. An apparent dichotomy in the performance of new and old, foreign and Irish companies would be the subject of debate and some policy reassessment in the following years.

The 1970s also saw a rapid expansion in public (state) expenditure on social welfare, health and education, housing, telecommunications and other infrastructure, and administrative services. Public-sector employment represented a third of the total workforce by 1980, partly because Jobs were created to deal with rising unemployment, which stood at 9 percent of the workforce in 1977.

All of this happened against a backdrop of high inflation, which averaged 13.6 percent per year from 1971 to 1980 and was driven partly by international factors such as oil crises and partly by domestic demand and an expansionary fiscal policy. Public budget deficits and high public borrowing were features of the latter years of the decade, creating the basis for the crises that erupted in the 1980s.

 

Crises Accumulate

Unsolved, the underlying economic problems of the 1970s rolled over into the 1980s, producing disappointment. The causes were the return of high unemployment, emigration, steady worsening of the public finances, and the seeming inability of any government to manage the nation’s affairs and find a solution to the worsening situation. The atmosphere of the 1980s was more redolent of the dark years of the 1950s than of the optimism that had permeated the two decades in between.

The feeling of failure was exacerbated by the waves of emigration of young people, just as in a generation earlier. Whole classes of university graduates would frequently leave the country. There was a disheartening drain of human capital. A net 200,000 people left from 1981 to 1990. In the worst years, more than 1 percent of the country’s population fled. This was not what the policies of the previous 25 years had been designed to achieve. What had gone wrong?

A number of internal and external factors were conspiring to slow down progress and undermine confidence. Global conditions were weaker after the oil shocks of the 1970s. The momentum from EEC entry had faded. Persistent inflation averaged close to 11 percent per year between 1981 and 1986. Jobs created by new foreign investment, while substantial, were inadequate to employ the growing workforce and counter the failure rate of older businesses.

Attempts at government intervention proved to be no better. Continued increases in public spending, tax increases, and deficit financing through borrowing soured the investment climate and failed to raise employment while increasing the drag on the underperforming economy.

Between 1980 and 1986, total government expenditure grew from 54 percent to 62 percent of GNP, and public debt increased from 87 percent to 120 percent of GNP while annual budget deficits exceeded 10 percent of GNP. Over one-third of all tax revenue (over 90 percent of income tax revenue) was being used to service this debt. Meanwhile, the economic dependency ratio rose to 2.3 persons per person employed in 1985, and unemployment stood at 15 percent.

While the IDA continued to attract foreign investors (IBM, Lotus, Microsoft, and Bausch & Lomb, among many others) into the 1980s, some high-profile failures of recent investments raised questions about this strategy. In particular, a specially commissioned investigation by Telesis on behalf of the National Economic and Social Council (NESC) raised some troubling issues.

Telesis found that the value of inward investments tended to be overstated-employment prospects were too often exaggerated at a time of high unemployment-and that promised linkages to the domestic economy were frequently weak. It also criticized what it saw as an excessive attention to overseas companies relative to indigenous businesses. While initially stung, the IDA responded well to the report and increased its attention to Irish-owned industry.

The political parties were not successfully addressing the gathering gloom. Fianna Fail, the opposition party since 1982, won the general election in 1987. When in government in the late 1970s, Fianna Fail had been largely responsible for the excessive and misguided public spending. This time, however, the party tried a different path. On election to government in 1987, they surprised many, including their own supporters, with a program of severe cuts in expenditure accompanied by some novel consensus-building and developmental measures. Within a few years, these steps began to show dividends, helped by a coincidence of other factors.

 

Recovery and Success

Smaller government became part of the road to success. There was surprise with the first moves to cut spending severely across a range of programs and abolish a number of government agencies. These steps were strongly criticized initially, especially when they seemed to affect (state-provided) health and social services, but the depth of the budgetary crisis allowed the momentum to be sustained. The government was assisted by a consensus that had been built in the NESC, comprising business, farming, trade union, and social interest groups. The main opposition party, whose leader had been minister for finance before the election, also supported any measures that restored fiscal discipline.

A second element of the new government’s action plan was moderate wage increases in return for modest reductions in direct income taxes, in effect allowing take-home pay to increase more than the pay raise granted by employers. This three-year Program for National Recovery involved government itself, employers, unions, and farmers. This helped to break the spiral of inflationary wage increases and ensured industrial peace. The program also served to create agreement on the nature of the crisis facing the state and on steps needed to deal with it. The wider benefits of consensus on development priorities and the shared efforts involved to achieve national goals proved to be of lasting value, and similar national partnership agreements have been put in place repeatedly up to 2005.

While cutting back on spending, the government took steps to promote business investment. A notable example was the adoption of a proposal to create the International Financial Services Centre (IFSC) in the old Docklands area of Dublin. The successful development of the IFSC shows the strength of cooperation between business interests and all parts of the state system that is such a strong characteristic of Ireland.

Development steps in financial services and other sectors were assisted by a series of investments in telecommunications from the 1980s onward, although the sector remained largely state-owned until the late 1990s. Late entry to heavy investment in this sector ultimately served Ireland well in that it provided the most advanced and comprehensive digital network in Europe (much as the relevance of the education system was also greater as a result of its late expansion).


Ireland Vol.8 (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.7 (FDI and Irish Economic Development over Four Stages of European Integration)

Here is also a paper, FDI and Irish Economic Development over Four Stages of European Integration (PDF, January 2006) | Frank Barry, University College Dublin. Underlines, italicization, excerpts, et al. are on our own.

  1. Introduction

Ireland is the most FDI-intensive economy in Europe.  Foreign-owned firms account for almost 50 percent of Irish manufacturing employment.  This compares to an average figure of 23 for the Western European EU member states and a figure of 33 for the three largest Central and Eastern European economies.  Of the 17 EU countries plus the US and Norway for which OECD (2005, E7) provides data, Ireland also records the highest share of services-sector employment in foreign-owned firms.  These figures are reflected in the value of the stock of foreign direct investment (FDI).  Per head of population, the Irish inward FDI stock is a multiple of the EU average.

The distinguishing feature of the country’s development strategy over the last four decades of outward orientation has been the emphasis placed on attracting FDI.  The country had been remarkably successful in this regard even before the “Celtic Tiger era” of the 1990s and beyond.  Having stumbled upon the strategy, it turned out with hindsight to accord well with Ireland’s advantages:  its Atlantic location and English-speaking environment, relatively low labour costs by Western European standards, cultural connections with the US and Western European standards of governance.

The present paper analyses the co-evolution of institutional features of the Irish economic environment and the types of FDI available to European economies. We divide the period of Irish outward orientation into four distinct phases.

The first phase of Irish trade integration with Continental Europe began in the late 1950s when the country moved away from protectionism, dropped its restrictions on foreign ownership of industry and adopted a zero rate of corporation tax on manufactured exports.  These moves drew in substantial numbers of US firms who exported into mainland Europe (as opposed to the UK, which remains to this day the dominant export destination of most Irish domestic firms) even though substantial tariff barriers remained against Irish-produced goods.  Increased openness saw the country adopt the main proposals of an influential OECD report on primary and secondary education in 1965, which sparked a dramatic educational expansion at all levels.

The second phase began when Ireland joined the EU in 1973.  This brought a substantial increase in FDI inflows which – in response to the upgrading of the Irish tertiary educational system – began to locate in higher-technology sectors.  Macroeconomic instability over the period of the oil shocks however prevented Irish convergence on average Western European living standards over this period.

The third integration phase was driven by the Single European Market, the global high-tech boom and domestic policy adjustments in Ireland.  The outlawing of restrictive public procurement practices on the part of EU governments allowed Ireland’s locational advantages come more strongly to the fore; the low-corporation tax environment proved especially beneficial to high-tech MNCs who are better able to exploit its benefits; Ireland’s continued educational upgrading remained an important magnet for such firms, while fiscal consolidation, EU regional aid and the institutions of social partnership brought further competitiveness gains.  Furthermore, the EU-enforced inter-sectoral harmonisation of corporation tax rates in Ireland brought the Irish rate on services down dramatically just as global services-sector offshoring began in earnest.

The fourth phase arose as a consequence of Ireland’s convergence on average Western European living standards over the Celtic Tiger era and the accession of other low corporation-tax states to the EU.  This required Ireland to focus more on developing its national system of innovation in order to target the increasingly technology-sourcing foreign direct investment flowing into and across Europe.

  1. Phase 1: from Protectionism to EU Accession (1958-1973)

Ireland remained protectionist for about a decade after most of the rest of Western Europe had moved towards freer trade. The post-war boom of the 1950s saw Western Europe achieving growth rates of almost 6 percent per annum while protectionist Ireland stagnated with a growth rate of less than 2 percent, and an employment growth rate of less than 1 percent.  The need to import the more sophisticated capital and consumer goods that the country could not produce for itself led to balance of payments crises and macroeconomic instability, exactly as happened in protectionist Spain at around this time. The depressed economy of the 1950s saw more than 400,000 Irish people emigrate, out of a total population of less than 3 million.

By the end of the 1950s it was clear that economic policy would need to be completely overhauled.  The First Programme for Economic Expansion, which removed protectionism, encouraged foreign direct investment and promoted exports, was introduced in 1958.  The Anglo-Irish Free Trade Agreement, which aimed to liberalise trade with the country’s major trading partner of the time, the United Kingdom, came into force in 1966, and both countries acceded to the then European Economic Community (EEC) in 1973.  The move towards openness was accompanied by the introduction of a zero tax rate on profits derived from manufactured exports and a liberalisation of the law on foreign ownership of companies. As the bulk of the country’s exports at that time were agricultural in nature, there was little diminution of the tax base when the concessionary tax rate was adopted.

O’Hearn (1987) has estimated employment levels in the new foreign firms that entered Ireland to avail of the zero tax rate on manufactured exports.  By the time of EU entry these firms accounted for slightly more than half of all foreign-firm employment in manufacturing, with the remainder accounted for by the mainly UK firms that had entered Ireland to cater to the home market, whether under protectionism or in the outward-oriented era. …

…most of the growth prior to EU entry was in traditional or low-tech sectors such as Textiles and Clothing, Metals Industries (such as aluminium extrusions, shipbuilding, cranes, metal nuts), Pulp and Paper, and Rubber and Plastics.

The FDI inflows of this period led to Ireland developing a revealed comparative advantage (at the SITC-1 level) in Chemicals (whose share of exports grew from less than one half of 1 percent at the end of the 1950s to 6 percent at the time of EU entry) and in “manufactured goods classified by material” and “miscellaneous manufactured articles”.

The growth in foreign industry also contributed to a substantial diversification of Irish exports away from the UK market, with the then 6-country EU share of manufacturing exports rising by 10 percentage points between the late 1950s and the early 1970s.

It is of interest to note that though the numbers of new foreign firms establishing operations in Ireland accelerated as EU accession drew closer, the impact of EU membership on inbound FDI would have been unclear a priori, since accession entailed the loss of Ireland’s preferential position in the UK market.

The increased intellectual openness of the period saw Ireland (and later Austria) volunteer to allow the OECD conduct a survey of the entire national education system.   An important feature of the subsequent report, issued in 1965, was that – almost for the first time – technocratic expertise was now to be heard alongside the party political and denominational interests which had previously dominated ministerial councils (Logan, 1999).  The report was scathing in its assessment of the Irish system, noting that over half of Irish children left school at or before the age of thirteen.  This finding generated newspaper headlines and presaged the introduction of ‘free’ second-level education and free access to special transport networks for all second-level school pupils in 1967.  These measures sparked a dramatic educational expansion over the course of the 1970s and subsequently.

Notwithstanding Ireland’s early successes in attracting FDI, there was no convergence on average Western European living standards over this period, nor indeed until the late 1980s.  This is arguably ascribable to Ireland’s “regional economy” character, where, because of the historic ease of emigration to the UK, Ireland can be thought to have little control over its net-of-tax labour costs (though there were substantial insider-outsider problems in the labour market also).  This would have prevented Ireland from industrialising through the development of low-wage consumer goods exports as each of the other traditionally less developed Western European economies – Portugal, Spain and Greece – did in the 1960s…

  1. Phase 2: From EU Accession to the Single Market Era (1973-87)

Although Ireland was already relatively FDI-intensive at the time of EU entry, the number of jobs in foreign-owned manufacturing industry grew by 23 percent between 1973 and 1980, before declining subsequently as a consequence of macroeconomic mismanagement.

Although Ireland’s low corporation-tax environment is particularly attractive to high technology firms, the increasing technological intensity… would not have been possible without the educational advance touched upon in the last section.

