Today, the Irish economy is creating nearly 1,000 new jobs every week, exports have reached record levels, and more than 1,200 companies have chosen Ireland as their strategic base in Europe.
In Europe, Ireland was among the worst-affected countries by the crisis. After nearly two decades of economic growth, the collapse of the Irish banking sector and housing market, and the onset of the crisis in the euro area led to Ireland’s entering a programme of financial assistance with the European Union and the International Monetary Fund totalling nearly €85 billion.
Having experienced firsthand the profound social and financial damage wrought by the global crisis, the Irish government has focused on one clear priority–to get Ireland working again. This necessitated difficult decisions as we strove to stabilise the economy and repair the banking sector, while at the same time fixing the public finances. Ireland emerged from its Troika bail-out programme on 15 December 2013–the first programme country to do so.
This historic day marked the restoration of Ireland’s economic sovereignty, and through progressive policymaking, we have continued to go from strength to strength. Unemployment fell to 10.7% in 2014 from a peak of 15.1% in 2012. We have successfully returned to the bond markets, raising nearly €8 billion in funding this year at historically low yields, and our investment grade ratings have been restored by all of the major credit rating agencies. The most recent OECD Economic Outlook predicts that the Irish economy will grow by over 3% in 2015 and 2016, confirming that a vigorous and broad-based recovery is under way.
But we are not finished yet, and this is no time for complacency, given the many challenges facing the international community. While significant progress has been made and we are moving in the right direction, the sacrifices made by the Irish people to secure Ireland’s economic future cannot be underestimated, and there is a clear need to ensure that the benefits of our recovery are shared by all sections of Irish society.
''Intelligent policymaking will always be informed by the best available advice''
When world leaders come together for the World Economic Forum in Davos in January 2015, for some the story is of seven years of economic decline and stagnation. Moreover, very weak growth in most of the EU poses economic, political and social challenges. While we all hope that the worst is now behind us, significant uncertainties remain as we enter a new global financial and economic landscape, altered irrevocably by the crisis, presenting its own risks and challenges to this fragile recovery. It is only through a shared understanding of this New Global Context (the theme at Davos) that now prevails economically, socially and politically that world leaders can design effective policy responses to support sustainable and equitable economic growth.
Intelligent policymaking will always be informed by the best available advice, and it is with good reason that Ireland holds the independent advice of the OECD in the very highest regard. Since its establishment in 1961, the OECD has played an important role in Ireland’s economic and social development, offering expert advice on structural reforms and the formation of new social and labour market policies. Recently the OECD assisted the government in developing our Youth Guarantee Scheme and a review of the national Action Plan for Jobs, schemes which contributed directly to the creation of 61,000 new jobs in 2013 alone, with the expectation of further improvements to come in 2014 and 2015.
Today Ireland is working with the OECD on a review of our national innovation strategy, access to finance for SMEs and a strengthening of our regional policies. We are also actively participating in the OECD’s work on the Base Erosion and Profit Shifting (BEPS) project, and Ireland has taken concrete steps to close loopholes exploited by multinational entities to avoid taxes. However, one country acting alone cannot prevent aggressive tax planning, and greater international co-ordination, supported by the expertise of the OECD, is needed to properly address this issue.
I would also like to praise the OECD’s work through its Development Centre and the Development Assistance Committee (DAC). Development and humanitarian assistance are priority policy areas for Ireland, and the regular OECD peer reviews of the Irish Aid programme are an integral part of assessing its effectiveness and identifying areas for improvement. The recent DAC report praised Ireland’s aid programme, noting that Ireland continues to be a world leader in effectively tackling hunger and poverty and helping the world’s poorest communities to survive and thrive.
Ireland will continue with our recovery plan to bring the economy back to full employment and maintain our competitive offering as one of the world’s best locations for investment. While we are now among the fastest-growing economies in Europe, we must finish carrying out further reform to ensure that we create the right conditions for even greater economic activity and job creation, while delivering high-quality public services and a fair society. We have come a long way in the last three years and our task is not yet complete. But the message is clear: Ireland is firmly on the path to recovery.
©OECD Observer No 301, Q4 2014 (December)