Colm McCarthy: Wishful thinking on heroic scale to believe we've reason to celebrate
Need for reform has been obscured by rose-tinted view of the economy, writes Colm McCarthy
Published 02/03/2014 | 02:30
Employment data released by the Central Statistics Office on Thursday appears to show solid evidence that the Irish economy is recovering. Politicians are beginning to whisper about possible reductions in tax burdens and trade union officials are starting to shout about pay demands. The reform measures universally accepted as necessary to restore economic health a few years back have been shelved or long-fingered.
The December exit from the Troika emergency lending programme has been followed by a series of second-order political controversies about misdemeanours in the charities sector, garda whistle-blowers and the teething problems at the new Irish Water organisation. The big picture issue has disappeared from view.
This country now has a gross State debt equal roughly to 150 per cent of its annual national income, a figure which will continue to grow until the deficit is brought under control. Unemployment is at around 12 per cent of the labour force; the household sector has debts around double the annual level of household income. Tens of thousands of mortgage holders carry debts which they cannot realistically expect to repay. A new generation sees emigration as the best career option. The banking system continues to contract with mortgage lending for 2013 below the modest level of the previous year. There has been no proper banking inquiry, six years after the crisis began to emerge. The improving employment figures are not a sign of a broad-based economic recovery and the country remains locked in a dysfunctional European common currency area which has yet to show a decisive commitment to reform. It is wishful thinking on a heroic scale to pretend that the Irish economy is headed for the sunny uplands.