The structure of the Irish education system that emerged in the wake of the OECD report is unusual in that while Ireland just matches the OECD mean in terms of those with university qualifications, it has far higher proportions than the average OECD country with specific post-secondary and sub-degree tertiary educational qualifications…

The post-secondary education system that emerged in Ireland was based on a realisation that, unlike in the UK – whose early industrialisation had ensured the evolution of a well-developed system to provide an intermediate layer of technicians – the education system in Ireland would need to provide this intermediate layer from scratch if human resources were to be available to sustain the industrial expansion… that followed on from Ireland’s relatively late trade-liberalisation-driven industrialisation.

The main components of the technical-education system developed in Ireland over the course of the 1970s were the Regional Technical Colleges (later rebranded as Institutes of Technology), for which there was no UK model.  These offered subdegree programmes of shorter duration than those at universities and concentrated in the fields of engineering and business studies, and their curricula had a practical orientation designed to be responsive to the needs of local industry and business.

From having had a tiny short-cycle third-level sector before 1970, by 1981 Ireland had internationally, after the Netherlands, the highest proportion of third-level students taking sub-degree courses.  Since the late 1970s, furthermore, the universities themselves – at the behest of the national development agency, the IDA – had begun to accept increased responsibility for ensuring that manpower needs were met.  The Manpower Consultative Committee was established in 1978 to provide a forum for dialogue between the IDA and the education system.  The state agency, concerned by the looming disparity between electronics graduate outflows and its own demand projections, convinced the government to fund a massive expansion in educational capacity in these areas.  The output of engineering graduates, as a result, increased by 40 percent between 1978 and 1983, while the output from computer science increased tenfold over the same short period.  The IDA in turn was able to use the rapidity of this response – exemplified by the immediate introduction of a range of one-year conversion courses to furnish science graduates with electronics qualifications –  as a further selling point to foreign investors; MacSharry and White (2000).

…the major expansions were in computing equipment and electronic components, pharmaceuticals and medical and optical devices, and these expansions continued into the following “Celtic Tiger” era.

Once again over this period however, notwithstanding the continued success in upgrading the country’s sectoral FDI allocation, no convergence was recorded on average Western European living standards.  Unlike in the previous era (1960-73) however, this lack of convergence was replicated across all the poorer Western European economies… Barry (2003) identifies deficient macroeconomic policymaking across all these four countries in the wake of the oil shocks as a common factor behind their weak performance, suggesting that poorer countries may be structurally less capable of adhering to appropriate monetary and fiscal policies in the event of a downturn in the world economy.  Convergence is also known to be more difficult to achieve when the encompassing world economy is performing poorly.

  1. Phase 3: The Single Market, Services Offshoring and the Celtic Tiger

In this phase, running from 1987 to the present, all four cohesion economies converged substantially on average Western European living standards, with Ireland’s performance being particularly dramatic. The various factors behind the Irish performance are discussed in detail elsewhere, e.g. in Barry (2004).  Here we focus solely on the contribution of FDI.

Manufacturing FDI into and within Europe expanded in the late 1980s. …with respect to US investments in Europe, with the US Department of Commerce Survey of Current Business (March 1991) attributing much of this to the lead up to the introduction of the Single European Market in 1992.  The figure also shows that Ireland captured a growing share of US investments in Europe. MacSharry and White (2000) explain this latter effect by describing how several larger EU countries, in the pre-Single Market era, “had suggested to potential investors that publicly funded purchases of their products might be blacklisted if the new investment was located in Ireland” (rather than in the countries from which the threatening noises issued).   With the outlawing of restrictive public procurement practices under the Single Market initiative, the attractiveness of Ireland as a destination for FDI increased.  This effect would undoubtedly have been dampened without the concurrent restoration of macroeconomic stability.

The increasing share of high-tech sectors in European manufacturing over the 1990s also helped, as did the high profitability of the era, since both increase the attractiveness of a low corporation-tax environment.  Altshuler, Grubert and Newlon (2001) argue, furthermore, that US foreign investment has become more sensitive to differences in host country taxes in recent years, and Ireland has had – until the recent enlargement – the lowest rate of corporation tax in the EU.  The Single Market programme may also have allowed Ireland achieve a critical mass of US firms in certain sectors, allowing agglomeration and demonstration effects to come into play (Barry, Görg and Strobl, 2003).

Thus the number of jobs in foreign-owned manufacturing in Ireland expanded by almost 50 percent between 1987 and 2000.

Combined with this increase in manufacturing FDI, Ireland also began to attract increasing services-sector FDI inflows (Grimes and White, 2005).  Starting from a base close to zero in the late 1980s, by the new millennium, foreign-firm employment in each of Ireland’s strong FDI-intensive manufacturing sectors is now matched by foreign-firm employment in several offshore services sectors located in Ireland.  Thus computer software now matches hardware, international financial services matches pharmaceuticals and other business-process offshored (BPO) activities match employment levels in instrument engineering.  Furthermore, as Barry and Van Egeraat (2005) show, as computer hardware firms have shifted their manufacturing facilities to Asia and Central and Eastern Europe, they have upgraded their operations in Ireland into services activities.

An indicator of Ireland recent successes in offshore services… Though Ireland has only around 1 percent of the EU15 population, it attracted 50 percent of new shared services projects in the EU15 and 8 percent of regional headquarters projects in the period to which the data refer.

It is well known that the share of services in international FDI flows has been increasing over recent decades (UNCTAD 2004).  Ireland’s ability to attract an increased share of services was facilitated by substantial reductions in the rate of corporation tax on services over the course of the 1980s and 1990s… These changes were generally made of the behest of the European Commission.   Export Profits Tax Relief, for example, began to be phased out in 1978, to be replaced by a special 10 percent rate for manufacturing industry.  From 1987 this special rate was extended to qualifying activities carried out at the newly opened International Financial Services Centre in Dublin. Most other market services meanwhile continued to be subject to the standard 32 percent rate that prevailed at that time.  The European Commission had been pushing for some time for tax harmonisation across sectors, implicitly hoping that Ireland’s rate would be pushed much closer to the EU average.  The Irish government instead decided in 1998 on a harmonised rate of 12.5 percent –to be instituted from 2003 – which yielded substantial benefits to most services sectors in order to cushion the impact on manufacturing.

Table 7: Ireland’s corporation tax regime

  • 1956: Finance Act introduces Export Profits Tax Relief (EPTR), primarily for manufacturing industry, with 50 percent tax remission on profits (increased to 100 percent two years later). The measure provided full relief for fifteen years and tapering relief for a further five years.
  • 1969: EPTR extended to 1989-90.
  • 1978: Government abolishes EPTR and replaces it with a special 10 percent rate of corporation profits tax for all manufacturing industry from 1981-2000. Those qualifying for export-tax relief before 1981 continue to benefit until 1990.
  • 1987: Financial Services Act establishes International Financial Services Centre in Dublin. Profits of qualifying activities carried out from the Centre are taxed at 10 percent until 2005.
  • 1990: Government extends the 10 percent corporation profits tax rate to 2010.
  • 1998: Agreement with European Commission on universal 12.5 percent corporation tax for all trading companies from 2003. All existing commitments to the 10 percent tax rates for manufacturing industry to the year 2010 to be honoured. The current 28 percent standard rate applying to most Services to be reduced by 4 percent annually in 2000, 2001 and 2002, and by 3.5 percent in 2003, giving a 12.5 percent rate at that date.

The Finance Act 2004, furthermore, established a new headquarters regime aimed at attracting international corporations to establish their regional HQ in Dublin.  This has further served to attract other activities such as shared services and treasury management (Finance Dublin Yearbook, 2004).

  1. Phase 4: Science, Technology and Innovation Policy and the Offshoring of R&D Functions

Offshoring of R&D facilities is a growing phenomenon.  Kuemmerle (1999a) tracked 32 MNCs in the pharmaceutical and electronics industries and found that their overseas R&D staff increased from 6 percent in 1965 to more than 25 percent today, while the number of overseas R&D labs increased from 14 to 84.  His study distinguishes between “home-base-exploiting” R&D sites (which are associated with traditional FDI, where firms set up overseas to exploit on a larger stage the advantages, such as brand names, that they had already accumulated) and “home-base-augmenting” or technology-sourcing cites.  The former are found to be more likely to be located close to existing factories and important markets, while the latter are more likely to be located close to universities.  The proportion of R&D labs that Kuemmerle categorises as home-base-augmenting rose from 7 percent to 40 percent over the period he studied.

The 2005 UNCTAD World Investment Report provides broader and more detailed evidence on the recent growth in global offshoring of R&D functions.  This provides the context for recent developments in science, technology and innovation (STI) policy in Ireland.

Given the growth in offshoring of R&D, along with Ireland’s convergence on average Western European living standards by the early years of the new millennium –  and perhaps also in response to the threat of increased corporation-tax competition from Central and Eastern Europe – science, technology and innovation policy has recently moved to the heart of the Irish policy agenda.

This was heralded by the release in 1996 of the first-ever Irish Government White Paper on Science, Technology and Innovation.  It is underlined by the five-fold increase in investment in these areas under the current National Development Plan (2000-06), by the launch in 1998 of the Programme for Research in Third-Level Institutions (which established 24 major research centres as well as major programmes in human genomics and computational physics), by the establishment of Science Foundation Ireland (SFI) in 2000, and by the introduction of a 20 percent tax credit for incremental R&D in the Finance Act of 2004.

The origins of Science Foundation Ireland lay in a Technology Foresight Exercise organised by the state body Forfás, which asked client company executives where they saw their companies headed over the next 10–15 years, and what the Irish government could do to respond to those changes. The response was that as Ireland was no longer a low-cost manufacturing location it would have to develop more highly trained engineers, research scientists etc. to become a center for innovation, research, design and development.

The exercise proposed the establishment of a Technology Foresight Fund to promote and finance new basic and applied scientific and technological research in Ireland, and SFI was set up to administer this fund.  Besides providing awards to support scientists and engineers working in designated fields (along the lines of the US NSF), SFI has established a host of joint partnerships between third level research institutions and industry.

Within ICT alone, the last few years have registered a number of significant developments under this new strategy.  Bell Labs has announced its intention to set up a major R&D centre at Lucent Technologies’ Dublin facility, linked with the establishment of a collaborative academic centre at one of the city’s universities. Similarly, Hewlett-Packard announced the establishment of a world-class Technology Development Centre at its manufacturing facility outside Dublin, while its European Software Centre entered into collaboration with NUI-Galway in establishing the Digital Enterprise Research Institute.  Intel has established an innovation centre at its main site outside Dublin and increased its investment in its research centre near Limerick.  It has also partnered three Irish universities in an academic Centre for Research on Adaptive Nanostructures and Nanodevices.  IBM over the same period announced significant investments in its R&D software facility in Dublin – a decision influenced, according to one of the company’s directors, by the availability of the necessary skills, the strong support of the IDA and the increasing role of SFI.  A number of similar investments have also appeared recently in the biotech and pharmachem areas.

Conclusions

Ireland’s success in attracting FDI can be ascribed to the following factors:

  • EU membership, macroeconomic stability, Western European governance standards and an English-speaking environment
  • a low corporation tax rate
  • the skills and experience of the country’s Industrial Development Agency (IDA)
  • the quality of the telecommunications infrastructure, and
  • an educational system that is integrated to a large extent with the country’s FDI-oriented development strategy.

As one of the first countries in the world to adopt an FDI-focused development strategy (in the late 1950s), the country has had an extensive period of time to fine tune its policies and institutions in line with the requirements of international FDI. This has allowed it to continue to succeed as FDI flows into Europe have shifted progressively from traditional to higher-tech manufacturing sectors through services offshoring and more recently into the offshoring of R&D functions.

Though a late starter – by Western European standards – in increasing educational throughput, Ireland by 1981 had, after the Netherlands, the highest proportion of third-level students taking sub-degree courses.  This was a relatively inexpensive option for the country for follow, a strategy arguably justified in the case of a relatively poor European country.  By international standards tertiary enrolments were heavily biased towards science and engineering, which accorded with the requirements of the MNCs that the country was trying to attract.  As convergence on Western European living standards was progressively achieved and as offshoring of R&D has grown, the emphasis has increasingly switched towards university and postgraduate education.

As shown in the appendix, the country’s IDA has also functioned effectively as a learning organisation through its transnational strategic networks. The strong focus on the importance of FDI in Ireland and the position of the IDA in the policymaking hierarchy ensure that the system is configured to respond rapidly to emerging market opportunities as well as changing factor-market conditions in Ireland.

One example, discussed earlier, concerns the pace of response to the looming disparity, once recognised, between electronics graduate outflows and the IDA’s demand projections for such graduates. Another example is provided by the response to an EU Directive in the 1980s which allowed financial services companies, once established and registered with the regulatory authorities of one EU member state, to operate in any other member state. The directive freed firms to locate in countries where they found the regulations to be most favourable. Ireland was the second country after Luxembourg to implement the directive, in 1989. In addition the authorities decided to forego VAT and inheritance taxes on certain investment fund activities and two further items of legislation were enacted in 1990 to facilitate the development of investment funds. The industry’s activities in Ireland expanded dramatically in response and by 2005 the country had become one of the world’s leading locations for the domicile and administration of investment funds (Barry, Thebault and Wojcik, 2006).


