Why do the right continue to support Ireland’s disastrous economic policies?

Green Politics

The British right praised Irish policy before the recession, during the recession and continue to praise it now. They have been consistently wrong.

Free market think tank Reform has named Irish finance minister Brian Lenihan “Reformer of the Week”. Their reason?

“… for announcing a further €4.5 billion in spending cuts and €1.5 billion in tax increases in order to maintain the country’s fiscal credibility.”

This is despite the economic disaster that has been unfolding in Ireland over the past two years. In 2008 Lenihan decided against a fiscal stimulus and instead tried to balance the budget through spending cuts and tax rises.

This strategy has proved self defeating as the welfare bill (despite cuts) continues to rise and tax revenues continue to underperform.

There are now renewed market fears over Irish growth and its ability to service its debts. And yet, despite the mounting evidence that Irish policy is failing, the British right continues to heap praise on their policy choices.

Before the recession George Osborne called Ireland as a “shining example of the art of the possible in economic policy making”. Even as the IMF warned that the Irish economy was “unbalanced”. Even after the recession hit and the long series of austerity budgets began, Tory politicians and bloggers continued to be supportive.

In December last year Guido Fawkes wrote that, due to their austerity budgets, Ireland “will bounce back faster than the UK”. Nearly one year on UK unemployment is at 7.7 per cent whilst Irish unemployment stands at 13.9 per cent. Whilst the UK enjoyed decent growth in Q2 and Q3 this year, Irish GDP contracted again in the second quarter.

The British right praised Irish policy before the recession, during the recession and continue to praise it now. They have been consistently wrong.

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23 Responses to “Why do the right continue to support Ireland’s disastrous economic policies?”

  1. Tyler

    The article above makes no mention of the huge bailouts necessary for Ireland’s banks and the fact that the country is effectively bankrupt…..so it’s borrowing costs have blown out….and that the only buyer for Irish debt is the ECB.

    If they decide not to go for cuts, they’ll never get financing through the bonds markets again, unless the ECB keeps buying them with taxpayer money….which Mrs Merkel seems sure to stop in short order.

    The disastrous economic policy was the 10 years in the Euro with massive credit expansion enabled by negative real rates. THis current monetary policy is the only long term option.

  2. Mike Guillaume

    As I wrote it in a comment on a previous story about Ireland, it seems that the only ways out are either a lower euro -Germany doesn’t want this- or leaving the eurozone.
    You can find interesting (and not otimistic) views about the future of the eurozone on http://www.mikeconomics.net.
    Read also today: http://uk.reuters.com/article/idUKTRE6A759H20101108.

  3. False economy website « 21stcenturymanifesto

    […] Right wing UK commentators who have urged the Coalition to cut have been amongst Ireland’s loudest cheerleaders over the past year. […]

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