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Economic Crisis

For the years 2020-2022, or until Ireland reaches full employment (if earlier than 2022), the fiscal stance adopted by Ireland should be determined by an unemployment target, rather than a deficit target, in recognition of the role domestic demand plays in sustaining domestic employment. The State should begin to plan now for the additional tax measures necessary, over the long-term, to finance the Government expenditure required to finance universal services and income supports for our citizens.

The COVID-19 crisis will impose its heaviest tolls on the most vulnerable. It is understandable that national leaders are focused on tackling this crisis in their own backyards, but countries must find the space for supporting other nations too, if humanity is to successfully defeat this disease. It is therefore incumbent on rich world countries to help poorer countries. It is also in rich countries’ interests to think and act globally as well as locally.

In recent years overall personal indebtedness was replaced in public discourse by a focus on mortgage debt and associated solutions.  However, for thousands of people, both mortgage and non-mortgage debt remain a persistent and pervasive concern.  With an estimated 492,000 people likely to be out of work due to the COVID-19 pandemic, we look at whether Irish households are any better placed to deal with over-indebtedness in 2020 than they were in 2008.

Ireland and much of the rest of the world is facing into a major economic recession as a result of the coronavirus pandemic. The circumstances and causes of this recession are very different from those that caused the recession in 2008/2009, but there are still lessons that can and should be learned. One of those lessons relates to government’s fiscal response. Faced with a recession that will exceed any in living memory, government must act on a scale that exceeds anything implemented during the financial crisis of a decade ago.

In this time of unprecedented crisis, the European Union must heed the lessons from the financial crash of 2008 and take substantial and coordinated action now.  Failure to act quickly, decisively and appropriately will have devastating consequences.

The coronavirus pandemic is arguably the greatest crisis the world has faced in living memory. It has implications for several areas of policy, not the least of which is the economy. In the latest episode of our podcast, Social Justice Matters, we talk to Dr. Tom McDonnell, co-Director of the Nevin Economic Research Institute, about the Irish government’s response to COVID-19, what else might be needed to ensure a robust recovery when this pandemic subsides, and the lessons to be learned from this crisis.

A new study released today by the CSO reminds us that despite our improved economic performance, one in six Irish people are still living in poverty.

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. 

A new study of 11 EU countries shows that Ireland has a significant and increasing gap in deprivation between vulnerable adults and other adults in society. The research, from the Economic and Social Research Institute, (published 31 January 2018), shows there is a significant and widening gap in the rate of persistent deprivation experienced by vulnerable adults, including lone parents and adults with a disability, and the rate experienced by other adults. Of the 11 EU countries studied, Ireland’s gap was the largest and increased the most during the study’s time frame of 2004-2015.

Current welfare systems were not designed to adapt to the challenges presented by automation and globalisation and are not fit for purpose. That's the view of a new paper from the Adam Smith Institute in the UK published to coincide with the World Economic Forum meeting in Davos this week. The institute argues that governments should look to Universal Basic Income (UBI) experiments around the world as they seek to address the risks posed by large-scale changes to the labour market while retaining the benefits of trade and technological progress.

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