Ireland Vol.6 (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. …

p8

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

p9

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’.

p.10

…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….

p11

… 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…

p12

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

p13

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.

p14

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 short-term) .

Fourth, if the social partnership agreements underpinned the exchange rate policy, the reverse is also true: adherence to the ERM narrow band (and transition to EMU) guaranteed low inflation to such a degree that unions were willing to enter three-year wage agreements.

Adopting this approach, Ireland has made major advances in economic management and economic performance. In particular, consensus on this long-run strategy has taken the exchange rate, and therefore inflation, outside day-to-day party political competition and industrial relations conflict. This can be contrasted with an approach in which short-termism rules in economic policy, business decisions and wage setting. It has led, in the UK, to short bursts of fast economic growth, followed by deep recessions imposed in order to reduce inflation. Ireland’s experiment since 1987 has, for the first time in its history, partly inoculated it against the strikingly unsuccessful combination of macro policy and income determination pursued in Britain for many years. Ireland has finally escaped the most negative effects of Britain’s political business cycle and, in the process, has also rejected the neo-liberal approach to social policy and regulation adopted in Britain between 1979 and 1997. As a result, it has preserved a higher level of social solidarity, which seems an essential pre-requisite to sustaining redistributive policies and addressing issues of structural change and reform in a nonconflictual way.

While Ireland’s remarkable economic performance in the past decade is an interesting case of macroeconomic adjustment, industrial strategy and European integration in a small member state, it is also an intriguing case of social and political concertation. How should we interpret the emergence, success and persistence of social partnership in Ireland since 1987? While it is clearly tempting to see it as a version of ‘neo-corporatism’, there are several difficulties with this view. Within Ireland, there is an interesting debate on the correct way to characterise and interpret the development of social partnership since 1987. Perhaps the most compelling interpretations are those which have emerged within the partnership process itself, in response to perceived difficulties and opportunities.

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Industrial sociologists have raised important questions about the potential of corporatist governance in Ireland. Hardiman compared the Irish centralised pay bargains in the 1970s with the patterns of neo-corporatist ‘political exchange’ in Austria, Sweden and Norway. Important conditions which facilitated concertation in those countries—such as a dominant social democratic party, cohesive employers’ organisations and a trade union movement with a high degree of authoritative centralisationwere not met in Ireland. Thus, her study explained the limited success of national agreements from 1970 to 1981 and raised doubts about the potential for future development. Her doubts were shared by some other students of industrial relations, who dispute that the current Irish experiment can be viewed as social corporatism, arguing that the trade union elite agreed to a program of severe measures to adjust the Irish economy, first to fiscal crisis, and then to European integration. In addition, it was pointed out that social partnership at national level is weakly reflected in workplace industrial relations.

There can be no doubt that structures and procedures which sustain national tripartite arrangements were weak in Ireland when compared with the classical neo-corporatist models.  However, developments since 1987 strongly suggest that this may not preclude the development of a significant form of social partnership. The trade union movement has entered four agreements covering a wide agenda—including pay, taxation, social policies, public finance management and the Maastricht criteria. The partnership approach has prompted important institutional developments—particularly the establishment of a central monitoring system—that have improved the effectiveness of tripartite concertation and that go some way to overcoming the indecisiveness and clientelism which can arise within the Irish party system. Unlike the 1970s, the agreements of the 1980s and 1990s have been based on a shared understanding of the problems facing the Irish economy and society and the main lines of policy required to address them. While the Irish case involves an unusual balance between national-level and enterprise-level partnership, Partnership 2000 has given rise to a potentially significant initiative on enterprise-level partnership.

In any case, comparison with the classical, Northern European, neo-corporatist cases may have lost some of its relevance. International developments suggest some revision of traditional ideas on both the conditions for and the nature of neo-corporatism. It seems more relevant to compare the Irish experiment with approaches to social concertation in other European countries in recent years, rather than the heyday of post war neo-corporatism. This suggests that we can compare alternative approaches to the policy problem of the late 1980s and 1990s—how to control inflation and maintain social cohesion in the context of deepening European integration and intensified international competition—rather than the policy problem of the post-war golden age. Despite the rhetoric of the 1980s, it does not seem useful to compare countries in traditional terms, such as ‘state versus market’ and ‘centralised versus decentralised’ bargaining. As (Colin?) Crouch suggests, the concepts of institutionalization/de-institutionalization, encompassingness, social partnership and co-ordination, are more useful than the contrast between ‘state-imposed incomes policy’ and ‘free collective bargaining’, and between ‘state control’ and laissez-faire.

The Irish approach has been encompassing in two senses: it encompassed a large enough proportion of the economic actors to produce low inflation and increased competitiveness; and it encompassed

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enough of the things that concern these actors—prices, pay, taxation, welfare and social provision—to make the overall strategy coherent. The Irish approach bears some similarities with other cases: as in Germany, there is a de-politicisation of exchange rate policy, combined with a politicisation, or at least institutionalization, of other policy areas; it bears some similarities to the emergency packages undertaken in Belgium, the Netherlands and the Nordic countries; it may, also, involve some ‘social promotion’ of trade unions, in pursuit of wider social goals, such as occurs in Spain, Italy, Greece, Portugal and France. However, an emphasis on encompassing organisations does not fit well with the Irish attempt to widen social partnership beyond the traditional social partners.

A comparative approach has also been used to throw light on the unusual features—some say weaknesses—of the Irish experiment. Traditionally, the most successful approaches to coordination—in Germany, Austria and Switzerland—involve similar macroeconomic policies, but with less reliance on centralised, and particularly state-led, incomes policy. These countries are notable, less for national pacts than for a rich institutional framework that links company-level market sensitivity and flexibility with coherent national-level behaviour. A key challenge facing Irish social partnership is to address the weakness of indigenous Irish enterprises and the problems of long-term unemployment and social exclusion. It is now recognised that this requires institutional developments below the central level at which the social partners and the state have recently developed expertise in dialogue and negotiation. But it is no longer clear that the institutional arrangements in the once-successful continental countries provide a model which Ireland should follow. Indeed, considerable institutional innovations have been undertaken in Ireland—in policies addressing long-term unemployment, rural and urban re-generation and business development—and it is possible that these, however unorthodox, are more suited to current economic, organisational and technological circumstances.

In order to develop social partnership, and make it more inclusive, it has been necessary to analyze the nature, purpose and goals of the partnership approach itself. In its 1996 report, Strategy into the 21st Century, NESC offered the following characterisation of social partnership, as it has developed in the past decade:

  1. The partnership process involves a combination of consultation, negotiation and bargaining.
  2. The partnership process is heavily dependent on a shared understanding of the key mechanisms and relationships in any given policy area;
  3. The government has a unique role in the partnership process. It provides the arena within which the process operates. It shares some of its authority with social partners. In some parts of the wider policy process, it actively supports formation of interest organisations;
  4. The process reflects inter-dependence between the partners.
  5. Partnership is characterised by a problem-solving approach designed to produce consensus, in which various interest groups address joint problems;
  6. Partnership involves trade-offs both between and within interest groups;

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  1. The partnership process involves different participants on various agenda items, ranging from national macroeconomic policy to local development.

A distinction can be made between two conceptions, or dimensions, of partnership: Functional interdependence, bargaining and deal making; Solidarity, inclusiveness and participation.

Effective partnership involves both of these, but cannot be based entirely on either. To fall entirely into the first could be to validate the claim that the process simply reflects the power of the traditional social partners, especially if claims for the unemployed and marginalised are not included in the functional inter-dependence, and are seen as purely moral. To adopt a naive inclusivist view would risk reducing the process to a purely consultative one, in which all interests and groups merely voiced their views and demands. While these two dimensions are both present, even together they are not adequate.

There is a third dimension of partnership, which transcends these two. Although the concepts of ‘negotiation’ and ‘bargaining’ distinguish social partnership from more liberal and pluralist approaches, in which consultation is more prominent, they are not entirely adequate to capture the partnership process. Bargaining describes a process in which each party comes with definite preferences and seeks to maximize its gains. While this is a definite part of Irish social partnership, the overall process (including various policy forums) would seem to involve something more. Partnership involves the players in a process of deliberation that has the potential to shape and reshape their understanding, identity and preferences. This idea, that identity can be shaped in interaction, is important. It is implicit in NESC’s description of the process as ‘dependent on a shared understanding’, and ‘characterised by a problem-solving approach designed to produce consensus’. This third dimension has to be added to the hard-headed notion of bargaining (and to the idea of solidarity) to adequately capture the process.

The final element in this argument is that there are limited pre-conditions for effective social partnership of that sort. The key to the process would seem to be the adoption of ‘a problem-solving approach’. As one experienced social partner put it, ‘The society expects us to be problem-solving’.

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A notable feature of effective partnership experiments is that the partners do not debate their ultimate social visions. This problem-solving approach is a central aspect of the partnership process, and is critical to its effectiveness. This suggests that rather than being the pre-condition for partnership, consensus and shared understanding are more like an outcome. It is a remarkable, if not easily understood, fact that deliberation which is problem-solving and practical produces consensus, even where there are underlying conflicts of interest, and even where there was no shared understanding at the outset. It is also a fact that using that approach to produce a consensus in one area, facilitates use of the same approach in other areas. The key may lie in understanding what kind of consensus is produced when problem-solving deliberation is used. It is generally a provisional consensus to proceed with practical action, as if a certain analytical perspective was correct, while holding open the possibility of a review of goals, means and underlying analysis. This type of agreement certainly involves compromise. But the word compromise is inadequate to describe it. ‘Compromise’ so often fudges the issues that need to be addressed.

This view, that there are limited pre-conditions to social partnership, is then combined with observation of three trends which demand a further revision of conventional ideas of neocorporatism.

The nature and role of social partners is changing, in ways that require a new view of what a social partner is now. The traditional characteristics of partners in neo-corporatist systems—social closure’ (monopoly representation of a given social group), a functional role in the economy (preferably in production), centralised structures for representing and disciplining members —seem to be losing their relevance. Organizations cannot take for granted their role as representatives of a given group, with defined and stable roles. They must continually mobilize, co-ordinate and provide services. While success traditionally depended on power resources, information is the key resource that a modern social partner brings to the table. In the place of the old form of bargaining, there are new forms of public advocacy: analysis, dialogue and shared understanding. The role of representation has weakened. Mobilizing, organizing and solving problems (with others) are the feature of effective social partners.

We are also witnessing an historical shift in the role of the center and national government. The complexity, volatility and diversity of economic and social problems, and of social groups, is undermining the ability of central government to allocate resources, direct the operation of departments and agencies, and administer complex systems of delivery and scrutiny. These traditional center roles are being replaced by new ones: policy entrepreneurship, obliging and assisting monitoring, facilitating communication and joint action between social interests, protection of the non-statutory organizations that now have responsibility in many policy spheres, and supporting interest group formation. Traditional conceptions of neo-corporatism seem premised on an outdated view of the power, autonomy and effectiveness of central government.

The relationship between policy making, implementation and monitoring is changing, in ways which place monitoring, of a new sort, at the center of policy development.  For a variety of reasons, national-level partnership, which focuses on national-level policy-making, is unlikely to solve the complex and diverse problems which citizens confront. What is required is examination of practical successes and failures, which is used to revise both the methods and goals of policy. This demands

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a new fusion of policy-making, implementation and monitoring. If the institutional arrangements to achieve this can be found, it seems unlikely that the social partners will play their conventional neocorporatist role as representatives to the same extent.

This discussion of the nature and preconditions of social partnership, when combined with the three trends outlined above, provide a new view of social partnership as it is developing in Ireland. In particular, the categories and ideas found in earlier studies of classical North European neocorporatism seem inappropriate in understanding the Irish experiment. Indeed, it is possible that the Irish case might assist the formulation of a new concept of post-corporatist concertation, as it is emerging in several European countries.

Conclusion

Four strands of policy development have been reviewed: macroeconomic stabilisation, industrial policy, European integration and social partnership. None of these is entirely resolved, and none entirely understood. The nearest to resolution is the macroeconomic, the long transition to EMU being almost complete; though UK adoption of the euro is necessary for Ireland to make permanent its approach of the past decade: economic policy without macroeconomics. The least well understood is industrial policy, and the apparent transformation of Irish business. In seeking more effective policies for indigenous development over the past 20 years, Irish studies drew on various models: the Japanese firm, the industrialization of Korea and other late-developing economies, flexible specialization, the industrial districts of Italy and Germany, the National System of Innovation of successful, small, European countries, Porter’s clusters and the networks of resurgent Danish and other regions. Now that some competitive success is emerging, it turns out not to conform to any of these models. Consequently, we urgently need to know more about Ireland’s business transformation and how industrial policy works in its relations with enterprises and sectors.

