Thursday 27 October 2016

Donal O'Donovan: A dusty seminar, as Kenny ducks Stiglitz's punch

Published 22/01/2016 | 02:30

Joseph Stiglitz. Photo: Reuters/Vincent Kessler
Joseph Stiglitz. Photo: Reuters/Vincent Kessler

The Taoiseach shuffled uncomfortably in his seat when Joseph Stiglitz raised the vexed question of Ireland's failure to burn bondholders in the crash, during a panel discussion on economic growth in Davos yesterday.

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Ireland is in recovery, Professor Stiglitz noted, but would have done better again without taking on the burden of the bank debt.

Enda Kenny reacted with a deflection, saying he prefers to talk about the future. It felt awkward, but he had more sense than to get into a public sparring match on the vexed bondholder issue with a Nobel Prize-winning economist.

Prof Stiglitz is a noted opponent of austerity, seeing the policy as a blight that saps demand from economies that need growth.

If anything, he might have gone into the debate with Mr Kenny, Brazilian Finance Minister Nelson Barbosa Filho and Chinese property mogul Zhang Xin on the back foot.

China spends like crazy on infrastructure and its economy is slowing, while Ireland's 7pc growth rate after years of austerity is at the very least a challenge to the Professor's thesis.

Prof Stiglitz's response, that growth might have been higher without radical spending cuts, can't be tested - and like much of the debate, it felt lukewarm.

Questions from the audience were often the stuff of undergraduate seminars: Which is worse, low growth or rising inequality? Shouldn't big companies pay more tax? Is it better to invest in infrastructure or services? Shouldn't we measure national happiness instead of national wealth?

The responses from the panel were polite, moderate and sensible.

Mr Kenny, there to represent success, made a point of being modestly optimistic. There was no showboating. I'm fairly sure the King of the Belgians slipped out early.

There was more energy when the Taoiseach met Facebook's Sheryl Sandberg later in the day.

She joined him to record an impromptu video - and there was plenty of mutual backslapping about the success of Facebook in Dublin.

"Ireland is open for business," he assured her.

And that was the real Irish message for the real target audience here in Davos.

Irish Independent

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