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Bailout

In the most recent, and high-profile, mortgage sale, Permanent TSB this week announced its intention to sell 14,000 non-performing mortgage loans.  Some commentators have suggested that, instead of selling these loans, that individual borrowers be allowed to ‘make a deal’ with the lender to buy the loan at the intended sale price.  However, this solution is too simplistic. 

The following article by Professor James K. Galbraith appeared in Social Europe Journal on 23 February 2015 and challenges the analysis which has been communicated across mainstream media for several days.

Dr Brigitte Unger director of the WSI (Economic and Social Institute) presented a paper at Social Justice Ireland’s Social Policy Conference 2013 entitled ‘Towards a Social Europe’.  It addresses the threats to social policies after the financial crisis, models for a Social Europe and specific suggestions for creating a Social Europe.

Ireland needs a combination of vision and pragmatic policies that can truly move the country towards a desirable and sustainable future.  We need to focus on evidence rather than on the endless assertions we hear communication each day seeking to defend dubious policy developments.

The full text of the Briefing provided by Social Justice Ireland to the European Parliament's Economic and Monetary Committee on January 17, 2014 Can be accessed here

Isvtán P. Svékely, European Commission DG for Economic and Financial Affairs, presented a paper at the Social Policy Conference 2013 which examined social developments in Ireland at the time of fiscal consolidation.  The paper explored social indicators and challenges ahead.  It was co-authored by Miroslav Florián.

'Social developments in Ireland at the time of fiscal consolidation and challenges ahead' - paper presented by István P. Székely and Miroslav Florián at Social Justice Ireland's social policy confernece 2013 'A Future Worth Living For.

Analysis shows poorest 10% took biggest hit since the crash.  Latest statistics show poorest 10% of population lost 18.4% of real disposable income compared to 11.4% loss among the richest 10% since the crash of 2008.

The Great Recession of 2007-09 has led to a significant increase in public debt, in large part due to the collapse in tax revenues as incomes fell. Other contributors to the debt build-up were the costs of financial bailouts of banks and companies, and the fiscal stimulus provided by many countries to stave off a Great Depression. As a consequence, in advanced economies public debt has increased on average from 70 percent of GDP in 2007 to about 100 percent of GDP in 2011—its highest level in 50 years (IMF Fiscal Monitor, 2012).

A recently published IMF working paper ‘The Distributional Effects of Fiscal Consolidation’ shows that austerity does not work and will not work for Ireland. 

The findings of the paper shows that fiscal consolidation has had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment.

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