The relevance and interaction of the four strands of policy is not in doubt. All four figure in any tentative explanation of Ireland’s success of the past decade.

First, after 1987, Ireland achieved consensus—across both the social partners and the political parties—on the requirements for successful participation in the European economy and on the view that there was no way of escaping these requirements.

Second, Ireland achieved a high degree of wage co-ordination; in Ireland’s case, this was done by means of centralized bargaining, which relied primarily on a cohesive trade union movement and strategy.

Third, Ireland achieved a sufficient degree of consensus on public finance. This was necessary not only because of the Maastricht criteria but, more fundamentally, because of the way in which taxation and public provision interact with both wage bargaining and the exchange rate.

Fourth, Ireland (in its European context) had a set of supply-side characteristics that ensured international competitiveness and encouraged fast economic growth. These included a young, well-educated, English-speaking workforce, improved infrastructure (funded by both the EC and the Irish state), an inflow of leading US enterprises (attracted by both Irish conditions and the deepening European market), a new population of Irish enterprises (free of the debilitating weaknesses of the past and open to new organizational patterns), and deregulation of the service sectors (driven by the ‘1992’ process).

The complex interaction of domestic and international factors is clear. The common thread, the underlying transformation, is a switch from a long history in which external factors were constraining, to a new situation in which the external environment provides valuable inputs and even its undoubted constraints can be used as opportunities. It seems that European integration has transformed Ireland’s relation to its international environment, and social partnership has transformed its internal ability to mediate interests and adhere to coherent strategies.

It is remarkable, but clearly no coincidence, that the opponents of one are also opponents of the other. Their opposition, negligible in policy terms but influential in academia and the media, is both to the substance of the prevailing consensus and to the idea and value of consensus itself—and, most of all, to the proposition that, in the circumstances of the past decade, these two interact. Yet those who achieved Ireland’s transformation have little doubt that closing-off macroeconomic alternatives freed management, trade union and government energies for discussion of real issues that impact on competitiveness and social cohesion—corporate strategy, technical change, training, working practices, the commercialization and/or privatization of state-owned enterprises, taxation, public sector reform, local re-generation, active labor market policy—and forced all to engage in realistic discussion of change. They sense, even if they cannot say, that this approach was particularly liberating in a country whose political system tended to clientelism, whose enterprises had grown used to direct and indirect protection and whose trade union movement had developed in the British adversarial tradition.


Ireland Vol.5 (Manifestos 2016 of Fianna Fáil, Sinn Féin and Labour Party)

Here are manifestos in February 2016 of the current Irish opposition parties. Excerpts are on our own.

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An Ireland for all. Manifesto 2016 [PDF] | Fianna Fáil (The Republican Party)

[Fiscal Responsibility Commitment] p.2

[Our Four Core Priorities] p.3
1. Create decent jobs & support enterprise
2. Cut family costs & improve the services they rely on
3. Tackle crime & develop community services
4. Secure home ownership & tackle homelessness

[What our Priorities mean for you at each stage in your life] p.4-5
A fair start in life
The best education
Getting a decent job
Securing a home
Support with the quality & cost of living
A vibrant and safe community to live in
An independent retirement

[1. Create decent jobs & support enterprise] p.10-11
Help SMEs & Balance Regional development
Advance Science & Research
Support the Self-Employed

Bridge the Digital Divide across Ireland p.24-25
(i) Undertake a national mobile phone coverage audit
(ii) Launch a National Mobile Phone Infrastructure Plan
(iii) Secure Universal Fibre to the home broadband across Ireland
(iv) Develop Regional Digital Hubs

Secure a fair price for farmers & a successful Agri-Food Sector p.26-30
(i) Establish a national Food Ombudsman and work for new fair price legislation at EU level
(ii) Reform the inspections system
(iii) Restore Farm Assist and the Rural Social Scheme
(iv) Enhance and reform the Beef Genomics Scheme
(v) Introduce a new Primary School Farm Safety Programme
(vi) Roll out an “Island of Ireland” suckler beef label
(vii) Set up a Market Access unit in the Department of Agriculture
(viii) Fully Realise Food Harvest 2020 and Food Wise 2025
(ix) Encourage the next generation of farmers
(x) Use RDP underspend to increase payment under the Areas of Natural Constraints scheme
(xi) Review market intervention tools for the Dairy sector
(xii) Secure a strong Fisheries sector
(xiii) Secure Ireland’s place as the global leader in the Equine industry

Protect our Corporate Tax Rate & re-build the Eurozone p.31-32
(i) Protect and fully maintain our 12.5% Corporate Tax Rate
(ii) Rebuild Economic and Monetary Union to prevent a future crisis
(iii) Strengthen Banking Union
(iv) Fight for fairness on Bank-related debt
(v) Support a more substantial Fiscal and Transfer Union
(vi) Create a Rainy Day Fund

[2. Cut costs for families & improve the services they rely on] p.36-37
Reduce the cost of living
Lower childcare costs and help working parents
Create a fairer welfare system
Tackle big class sizes and create an education system for all
Support a publicly funded health care system
Reform the Public Sector

[3. Tackle crime & develop community services] p.70-71
Keep homes and communities safe
Establish a Community Services Guarantee for all citizens
Create a “Pathway to Inclusion” for people with a disability
Revitalise Irish town centres, cities & our capital
Improve the road network and protect public transport
Give local people power over local decisions

Build a strong all Ireland community p.98-102
(i) Establish a Border Economic Development Zone to foster growth in the border region
(ii) Launch Intertrade Ireland, IDA, Invest NI Joint Initiatives to attract international investment
(iii) Develop the Eastern Corridor in the new National Spatial Strategy
(iv) Secure funding for the complete development of the A5
(v) Build the Narrow Water Bridge
(vi) Increase shared Health Services
(vii) Build Education links with Dundalk and Letterkenny IT as well as opening up universities to more students from across the border
(viii) Increase Public Transport links
(ix) Work to prevent Brexit
(x) Facilitate specific Northern representation in the Seanad
(xi) Allow all Irish citizens Presidential Votes
(xii) Tackle sectarianism
(xiii) Develop the Cross Border Crime Agency

Ensure Ireland is a strong voice in the global community

[4. Secure home ownership & tackle homelessness] p.110-111
Strengthen the Right to Own p.112-113
(i) Introduce a First Time Buyers Saving Scheme for 80,000 New Buyers
(ii) Retain the Mortgage Interest Relief scheme
(iii) Tackle mortgage arrears and variable mortgage rates
(iv) Develop Credit Union Mortgage Lending

Build for families by investing in 150,000 new homes by 2021 p.114-115
(i) Establish a new Minister for Housing, Planning & Local Government
(ii) Create a National Home Building Bond (NHBB)
(iii) Encourage Residential Development in Town Centres
(iv) Strengthen the right to live in rural Ireland
(v) Increase the supply of family homes
(vi) Revise Density Levels
(vii) Introduce ‘use it or lose it’ automatic planning permission zonings

Create Homes for all by building 45,000 new Social Housing Homes p.117-119
(i) Start a new €5.4bn Home Building Programme
(ii) Restore Part V in full
(III) Develop Housing Associations Finance
(iv) Create NAMA Transfer Units
(v) Introduce a new Vacant/Derelict Home Refurbishment Scheme
(vi) Create a new Green Deal

Help Generation Rent p.120-122
(i) Establish Family Tenure to strengthen security for families and long term tenants renting their homes
(ii) Delivering affordable rent units for key workers
(iii) Improving quality of accommodation with a Local Authority Quality Certificate
(iv) Strengthen tenant rights and implement rent certainty measures
(v) Overhaul the PRTB

Eliminate long term Homelessness by 2021
Establish an Independent Living Contract for older people

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For A Fair Recovery – Níos fearr le Sinn Féin – Sinn Féin Manifesto General Election 2016 [PDF]

[Executive summary of measures] p.6-9
~ For a Fair Recovery ~
Bringing fairness to the tax system
■ We will abolish the Local Property Tax, saving 1.8 million homeowners an average of €244 per year.
■ We will scrap Water Charges, saving a family of two adults €260 per year.
■ We will make the tax system progressive by removing workers earning under €19,572 from the USC net, benefiting 277,000 employees.
■ We will ease the tax burden on the self-employed, moving towards the equalisation of the Self-Employed Tax Credit with the PAYE Tax Credit.

All-Ireland economy
■ We will have a planned approach to economic development across the island of Ireland, including one tax system and one currency.
■ We will create a Border Economic Development Zone to harmonise trade and maximise returns for border businesses.
■ We are committed to the A5 funding package as set out in the Fresh Start Agreement and to ensuring the Narrow Water Bridge project is completed.

A proper banking system
■ We will not be rushed into the sale of any State asset. The decision to sell any stake in Permanent TSB, Bank of Ireland or AIB must be based on the best interests of the Irish people in the long term.
■ We will immediately carry out a review of Credit Union regulations and look at lending restrictions, savings caps and restrictions on the types of investments and services Credit Unions can offer, including what more the sector can do to help develop small businesses.

~ Our plan for public services and quality of life ~
Building more houses
■ We will launch plans for 2030 – Project 100,000 to bring State ownership of housing stock to a minimum of 200,000. This will ensure a build of at least 70,000 social units and at least 30,000 cost purchase and cost rental housing units by 2030.
■ We will commit €5 billion (A cumulative €2.2 billion more than the government’s commitment) in capital spending in 2016-2021 and strengthen Part V to ensure the delivery of 36,500 social and affordable houses.
■ We will review all property-related tax reliefs that encourage speculation for profit.
■ We will re-examine urgently the practice of capping rent subsidies – simultaneous to the introduction of rent regulations, to ensure rents demanded by landlords do not escalate to meet any increase in the rent cap.
■ We will create rent certainty by linking rent increases to inflation.
■ We will make an additional €30 million available to local authorities and homelessness agencies in year one of government to house the homeless in emergency accommodation.
■ We will empower the Central Bank to set caps on mortgage interest rates chargeable by banks.

~ A new deal for rural Ireland ~
Addressing the imbalance
■ We will introduce a Rural Equality Bill to provide for carrying out rural impact assessments where measures affect rural areas.
■ We will develop a new enterprise spatial strategy to orientate infrastructural development and IDA and Enterprise Ireland development in a balanced regional manner.
■ We are committed to keeping open post offices, libraries, garda stations and other services that connect people with their local towns.
■ We will make up the shortfall in cuts to the Leader funding at EU level.
■ We will strive to ensure all householders and businesses have access to a minimum broadband speed of 100 Mbps.
■ We will introduce a pilot scheme for rural resettlement. This will provide a relocation package of up €5,000, including return flights for qualifying emigrant families to return to rural Ireland.
■ We will increase funding for the rural transport programme and provide a funding package for improving the condition of rural roads.
■ We will restore funding to local authorities for the LIS community involvement scheme for non-council roads.
■ We will ensure the retention of domestic turbary rights for families in the West of Ireland who cut turf to heat the family home, as has been part of Irish tradition and heritage for centuries.

A good deal for fishing and coastal communities
■ We will repeal the current penalty point system that criminalises fishermen and devalues their business.
■ We will fight for an adequate quotas and ensure their fairer distribution amongst Irish fishermen.
■ We will oppose further cuts to the European Maritime and Fisheries Fund, which exists to give financial assistance to coastal communities and the fishing industry.
■ We will pursue at a European level restrictions on factory vessels and super-trawlers in Irish waters.
■ We will negotiate a reform of the Common Fisheries Policy and related legislation to simplify regulations and put an added emphasis on development in coastal communities.

Fairness for farmers
■ We will implement the Charter of Rights for Farmers so that direct payments and farm schemes can be delivered to farmers efficiently and speedily.
■ We will establish a €12 million compensation fund for Hen Harrier designated conservation lands.
■ We will maintain the concept of income averaging for taxation purposes to compensate farmers for extreme income volatility.
■ We will work for the simplification of the Beef Data Genomics Programme to encourage wider uptake.
■ We will publish clear guidelines for farmers applying for Areas of Natural Constraint payments to avoid the lengthy waiting period thousands of farmers endured in 2015.
■ We will continue to oppose the proposed Transatlantic Trade and Investment Partnership (TTIP).
■ We will establish an all-island agri-food label for Irish produce.
■ We will reintroduce the Groceries Order with immediate effect to combat below-cost selling of products to ensure fair prices for producers.
■ We will restore €5 million of Farm Assist and create an additional 500 places on the Rural Social Scheme, expanding the current number of scheme places by 20%.

