What you need to know ahead of the Spending Review: the Irish experience

This is the latest of our posts with Reform looking ahead to the Spending Review. The first six posts were on health, education, the coalition’s first hundred days, welfare, the Civil Service, and the New Zealand and Canadian experiences.

Ireland

As Colm McCarthy, Chair of Irish Special Group on Public Service Numbers and Expenditure, noted at a recent Reform conference the macroeconomic downturn in Ireland has been more severe than in almost any other European country:

— The budget deficit, excluding the Exchequer cost of the banking collapse, went from near zero in 2007 to 11.5 per cent of GDP in the current year, despite fiscal cutbacks which began in July 2008. — There was a system-wide banking collapse – every single domestic credit institution required rescue, several collapsed altogether, and the total cost to the taxpayer could approach 20 per cent of GDP. — Since the first quarter of 2008, real GNP has fallen 17 per cent and the unemployment rate has gone from under 5 per cent to 13 per cent.