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2017-02-02

Why austerity and structural reforms have had little to do with Ireland’s economic recovery Regan

The Irish recovery has nothing to do with austerity induced cost competitiveness and everything to do with a State-led enterprise policy to attract foreign direct investment (FDI) from the United States.

The European Commission argues that the Irish recovery is an outcome of the government’s successful implementation of their structural adjustment programme

The problem with this old fashioned concept of competitiveness is that the firms driving Ireland’s export-led recovery are in high-wage price inelastic sectors (biotech, pharmaceuticals, finance, business and computer services). 

What this means that their products are less sensitive to movements in international prices.

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