[Five years of Fine Gael and Labour chaos and broken promises] p.10
~ Chaos in Health ~
■ 601 patients on trolleys on one day alone.
■ 4,154 fewer nurses in the public health system.
■ 68,824 patients waiting for inpatient treatment.
■ 385,507 patients waiting for a hospital outpatient appointment.
■ 20% of people with absolutely no medical cover.
■ €159 million cut from the budget for disability services.
■ Only one in three cases, classified as serious, reached within the target time by the National Ambulance Service.

~ Chaos in Housing ~
■ 1,500 – the number of children sleeping in emergency accommodation every night.
■ 89,872 – the number of households on Local Authority waiting lists.
■ 92,291 – family homes in mortgage arrears in the 3rd quarter of 2015.
■ €1,358 – the average monthly rent in Dublin, with people paying on average over €1,000 in the rest of the State.
■ 1.8 million – the number of households paying an average of €244 a year in property taxes.
■ €2,000 – what a 1% reduction would save on average in annual interest payments for a family with a €200,000 mortgage if the government had taken action on interest rates.
■ €340 million – the subsidy paid by the State per annum to private landlords to house rent supplement recipients.

~ Chaos in Families ~
■ 200,000 – the number of young people who have emigrated since 2010.
■ 1.5 million – the number of home-help hours slashed.
■ €120 – the annual amount cut from the fuel allowance for the elderly and most vulnerable.
■ €36.80 – the amount slashed from the weekly invalidity pension for 65-year-olds.
■ €4,000 – the annual amount of money saved per garda station closed by this government. They shut down 139 stations.
■ €800 to €1,100 – the monthly cost of childcare for one child.

~ And through it all, they protected the Golden Circle ~
■ €156,380 – how much Enda Kenny pays his special advisors, breaching his own pay caps.
■ €12,000 – how much the Taoiseach will pocket through the abolition of the USC.
■ 250 – the number of individuals who saw their wealth increase by 16% to €75 billion in 2015.
■ €11 million – how much NAMA spent in wages for property developers in one year. Fifteen were paid between €150,000 to €199,000 per year.

[Balance sheet] p.11
[CASE STUDIES] p.12-13
[Part 1 – Better for Ireland] p.25-
[Part 2 – For a fair recovery] p.33-
[Part 3 – Improved public services and quality of life] p.43-
[Part 4 – Rural Ireland] p.53-

—–
Standing Up for Ireland’s Future – LABOUR MANIFESTO 2016 [PDF]

1. A STRONG ECONOMY FOR A DECENT SOCIETY
2. STANDING UP FOR WORKING PEOPLE
2.1 A new deal on income tax
p.17: In response to the economic crisis Fianna Fáil introduced the Universal Social Charge. The USC applied to all income provided the individual taxpayer earned more than €4,000 a year. Labour in Government increased this threshold to €13,000 and removed 700,000 taxpayers from the USC net. We have also reduced the rate of USC payable on the first €70,000 of income…
p.18:… The third part of our tax plan is to target additional relief at low and middle income working people, earning between €18,305 and €36,608. In the last Budget, we reduced the burden on low and middle income workers by introducing PRSI relief…

2.2 Improving living standards for working people
2.3 Making homes affordable
2.4 Providing security in retirement
3. STANDING UP FOR JOBS & OPPORTUNITY
3.1 A job for everyone who wants one by 2018
3.2 A skills revolution

3.3 Support for start-ups and small business
p.37:… The State currently owns 15% of Bank of Ireland, 99% of AIB, and all of Permanent TSB. We will proceed as planned with the planned disposal of 25% of AIB shares this year and will also initiate a strategic review of the Irish banking system… Within the Ireland Strategic Investment Fund we will create a €1bn dedicated Green Infrastructure Fund to invest in clean public transport and energy efficiency projects. This will be funded by €500m from the proceeds from the sale of bank shares, combined with private sector leveraging…

3.4 Bringing the recovery to every corner of Ireland
p.40 : Labour in government has prioritised balanced regional development and the rural economy. Our leadership on the implementation of the Commission for the Economic Development of Rural Areas (CEDRA) report and the Rural Economic Development Zones (REDZ), injected nearly €4 million into our rural economy. The Regional Action Plans for Jobs have been rolled out and we have delivered funding of €250 million for LEADER programmes in rural communities between 2014 and 2020. Our National Broadband Plan will deliver universal high-speed broadband access by 2020. We have delivered a thriving tourism sector through the introduction of the 9% VAT rate and scrapping the Air Travel Tax, The Gathering initiative, the development of the Wild Atlantic Way, Ireland’s Ancient East and more cycling greenways…

3.5 Investing in infrastructure
p.46: Labour in government launched a capital investment plan worth €17 billion in 2012, and in 2015, we launched a follow-up, six-year plan worth €42 billion. That plan represents over 3.5 percent of GNP each year between 2016 and 2021, and it will support more than 45,000 construction-related jobs.

3.6 Growing the green economy
p.50:… Labour in government enacted the State’s first climate change legislation and we have published a White Paper with ambitious proposals on the future of energy security and supply. We created a national mitigation plan to reduce emissions and a national adaptation plan to address the symptoms of climate change.
The 2015 Energy White Paper sets out a path to transform Ireland’s energy system. Our vision places citizen engagement at the heart of our energy future and its implementation. Over the next five years we will take the steps needed to make that transformation happen. In particular, we will encourage an increasing role for smaller, community-level renewable energy projects. As part of this, we will facilitate grid access for small-scale renewable energy projects. …

4. STANDING UP FOR FAMILIES & COMMUNITIES
4.1 Making all schools fit for the digital age
4.2 Quality childcare affordable for everyone
4.3 A new National Community Health Service
4.4 Improving quality of life in our communities
4.5 An age-friendly society
4.6 Independent living for people with disabilities
4.7 Action on child poverty
5. STANDING UP FOR A MODERN IRELAND
5.1 True equality for all
5.2 Law reform
5.3 Opening up government and empowering citizens
5.4 Constitutional change
5.5 Arts, culture and heritage

5.6 An active role in the world
p.119-120:… The Political Union and engagement with EU citizens must be strengthened. Labour wants to see a more effective role for national parliaments. We support a strengthening of the “yellow card” procedure, whereby national parliaments can question the merit of proposed European legislation, and the trialling of a “green card” procedure, where a number of national parliaments can come together to propose legislation at a European level.
The EU must also strengthen its response to the migration crisis and provide further relocation and resettlement of refugees. It must also provide greater assistance to bring peace and stability to war-torn countries in the region.
We will support social democratic efforts to reform the investor state dispute resolution mechanism within the Transatlantic Trade Investment Partnership. In this way we can ensure that member states enjoy benefits of free trade with North America, without running the risk of undermining our essential consumer protections.
We believe that it is in Ireland’s interests and in the interest of the EU as a whole that the United Kingdom should remain as a full and positively engaged member of the Union.
We will facilitate the negotiations with the UK insofar as it lies within our power to do so, provided that any negotiated arrangement with the UK does not infringe on the fundamental values and cornerstones of the Union. We will oppose any arrangement which serves to erect, whether by design or otherwise, barriers of any kind between Ireland and Northern Ireland.
We will work with our sister parties in the Party of European Socialists, including the British Labour Party, to ensure that the threat of UK exit is not exploited by conservative or xenophobic parties who might seek to weaken standards of workers’ rights, consumer protection, environmental law and the basic rights and protections guaranteed by the treaties to EU citizens.
Labour is committed to a strong all island economy and society. As we enter into a decade of commemoration in 2016, Labour wants to commence a national conversation about the future of our island and within it our many diverse communities.
This new national conversation must explore the potential for greater co-operation in developing our common languages, our many sporting and artistic organisations, increased interaction at local authority level and between state agencies.
Labour continue to support the Good Friday Agreement and the institutions created under it and we will press for the full implementation of the Stormont House Agreement to deal with outstanding issues and for securing agreement on key issues among the parties in Northern Ireland. …

6. LABOUR’S ECONOMIC PLAN & COSTINGS
p.123: Our Proposals
• Balance the budget and reduce our national debt to 75% of GDP by 2021
• Invest €3 in services for families and communities for every €1 reduction in tax
• This means that we will invest an additional €8.368bn in the services families and communities need and reduce tax by €2.866bn for low and middle income earners. …

Macro economic forecasts
p.124:… Labour is committed to tackling the national debt. EU fiscal rules require us to reduce our debt to GDP ratio by 1% a year over the lifetime of the next Government. However, we propose to achieve this at a faster rate of 3%, in order to get the debt ratio back to 75% or below by 2021. …

A balanced budget

Sustainable national debt p.125-126
Labour’s economic plan p.127

Improving living standards for working people
Investing in the services families & communities need


Ireland Vol.4 (Manifesto 2016 of Fine Gael – Irish ruling party since March 2011)

Here is Fine Gael’s manifesto in February 2016. After the eletion, the party formed a minority government. Excerpts are on our own.
@FineGael GENERAL ELECTION MANIFESTO 2016 – LET’s KEEP THE RECOVERY GOING [PDF]

[The Long Term Economic Plan – Three Steps to Keep the Recovery Going] p.9-10

[Agriculture and Food] p.13-15
By 2025, we will deliver:
• An increase in value of exports by 85% to €19bn
• An increase in value added by 70% to €13bn
• An increase in value of primary production by 65% to almost €10bn
• The creation of a further 23,000 jobs in the agri-food sector

Farm Gate Investment: Fine Gael has committed €4bn to on-farm investment through the Rural Development Programme (RDP). Schemes like GLAS, TAMS, the Beef Data and Genomics Programme, locally led environmental schemes, knowledge transfer programmes, horticulture, organics and Areas of Natural Constraint are being rolled out as a priority…

Beef:… The Beef Data and Genomics Programme will spend over €300m on modernising and improving efficiency in the beef herd as well as supporting farm incomes. This, in tandem with the introduction of a framework for producer organisations and knowledge transfer schemes (discussion groups), will support farmers in increasing efficiency and profitability.

Dairy: The abolition of milk quotas continues to represent the biggest opportunity for the Irish dairy sector and, as markets stabilise, Fine Gael will ensure that Irish producers are best placed to benefit from this, on the back of prudent investment. We will continue to convene a dairy forum to manage growth, ensure sustainability and address challenges within the sector. Fine Gael has invested heavily in the future of this sector through supports for processors expanding their enterprises, and this is being matched by on-farm capital investment through TAMS and knowledge transfer schemes. We have also supported farmers through the recent period of market volatility with a €25m compensation fund. We will also encourage the establishment of a futures market for dairy produce and encourage price stabilisation tools to combat price volatility.

Sheepmeat: Developing the sheep sector is a key focus of the Food Wise 2025 strategy. We will improve efficiency and profitability in the sector through the knowledge transfer programme (discussion groups). We will further support sheep farmers through GLAS, the Areas of Natural Constraint scheme and TAMS…

Poultry:…
Pigmeat:…

Horticulture: We recognise the importance of the horticulture sector and will continue to prioritise capital investment for development in this area. We recognise the potential to grow the output value of this sector to over €500m in the medium term and will deliver on the actions in the Food Wise Strategy to achieve this target. We are conscious of the need to safeguard this sector from potential unfair practices in the grocery sector and will monitor the impact of new legislation in this area in that context.

Forestry: The role of forestry in the effort to mitigate against climate change is very significant. Fine Gael will implement the Forestry Programme 2014-2020. The programme targets an increase in planting each year over the lifetime of the programme, commencing with 6,000 ha of new forests in year one, increasing to 8,290 ha in 2020. The programme will aim to build on research by COFORD on the eligible land considered suitable for forestry across the country.

[Economy, Public Finances and Taxation] p.43-44
Corporation Tax: Fine Gael defended our corporation tax regime throughout the financial crisis and we are committed to maintaining the 12.5% rate into the future…

Capital Gains Tax Relief for Start-Up Companies:…Gains arising on chargeable business assets acquired from 2017 and held for 5 years will be charged at a rate of 10% on disposal, up to a maximum liability of €10m.

[Housing] p.73-74
Framework to Support Mortgage Holders in Arrears:…Fine Gael wants to keep people in their homes and, building on the progress which has seen the number in mortgage arrears decline for 9 consecutive quarters, we will continue to adapt and strengthen the existing mortgage arrears framework as necessary…

Increasing Home Building: To meet housing demand Fine Gael will support an increase in the annual housing output to a sustainable level of 25,000 by 2021. As part of this goal, we will support NAMA to deliver on their target of 20,000 residential units before the end of 2020.

Investing Strategically: Fine Gael will improve the availability of finance for new home construction, with a €500m joint venture to finance the building of 11,000 new homes through the Ireland Strategic Investment Fund (ISIF)…

[Jobs, Enterprise and Regional Growth] p.78-80
Local Enterprise Offices (LEOs): Enterprise Ireland (EI) will support the LEO network to develop their own capacity and their range of policy tools, to grow their base of start-ups and small businesses…

Export-Led Growth:…government-supported, Irish-owned companies will grow exports by 40%, or €10bn, by 2020, by driving client companies to target new markets, and by increasing the value of sales in existing markets.

