NESC: Ireland’s five part crisis: an integrated approach….

The National Economic and Social Council published a report on Tuesday 10th March titled ‘Ireland’s five part crisis: an integrated response’. The NESC had a historic role to play in the emergence of Ireland’s ‘programme for national recovery’ in 1987.  In advance of the talks NESC produced a document; ‘a strategy for recovery’ which provided the common ground for both the Unions and Employers to come together with the government to negotiate a new socio-economic recovery plan. The common ground was agreement on reducing the debt to GNP ratio. To achieve this the ‘social partners’ (as they were to be later characterised) agreed on the following three economic priorities:

1. Ensure a stable exchange rate to enhance economic growth whilst reducing inflation.

2. Centralise pay negotiation and link it with reforming tax policy

3. Develop active labour market policies aimed at job creation.

Thus, NESC had an important role to play in the eventual emergence of programme for national recovery in 1987. Its role was to create a common intellectual framework that would set the socio-economic terms of reference for the social partners.

It is surprising that NESC did not produce a strategic-report in advance of the recent collapsed negotiations between the government, unions and employers. The reason for this may be quite straight forward: time constraints.  The Taoiseach (perhaps responding to media pressure) organised the talks and put a strict time frame around the discussions in a relatively short space of time. The talks eventually collapsed due to a) the government and employers ending the pay agreement of T2016 and b) the government pension levy for all public servants. This led to one of the biggest public demonstrations in the history of the state.

However, I wonder whether the outcome may have been different if the NESC had produced a strategy for development for 2009? Might it have been wiser for the government to extend the discussions until a coherent plan that  tackled both the public finances (expenditure) and taxes (revenue) could be agreed? It still baffles me as to why the government have been so reluctant to create a national consensus through a negotiated recovery plan. ICTU’s 10 point plan is still the closest thing in the public domain to a path toward socio-economic recovery. Yet, this has also slowly disappeared from the public sphere. The outcome, now, is that the government need to introduce an extremely tough budget in April without anything close to a national consensus, and a national strike is still being planned for March 31st.

Against this political background NESC have published its report on Ireland’s five part crisis. Unsurprisingly it proposes an integrated national response to reflect these five crises facing the state:

  1. Banking Crisis
  2. Public Finance Crisis
  3. Economic Crisis (restoring competitiveness)
  4. Social Crisis (education, training and welfare)
  5. Reputational Crisis

The report is more descriptive than prescriptive. It proposes a policy response that tackles these five dimensions simultaneously. The report is effectively an attempt to frame the analysis for policy actors to respond. I will write a more detailed article on the report after I have read it in more detail. The full report can be found here:

http://www.nesc.ie/dynamic/docs/NESC-Report-No-118.pdf

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