Innovating to Drive Growth: Fine Gael will implement Innovation 2020, Ireland’s 5-year strategy for research and development, science and technology. …reaching our overall goal of increasing public and private investment in research and development (R & D) to 2.5% of GNP by 2020. This will amount to an almost doubling of current levels of investment. As part of this, €1.25bn in funding will be drawn down from the EU Horizon 2020 programme…

Smart Regulation:… We will publish new guidelines, taking account of the latest EU and OECD smart regulation practices…

[Local Government and Communities] p.89
Local Enterprise Offices (LEOs): Enterprise Ireland (EI) will support the LEO network to develop their own capacity and their range of policy tools, to grow their base of start-ups and small businesses…

[Northern Ireland, European and Foreign Affairs] p.92-95
Outstanding Commitments: We will support efforts to implement the unfulfilled commitments under previous Agreements, including the establishment of a North-South Consultative Forum; the establishment of a public inquiry into the murder of Pat Finucane; and the promulgation of a Bill of Rights for Northern Ireland.

Ireland-UK Relations: Building on the successful state visits of 2011 and 2014, we will continue to enhance Ireland’s relationship with the United Kingdom, including under the Good Friday Agreement, through the British-Irish Council and the annual summits between the Taoiseach and British Prime Minister. We will strengthen cooperation with all devolved administrations.

Economic Cooperation: Fine Gael pioneered trade missions jointly led by Jobs ministers north and south. …boost economic growth in the North West through the North West Gateway initiative, the upgrading of the A5 road and the further development of the Ulster Canal…

Narrow Water Bridge:…
Atlantic Youth Trust Initiative:…

North South Ministerial Council: …(NSMC) and harness the potential of the Stormont House Agreement to develop new areas of cooperation in areas such as trade, health, tourism, sport and security.

EU Supports: …benefit from EU funding through the INTERREG and PEACE programmes.
Addressing External Threats:…
Effective Institutions:…
UK Membership:…
The European People’s Party (EPP):…
Taxation:…
EU Competitiveness and Growth:…
Trade Missions:…
New Cross-Sectoral Trade Strategies:…
Continuing Reform and Modernisation:…

[Public Sector Reform and Public Procurement] p.105
Better Regulation: We will mandate the Cabinet Secretariat within the Department of An Taoiseach to act as a centre of expertise for, and enforce compliance with, the regulatory impact assessment procedures for all major regulatory and legislative proposals. To promote the better regulation agenda the Taoiseach will also host an annual meeting of economic regulators to discuss ways to promote greater efficiency in the regulated industries.

[Rural Ireland] p.111-114
Local Enterprise Offices (LEOs) (see the Jobs, Enterprise and Regional Growth chapter for further detail):…
Agriculture (see the Agriculture and Food chapter for further detail):…
Technological Universities:…
Rural Transport:…

Community Involvement Schemes (CIS) and Local Improvement Schemes (LIS): We will provide funding for Community Involvement schemes and Local Improvement Schemes, on an annual basis. As part of our commitment to local government reform we will also give councils greater discretion in how they spend their money on local and regional roads.

Greenways (see the Tourism and Sport chapter for further detail): During a second term of government, Fine Gael will build on the success of the development of the Greenway network and establish a central fund for supporting the network across the country. While we will continue to expand the network, we are also conscious of the rights of farmers and landowners and will work with them to ensure that the expansion of the network is beneficial for both users and landowners.

Regional Airports (see the Transport chapter for further detail): We will invest €28m under the Capital Plan for safety and security enhancements across the regional airports. We will also look to establish a fund to assist developing new flight routes from all airports outside of Dublin.

Spreading Growth in Tourism throughout Ireland (see the Tourism and Sport chapter for further detail): During a second term of government we will build on successes such as the Wild Atlantic Way to drive tourism to all parts of the country, in accordance with their potential.

Post Offices:…

[Seafood and the Marine] p.115-116
FOOD WISE 2025 – SEAFOOD
One of the most significant growth areas in our strategy for the agri-food industry, Food Wise 2025, is the seafood sector. With an increase of 37% in seafood exports since 2011 and an estimated 40 million tonnes of seafood required globally by 2030, our target is to increase the share of value-added seafood by 30-50%, maximising the value from our raw material base.
We will invest €24m from the Seafood Development Programme in seafood processing to support investment in capital infrastructure, innovation and business planning, scaling and new market development.

INVESTMENT and LEADERSHIP
Fine Gael has secured an EU co-funded Seafood Development Programme worth €240m, which will be central to achieving our ambition for growth in the seafood sector. This is more than double the size of the previous Common Fisheries Policy (CFP) fund. This investment will be targeted at a range of supports for fishermen to adapt to the challenges of the new CFP, seafood processing and marketing, aquaculture, inshore fisheries, Fisheries Local Action Groups (FLAGS), data collection and enforcement.

THE NEW COMMON FISHERIES POLICY (CFP)
Ending Discards:… €45m will be made available to support the industry in adapting to the new CFP. Additional quota to cover the increased landings has been negotiated. For 2016, this uplift has resulted in a 10% increase in whitefish quota, with a value of €9m.
Setting Quotas Based on Science:…

[Transport] p.125-126
Public Transport Investment: We will invest €3.6bn across the lifetime of the next Capital Plan to enable a number of major public transport projects to proceed, and to fund additional capacity to meet existing and future commuter needs…

Sustainable Transport:… Under the Capital Plan, €100m is being committed to smarter travel and carbon reduction measures, including Greenways, to ensure that the transport sector makes a major contribution to climate change mitigation targets.
Electric Vehicles:…
Roads Investment:…

[Tourism and Sport] p.128-129
Dublin Airport:…
Cork Airport:…
Shannon Airport:…
Regional Airports: Fine Gael understands the continued importance of Donegal, Kerry, Ireland West Airport Knock (IWAK) and Waterford airports, due to the level of international connectivity that they bring to their respective regions, both in terms of tourism and business. To this end, we will invest €28m under the Capital Plan for safety and security enhancements across the regional airports. We will continue to provide funding to assist developing new flight routes from all airports outside of Dublin. This would be similar to a recent UK initiative which has been shown to be permissible under EU rules.

[Appendices] p.134-136


UK Vol.50 (Post-EUref tweets Vol.3)

Here is just a part of (analytical) tweets concerning the Brexit through early AM 29 June (BST). Excerpts are on our own.

16 things you need to know about the process of leaving the EU | @ConUnit_UCL
… 8. The process of withdrawal will involve three sets of negotiations:
First will be the negotiation of the withdrawal terms themselves. These will likely include, for example, an agreement on the rights of UK citizens already resident in other member states and of EU citizens resident in the UK. As Professor Sionaidh Douglas-Scott has explained, those rights – contrary to what some have said – are for the most part not protected under existing international law.
Second, it will be necessary to negotiate a trade deal with the EU. The official Vote Leave campaign confirmed that it wanted such a deal and correctly pointed out that everyone’s interests would be served by having one. … But there will be greater difficulties in services. Open Europe (which campaigns for EU reform and was neutral in the referendum) highlights particular difficulties in financial services, where it rates the chances of maintaining current levels of access to the EU as ‘low’.
Third, the UK will have to negotiate the terms of its membership of the WTO and will want also to negotiate trade deals with the over 50 countries that currently have such deals with the EU, as the existing arrangements will no longer apply to the UK from the moment of Brexit. The WTO itself has warned that this will not be straightforward: the UK will not be allowed just to ‘cut and paste’ the terms of WTO membership that it currently has through its EU membership. Similarly, while we might hope that other countries will agree quickly to extend the EU rules to the UK, we cannot presume that all will – and the UK itself might want different terms in some cases.

What does triggering Article 50 mean for the UK? Our @alanjrenwick explains | @ConUnit_UCL
… 3. The terms of the UK’s withdrawal from the EU and the nature of our future relationship with the EU will be worked out through negotiations with the remaining 27 member states, as set out in Article 50 of the Lisbon Treaty.
4. Article 50 skews the balance of power in the negotiations in favour of the continuing member states. That is because of the two-year rule and the unanimity requirement for extensions to that period.
5. It is sensible that the Prime Minister has left triggering Article 50 to his successor.
6. It is vanishingly unlikely that the UK could withdraw without triggering Article 50 at all.
7. Both sides in the campaign have agreed that this whole process will take several years, during which the UK will remain in the EU. …

… Scenario 1: avoiding Article 50 to avoid Brexit
… Boris Johnson said ‘There is only one way to get the change we need, and that is to vote to go, because all EU history shows that they only really listen to a population when it says No.’ …
Scenario 2: avoiding Article 50 to secure better Brexit terms
… Indeed, the Vote Leave campaign appears to recognise … ‘We do not necessarily have to use Article 50 – we may agree with the EU another path that is in both our interests.’ …

Constitution Unit briefing paper: ‘Brexit: Its Consequences for Devolution and the Union’ | @DanielGover
… Under the Sewel Convention, however, the UK government has said that it will not normally legislate on a devolved matter without the consent of the devolved legislature, and similarly always sought the consent of the devolved legislatures, before extending their powers… Sionaidh Douglas-Scott suggested that if they wished to express their opposition to Brexit, or to increase their leverage during the Brexit negotiations, the devolved assemblies might be reluctant to grant legislative consent to the widening of their powers implied in removing the EU law constraint. This would take us into uncharted constitutional territory. …

Will Brexit lead to the break up of the UK? via @ConUnit_UCL | @Huw_Pritchard
… First, forecasts of the financial viability of an independent Scotland depend heavily on the oil price… Second, if an independent Scotland joined (or remained in) the EU, while England and Wales headed for Brexit, that might require for the first time the creation of a hard land border between England and Scotland. Third, if Scotland has to re-apply to join the EU, it may be required to join the Euro, which is a requirement for all new member states. This last factor might be a reason for Scotland seeking to hold an independence referendum soon, before the UK leaves the EU, so that Scotland does not have to re-apply from outside. The Scottish Parliament does not have a clear power to hold an independence referendum, because under the Scotland Act 1998 the constitution is a reserved matter…

IFS Director Paul Johnson reflects on the role & impact of economists in the referendum debate | @EconUCL
… Of course, other things mattered, and mattered enormously, but it is clear that economists’ warnings were not understood or believed by many. So we economists need to be asking ourselves why that was the case, why our near-unanimity did not cut  through. In short, we need to understand the abject failure of our profession to persuade the public about the consequences of a Leave vote. …

Political and legal consequences of Brexit for the UK and the EU | @ConUnit_UCL

This interesting analysis by Joshua Rozenberg @guardian cites Lord Lisvane on our blog | @ConUnit_UCL
… So I would expect the UK’s negotiations with Brussels – ahead of an article 50 notification – to continue into next year. If there is a significantly better deal on offer, the new prime minister might choose to put it to the people – not, I suspect, by holding another referendum but by calling an early general election.
The Fixed-term Parliaments Act 2011 allows for this in two possible ways. One would require the support of two-thirds of the House of Commons. The other can be done by passing a vote of confidence on a simple majority…
… my own view is that the government will require, at the very least, a majority vote in the House of Commons before proceeding. One might have argued that a kamikaze prime minister could have triggered article 50 immediately after the referendum result was declared, using his prerogative powers. Those powers are used to sign treaties but not, I would argue, to put them into effect in the UK. In any event, there is a growing constitutional convention that prerogative powers are subject to parliamentary approval, as we saw with the Commons vote in August 2013 against air strikes on Syria.
… Lord Lisvane, the former clerk to the House of Commons, has pointed out that it is not as simple as repealing the European Communities Act 1972, under which the UK joined what is now the EU.

As well as our analysis, here’s @ProfMarkElliott’s excellent briefing on constitutional fallout from #EUref result | @ConUnit_UCL
First… as a matter of international law, the UK as a State continues to be subject to its obligations under the EU treaties, and that, under the 1972 Act, EU law remains applicable in the UK and has priority over UK law. Legally and constitutionally, nothing has changed yet. …
Second… Once the Member State makes the decision to withdraw and gives the European Council notice of its intention to leave, the clock begins running and — subject to two exceptions — the treaties cease to apply to the departing Member State after two years. The first exception is that the two-year rule does not apply if the departing State reaches agreement on the terms of departure before the expiry of the two-year period. The second exception is that the European Council — with the agreement of the departing State — can agree to extend the negotiation period beyond two years.
Third… The legislation that provided for a referendum to be held said nothing whatever about the effect of the outcome of the referendum, and the result does not place the Government under any legal obligation to secure Brexit. … Rather, the will of the people has been expressed through an advisory referendum, and the making of the decision whether to withdraw remains a matter for the Government. However… Political reality is something else entirely. …

Do people tend to vote against change in referendums? | @UCL_EI
… Looking at all national…referendums from democracies since 1990…, we can consider whether the status-quo option tends to win. We find that actually the change option won a majority of the votes cast in 186 out of 268 referendums, i.e. 69 per cent of the time.
On the other hand, that figure might be misleading. Many countries have extra thresholds for a vote for change to count as valid: either that turnout must exceed a certain minimum or that support for change must pass a minimum proportion of the eligible electorate. Once we take this into account, only 106 of the 268 referendums (40 per cent) have actually passed.
The question therefore arises of which of these measures more accurately reflects how often publics are willing to back change. …

It’s Brexit. As the UK – and Europe – wakes up to a new reality, here is a first round of reactions from UCL staff | @UCL_EI

UCL Provost’s video message about the EU Referendum result, reassuring UCL staff and students from the EU | @uclspp

Leaving the EU: UCL’s statement | @ucl

Lastly, our final #EUref forecast which predicts that Remain will win 52-48 | @ConUnit_UCL

200 academics led by @alanjrenwick @ConUnit_UCL sign letter criticising deliberate misinformation in EU Referendum | @uclnews

Brexit: what’s going to happen to our money now we’re leaving the EU? @swatdhingraLSE cited | @CEP_LSE
…the collapse in the pound would likely lead to a 3% rise in inflation, to between 4% and 4.5% by late 2017.
… Remain argued we could be in for a year-long recession, with at least 500,000 jobs lost and GDP around 3.6% lower than if we’d stayed in the EU. Real wages could be nearly 3% lower now, coming to a reduction of £800 a year for someone working full-time on the average wage…
… Britain will now be less attractive to foreign investors, with trade taking a knock of up to 2.6%. Manufacturing would also suffer, with car production dropping by 12% and car prices rising by 2% on average…

The EU isn’t snookering Britain. Britain is hoodwinking the EU. Comment from @johnvanreenen | @CEP_LSE

How bad will Brexit get? @johnvanreenen & other economists & economic organisations’ views, via @voxdotcom | @LSEEcon
Should We Stay or Should We Go?: The economic consequences of leaving the EU [PDF] | Swati Dhingra, Gianmarco Ottaviano and Thomas Sampson
… On average, trade agreements the EU has entered into over the past two decades have increased the quality of UK imports from its FTA partners by 26% and lowered the quality-adjusted price of imports by 19%… Overall, consumer prices fell by 0.5% for UK consumers as a result of FTAs with trade partners that are not EU member states, saving UK consumers £5.3 billion per year.
…Part of the attraction of the UK for foreign companies is as an export platform to the rest of the EU, so if the UK is outside the trading bloc, this position is likely to be threatened. This matters because foreign multinationals tend to be high productivity firms and they bring new technologies and management skills
with them. There is also some evidence of positive productivity spillovers from FDI undertaken in the UK. Indeed, given the large sunk costs involved in FDI, the uncertainty generated by the possibility of an in-or-out referendum may have a negative impact on investment in the run-up to the vote…

Would it fly? A possible Article 50 route to a second referendum… | @lsebrexitvote

External perspectives on Brexit? Prof Kevin Featherstone’s LSE Commission report | @LSEEI
[PDF] External Perspectives on the UK’s membership of the European Union: Report of the hearing held on 1st March, 2016 | LSE Commission on the Future of Britain in Europe (Rapporteur: Kevin Featherstone (LSE))
• The immediate ‘Brexit’ impact would be shock and uncertainty over how it can be managed. The best strategy for Britain’s partners would be to wait for London to present its proposals for a future relationship. Importantly the 27 are unlikely to agree a first offer.
• The alternatives to EU membership (following the Norwegian, Swiss, or Canadian models) are unclear, would be costly for the UK and produce few advantages. The search for a different solution might set precedents for new framework agreements with other countries like Turkey and Ukraine.
• Economically, both sides will have an interest in trying to reach a trading deal as soon as possible, if the political climate allows it.
• Brexit will threaten an important market for continental exporters.
Likewise, the EU27 represent a major market for UK exports.
• On the EU side, member states will lose a major net contributor to the EU budget. They may well seek a high price for continued access to the single market.
• Financially, the general uncertainty of a Brexit vote is likely to discourage FDI into Britain.
• The prospect of restrictions on free movement between the UK and the rest of the EU would likely entail economic costs for both sides.
• Without Britain, the EU might become more ‘inward-looking’. In Council decision-making with qualified majority voting, France will become more pivotal in a number of areas. Britain is a long-standing advocate of freer trade and meaningful structural reforms. The relevant coalitions supporting such policies in EU meetings may be significantly weakened.
• The EU would lose a member with one of its biggest military and diplomatic capacities, is its main advocate of interventionism, and which has the strongest link with Washington. ‘Brexit’ will weaken Europe’s ability to stand up to Putin’s aggression, its response to the
challenges of jihadism, and its rapport with East Asia.
• Politically, the domestic impact for Britain’s partners will be a boost to the extremes and to populists who advocate a block on Europe’s development or even their own exit.
• The presidential prospects of Marine Le Pen in France will look brighter and the voices of the far right in places like Hungary, the Netherlands, Austria, Greece and Poland will become louder.
• Following a ‘Brexit’ vote, the taboo over ‘GREXIT’ may begin to be lifted.
• Perhaps because other member states have been slow to react to the prospect of ‘Brexit’, a ‘no’ vote will shake the EU suddenly and deeply. It will pile on the agony amidst the migration and debt crises and deepen the general air of self-doubt.

After shock #eurefresult, what happens next? Full guide to Brexit negotiations from LSE’s foreign policy think tank Dr @timothyloliver | @lseideas
NEGOTIATION 1: UK Political
NEGOTIATION 2: UK Governance
NEGOTIATION 3: UK and non-EU Countries
NEGOTIATION 4: UK and the EU
NEGOTIATION 5: Within the EU
NEGOTIATION 6: EU Reform
Negotiation 7: The EU and the rest of Europe
Negotiation 8: The EU and the rest of the World
Negotiation 9: Ongoing EU business
Austria: Making use of UK-EU tensions for domestic purposes.
Belgium: Support for the UK staying in the EU, but European integration has priority.
Bulgaria: Brexit would be like UEFA without England’s national team and Wayne Rooney’s goals.
Croatia: a strong desire to see the UK stay.
Czech Republic: A United Europe is the Priority.
Denmark: Quiet but clear support for a close UK-EU arrangement.
Estonia: Practical questions for the Estonian EU Presidency.
Finland: Seeking good EU-UK relations, but the EU is the first priority.
France: Brexit or not, the EU shall not recede.
Germany: Thinking less about the UK and EU-UK relations, and more about the EU as a whole.
Greece: Concerns about the unity of the EU and Eurozone.
Hungary: Seeking a quick exit deal.
Ireland: An exercise in damage limitation.
Italy: Supports EU Integration with or without the UK.
Latvia: Safeguarding the EU project.
Lithuania: Brexit could have a hazardous impact on “ever closer union”.
Luxembourg: Protecting European Integration and Financial Services.
Malta: One of the Countries Likely to be most affected by Brexit.
Netherlands: Helpful, but no blank check.
Poland: Going the extra mile for Britain but not at all costs.
Portugal: Balancing a centuries-old alliance with a modern commitment to the EU.
Romania: Continued free movement to the UK will be the ultimate redline.
Slovakia: Quiet anticipation at the helm of the EU Council.
Slovenia: Hoping for a remain vote.
Spain: Brexit will be seen through domestic politics.
Sweden: Prioritising geopolitics and cultural proximity with the UK.

#LSEBrexitVote #EUref: A kingdom of many parts: analysing how Londoners and the English view the EU is key Dr @timothyloliver | @LSEpoliticsblog
UK1
UK2
EU approval in UK
To be or not to be in Europe: is that the question? Britain’s European question and an in/out referendum [PDF] | @timothyloliver
…whether the decision is to stay in or leave the EU, in order not to raise false expectations in both Britain and the EU the referendum must then be followed by better management of the European question. Failure to do so would allow the poison to return,
meaning the referendum would have been nothing more than a placebo.
So how can Britain’s European question be better managed? Here we might look to the debate in Scotland about its relationship with the rest of Britain. As James Mitchell has argued, the ‘Scottish question’—one of party politics, identity, constitution and political economy—can never be entirely answered, either through independence or through remaining in the United Kingdom…

Delaying talks with the rest of the EU is fraught with economic risk, warns @LSEEI Iain Begg | @lsebrexitvote
… A particular concern is the growing deficit on the current account of the balance of payments, which reached 5.2% of GDP in 2015 and, in the absence of shocks during 2016, was expected to stabilise at this level. … One of the last analyses issued prior to the referendum by the Treasury set out two scenarios for these effects, labelled respectively as ‘shock’ and ‘severe shock’. In both cases, three channels of negative effects were identified, with the differences between the scenarios arising from the intensity of the effects. They are: the uncertainty about the terms of a new deal between the UK, the remainder of the EU (rEU) and other parts of the world; the transitional costs of shifting to a new regime for trade and investment; and the effects on jobs and growth of financial stability.

Brexit against the wishes of Scotland and Northern Ireland violates the UK’s constitution | @LSEEuroppblog
… EU law is incorporated directly into the devolution statutes in Scotland, Wales and Northern Ireland. Section 29(2)(d) of the Scotland Act 1998, for example, provides that acts of the Scottish Parliament that are incompatible with EU law are ‘not law’. A similar provision, section 6(2)(d), appears in the Northern Ireland Act 1998. Indeed, the status of the UK and Ireland as EU member states and signatories to the European Convention on Human Rights was fundamental to the negotiation of the Belfast or ‘Good Friday’ Agreement.
Amending the devolution legislation would be technically easy, but politically hazardous. It would add fuel to the fire stoked up by Scottish demands for independence. It would place ‘a bomb under the Irish peace process’. If Westminster is serious about Brexit it will have to terminate the devolution settlement it has so carefully crafted since before 1997…

Why Brexit Might Not Happen at All via @JohnCassidy | @LSEEurocrisis
… One possibility being floated by some pro-E.U. campaigners is a vote in the House of Commons against invoking Article 50. …under the British system, sovereignty rests in Parliament, and so the Leave vote was purely advisory.
… A more likely outcome is a general election, a second referendum, or both. In 2011, Britain switched to a system of five-year fixed-term Parliaments, and under that system the next election isn’t due until 2020. But the Brexit crisis has already generated calls for the fixed term to be junked.

The UK is Reaping What the British Media Have Been Sowing for a Long Time by @Maria_Kyriakid | @LSEEurocrisis
… Rupert Murdoch’s media have been the ringleaders of a blatant and well-sustained anti-EU campaign throughout the years of his reign in the British media landscape, a hostility based on Murdoch’s inclination for low taxes and weak media regulation.
…More media space and attention has been devoted to apparent internal conflicts within the Left over the last months rather than the eminent risk of a Brexit… What was needed was a more sustained coverage of the significance of the EU…

@borisjohnson: I cannot stress too much that Britain is part of Europe – and always will be | @LSEEurocrisis

The Future of Europe: So What if the British Are Leaving? via @SPIEGELONLINE | @LSEEurocrisis
… It is an irony of history that even if the British do not get the deal Prime Minister David Cameron negotiated with the other EU leaders, the remaining 27 countries could still implement some of its provisions. For example, a Romanian worker in Germany, whose children still live in Romania, should probably not be entitled to generous German child benefits. …

From our archive: Has the EU failed us, or have we failed to forge a European identity? by @prentoulis | @LSEEurocrisis
…There has been little enthusiasm in Britain for the ‘spirit’ of the Union, no desire for anything more than an instrumental relationship.
…Only a very small part of what the European project is or could be, is seen as relevant for Britain: it is good for business, and, yes, it may help maintain Britain’s position in the world – and one sometimes has to join the ‘allies’ in their dubious foreign endeavours. But it would be un-British to get too involved…
To be fair, it is not only Britain which is keen to retreat to its national borders and prioritize its national interests. The recent Swedish and Danish proposals that amount to the cancellation of Schengen are a self interested response to what actually is a European-wide challenge…
…Perhaps its biggest failure has been its inability to forge a European identity capable of transcending national borders. The emergence of new nationalisms (exploited skilfully by the far right), is an extremely worrying result of this failure.

Who won the referendum? via @openDemocracy by @profAFinlayson | @LSEEurocrisis
…a good way of understanding the politics of the UK right now is in terms of five different kinds of reaction to these cultural and economic changes…
Firstly, there are those people who like and benefit from both the cultural and economic effects… Most of these people voted Remain.
Secondly, there are people who like and benefit from the cultural effects of globalisation but not the economic ones… Remain.
Thirdly, there are people who like or benefit from the economic effects of globalisation but not the cultural effects… Leave.
Fourthly, there are those people who don’t like and have not benefited from either the cultural or economic effects of globalisation… Leave.
The Leave campaign much more clearly understood that the campaign was not really about the EU. It focused on cultural experiences and attitudes – hostility to the rules and regulations of social liberalisation, national pride and racial prejudice and wrapped an appeal to economic experiences within it…
The fifth group is those who like and benefit from both cultural and economic globalisation – but not as much as they would like… For these people the EU is a brake on progress: it is too slow and cumbersome, reliant as it is on face-to-face meetings, consultation and consensus, rules and procedures… they believe that movement should be freely determined by economic demand rather than the kinds of old-fashioned rights which enable EU citizens to go anywhere in the EU…
…They want to weaken the forces that prevent them from shaping the future as they imagine it must be: the sentimental Left, the statist EU, the traditional Conservative party…

Can Brexit Be Overturned? What Brits Are Asking Each Other Today via @business | @LSEEurocrisis

Thoughts on the sociology of Brexit | @LSEEurocrisis
1.THE GEOGRAPHY REFLECTS THE ECONOMIC CRISIS OF THE 1970S, NOT THE 2010S
2.HANDOUTS DON’T PRODUCE GRATITUDE
3.BREXIT WAS NOT FUELLED BY A VISION OF THE FUTURE
…many Leavers believed that withdrawing from the EU wouldn’t really change things one way or the other, but they still wanted to do it… The contemporary populist promise to make Britain or American ‘great again’ … is not a pledge or a policy platform; it’s not to be measured in terms of results. When made by the likes of Boris Johnson, it’s not even clear if it’s meant seriously or not. It’s more an offer of a collective real-time halucination, that can be indulged in like a video game.
4.WE NOW LIVE IN THE AGE OF DATA, NOT FACTS
…What is a ‘fact’ exactly?…
…The attempt to reduce politics to a utilitarian science (most often, to neo-classical economics) eventually backfires, once the science in question then starts to become politicised. ‘Evidence-based policy’ is now far too long in the tooth to be treated entirely credulously, and people tacitly understand that it often involves a lot of ‘policy-based evidence’…
5.THE LEAST ‘ENSLAVED’ NATION IN THE EU JUST THREW OFF ITS ‘SHACKLES’

A Divided and Broken post-EUropean Britain via @ellie_knott | @LSEEurocrisis

The Disunited Kingdom: Scotland is dragged out by England New referendum highly likely via @TheEconomist | @LSEEurocrisis

Brexit vote sparks huge uncertainty for UK universities via @timeshighered @SamuelJPElliott | @LSEEurocrisis
“This outcome provides a real challenge for our sector. Science is an area where the relationship between the UK and the EU was particularly beneficial. Not least because scientists won billions of pounds of research funding for the UK, above and beyond what we put in. (€8.8bn between 2007 and 2013.) In addition, free movement of people in the EU made it easy for scientists to travel, collaborate and share ideas with the best in Europe and for companies and universities in the UK to easily access top talent from Europe.”

The downfall of David Cameron: a European tragedy | @LSEEurocrisis
…Instead, fatally as it has now transpired, he was always a “Eurosceptic – but not as Eurosceptic as you are”, as he put it to his first political boss, the former chancellor Norman Lamont. Cameron’s lifelong soft Euroscepticism meant he had no answer to the hardliners on Europe once the issue had become turbocharged by austerity and immigration…
The 2010 election, which was in most respects a triumph for Cameron, ensured ever more frantic juggling. Going into coalition with the pro-European Liberal Democrats meant the referendum on UK membership of the EU that many Conservatives continued to advocate was put in the deep freeze. The coalition’s official policy was that there would be no in/out referendum and that only Cameron and Nick Clegg could settle European policy between them.
…The hard right’s revenge came in October 2011 when the MP David Nuttall’s motion for a referendum triggered the largest Tory postwar revolt on Europe, with 81 Eurosceptics voting against the government.
Two months later, Cameron tried to assuage his rebels by vetoing a eurozone rescue plan at an EU summit in Brussels. The clashes left Cameron isolated on both fronts…
“He’s so busy wondering how to get through the next few weeks that he could endanger Britain’s international position for the next few decades. It’s all very very risky,”…“You may be right. But what else can I do? My backbenchers are unbelievably Eurosceptic and Ukip are breathing down my neck.” After a long buildup, Cameron finally made his referendum pledge in 2013…
Three years ago, in a comment on Cameron’s referendum pledge in the Bloomberg speech, Tony Blair likened it to a comedy western of the 1970s. “It reminds me a bit of the Mel Brooks comedy Blazing Saddles where the sheriff says at one point as he holds a gun to his own head: ‘If you don’t do what I want I’ll blow my brains out,’” Blair warned. This week, Cameron has done just that.

Brexit leaves Greece dangling precariously via @MacroPolis_gr by @NickMalkoutzis | @LSEEurocrisis
…Overall, the International Monetary Fund sees the spillover effect from a Brexit on the Greek economy at close to 0.5 percent of GDP under the adverse scenario. For many eurozone economies this may seem like a rounding error but for Greece, which is in line for a 0.3 percent of GDP contraction this year, it could be enough to derail its attempts to meet the fiscal targets in its adjustment programme…

A message to the LSE community after the EU Referendum result | @LSEnews

A message to the LSE community after #EURef result from LSE Director @craigjcalhoun & Interim Director Julia Black | @LSEnews

Kevin Featherstone “There has rarely been a more interesting or important time to study Europe” | @LSEEI

Impact of Brexit – #HigherEd & Research? See @annecorb LSE Commission report | @LSEEI
‘Remain’ reflects the sector’s concerns, ‘leave’ sets out to appeal to those who want the big picture, not the detail… ‘Leave’ has not made a plausible case…

LSE Commission report @IainBeggLSE – Economic Impact of Brexit | @LSEEI
projections

Brexit Analysis No.8 #BrexitOrNot BREXIT 2016: Policy Analysis from the Centre for Economic Performance @CEP_LSE

Brexit Analysis No.7 @CEP_LSE Who Bears the Pain? How the costs of Brexit would be distributed across income groups
costs/pain

Brexit Analysis No.6 ‘ECONOMISTS FOR BREXIT’: A critique from @CEP_LSE
critique

Brexit Analysis No.5 @CEP_LSE Brexit and the Impact of Immigration on the UK
immigration

Brexit Analysis No.4 UK Treasury analysis of ‘long-term economic impact of EU membership+alternatives’: @CEP_LSE
long-run costs

Brexit Analysis No.3 @CEP_LSE The impact of Brexit on foreign investment in the UK
FDI

Brexit Analysis No.2 @CEP_LSE The consequences of Brexit for UK trade and living standards
trade/living

Brexit Analysis No.1 @CEP_LSE Life after Brexit : What are the UK’s options outside the European Union?
options

#VoteRemain? Not sure? Help is at hand! BREXIT 2016: Policy Analysis from @CEP_LSE @swatdhingraLSE @johnvanreenen +
PDF: include the above No.1-8.

Scenarios of a new UK-EU relationship [w PDF]: A ‘soft’ Brexit, by @swatdhingraLSE | @LSEEcon
… Just from the channel of reduced trade, the effects of Brexit would be equivalent to a fall in British income of between 1.3% and 2.6%. And once we include back of the envelope calculations for the long-run effects of Brexit on productivity, the decline in income increases to between 6.3% and 9.5%. Some of these losses can
be reduced by future trade and investment arrangements with the EU after a soft Brexit. But the possible political or economic benefits of Brexit, such as better regulation, would have to be very large to fully outweigh such losses.

Foreign investors love Britain – but Brexit would end the affair | @LSEpoliticsblog
… There are at least three reasons:
First, being fully in the single market makes the UK an attractive export platform for multinationals as they do not face the potentially large costs from tariff and non-tariff barriers when exporting to the rest of the EU.
Second, multinationals have complex supply chains and many co-ordination costs between their headquarters and local branches. These would become more difficult to manage if the UK left the EU.
Third, uncertainty over the shape of the future trade arrangements between the UK and EU would also tend to dampen FDI. …

What Brexit might do to the British economy @swatdhingraLSE via @NewsHour on @YouTube | @CEP_LSE

@swatdhingraLSE says Brexit could damage the UK-India trade relationship | @The_IGC

UK areas with stagnant wages are most anti-EU @s_machin_ via @FT | @CEP_LSE

The Great Pushback: Western Politics and Dynamics of Exclusion | @LSEEurocrisis

Britain riding the tectonic plates via @openDemocracy| @LSEEurocrisis

EU referendum: economic message lost on voters @TheIFS @CEP_LSE @NIESRorg | @ESRCpress

‘This result should not come as a shock’ @sarahobolt @LSEEI | @lsebrexitvote
…We also know that referendums are highly unpredictable, and that voters often vote against proposals put to them by the government and supported by mainstream political parties and experts. …
… One reason why referendum outcomes are particularly unpredictable is that they present ordinary citizens with an opportunity to “stick it” to the political establishment. A division found in many referendums, including this one, is thus one between “the ordinary people” and “the elite”. This populist argument was successfully exploited by the Leave camp who portrayed the referendum as a chance for ordinary citizens to “take back control” from the elites in Brussels. …

Why I hope the UK will decide to Remain in the EU. My latest #EUref blog @LSEEuroppblog. | @DanMulhall
…a UK exit from the EU carries many risks – for Ireland, for our relations with the UK, for North-South ties in Ireland and for Europe. The current open border between North and South in Ireland could not be guaranteed to continue unchanged in a post-Brexit scenario. In the event of the UK leaving, we would also miss the productive partnership we have developed within the EU, where our two countries have discovered that we have very similar approaches to many of the issues on the EU policy agenda…

“Why Britain could have a great future outside a broken EU” via @MailOnline | @LSEEurocrisis
… Or take Italy, a country with an economy roughly comparable in size to our own. Its growth rate over the past eight years has been just 3 per cent. In the same period, free from the shackles of the euro, Britain has grown 35 per cent.
… We needn’t look far for the explanation. For not only is the euro destroying livelihoods, but the madness that is the free movement of peoples has brought waves of migrants sweeping across Europe, depressing wages, putting immense strain on housing and public services, undermining our security against criminals and terrorists — and making communities fear for their traditional ways of life.

Is the EU really run by unelected bureaucrats? by @simonjhix via @LSEEuroppblog | @LSEEurocrisis
…the Commission President and the individual Commissioners are not directly elected by the peoples of Europe.
First, the Commission’s power to propose legislation is much weaker than it at first seems… A Commission proposal only becomes law if it is approved by both a qualified-majority in the EU Council (unanimity in many sensitive areas) and a simple majority in the European Parliament…
Second, the Commission President and the Commissioners are indirectly elected. Under Article 17 of the EU treaty, as amended by the Lisbon Treaty, the Commission President is formally proposed by the European Council (the 28 heads of government of the EU member states), by a qualified-majority vote, and is then ‘elected’ by a majority vote in the European Parliament…
Then, once the Commission President is chosen, each EU member state nominates a Commissioner, and each Commissioner is then subject to a hearing in one of the committees of the European Parliament. If a committee issues a ‘negative opinion’ the candidate is usually withdrawn by the government concerned. After the hearings, the team of 28 is then subject to an up/down ‘investiture vote’ by a simple majority of the MEPs. …

New EU referendum polls suggest Remain is taking back the lead | @LSEEurocrisis

UK economy would be seriously weakened by Brexit, by Prof Nick Stern via @telebusiness @STICERD_LSE | @LSEEcon

Brexit: should the UK stay or walk away? Thomas Sampson interviewed by Radio New Zealand about the EU Referendum | @LSEEcon

Reading News With Economists: EU Referendum – Dr Thomas Sampson. By @EquiEcon | @LSEEcon

The ‘Britain Alone’ scenario: CEP@LSE’s critique of ‘Economists for Brexit’ | @LSEEuroppblog

Why Britain’s #EUref poses a challenge for the Labour Party. My piece in tomorrow’s @guardian | @GoodwinMJ

Left wingers for Brexit need to wake up to what they’re about to do via @ConversationUK | @LSEEurocrisis

UKIP’s ‘unethical’ anti-immigration poster @AJEnglish | @LSEEurocrisis

Le Pen hails Brexit victory and calls for referendum on EU in France | @LSEEuroppblog

Damaging consequences of Brexit: directors of three top economic research institutes in agreement, @LSEpoliticsblog | @econromesh

Brexit 2016 blogs: Comment+analysis by @CEP_LSE academics concerning the Referendum on the UK’s membership of the EU

Mervyn King talks to MoneyWeek about the EU referendum, monetary policy, & the IMF | @LSEEcon

In Feb 2015, a panel of @LSELaw experts discussed ‘Leaving the EU?’ | @LSELaw