Book Reviews Austerity and Recovery in Ireland: Europe’s Poster Child and the Great Recession, William K Roche, Philip J O’Connell and Andrea Prothero (eds), (Oxford: Oxford University Press, 2017), 346 pages. Irish people will remember the dark days between 2008–13, when they watched on television panels of grim-faced Buddha-like pundits predicting the end of the Irish economy. For most of these ‘experts’, there was no hope for it and they variously described it as collapsed, destroyed and vaporised. Meanwhile, in California, a number of hedge fund managers took a very different view, seeing the apparent collapse as a golden opportunity to buy into it at highly attractive discounted prices. The pundits, with their over-kill projections, were wrong; the hedge fund managers were proved to be right, in the process making considerable capital gains out of their acquisitions in the property market. So, why was there this gap in understanding between the Irish insiders and the Californian outsiders? If the pundits had moaned and groaned less and looked at some of the fundamentals of the Irish economy, they might have made the resultant fortunes picked up by those Californians, whom they now belatedly denigrate in typical Irish populist style as ‘vulture funds’. The Irish enigma is to explain how an economy that required a multiplicity of lifelines from the EU, the ECB and the IMF (not forgetting a useful loan from the UK) between 2008–10 could, within, three years, emerge from its difficulties and start showing, once again, robust economic growth. Twenty-four different authors, singly and/or jointly provide seventeen chapters for this book, edited by three UCD academics, on Ireland’s acute economic and financial implosion during the Great Recession and the way in which it has recovered from it. As such, it is to be welcomed as a further contribution to the research on the growing literature on the subject, with many of the multi-disciplinary chapters also providing a rich bibliography on Irish and international studies. It is an ambitious book, because it deals not only with the content of the main title (Austerity and Recovery in Ireland) but also attempts to answer the question raised in its running title (Europe’s Poster Child and the Great Recession): can Ireland be presented as a good example of the benefits of soStudies • volume 107 • number 425 106 called austerity economics or was there some other element to explain how Ireland recovered so quickly from the recessionary forces that dominated between 2008–2013? The editors appear to accept the view presented by Stephen Kinsella (chapter 3) and Frank Barry and Adele Bergin (chapter 4) that ‘while fiscal contraction was necessary given the scale of the budget deficit and spiralling cost of borrowing, austerity was not responsible for the strength and timing of Ireland’s economic recovery’ (p.18). Instead, Ireland was able to escape the deprivations that fellow PIIGS (Portugal, Italy, Ireland, Greece, Spain) members such as Greece and Portugal suffered by its reliance on the strong export orientation of the economy. Taking this approach, Kinsella concluded that Ireland could be described as a ‘beautiful freak’. However, in presenting and apparently accepting this approach – one emphasised on the dust jacket – the editors appear to be unaware of the distinctly schizophrenic approach of the book. It is quite reasonable to argue that Ireland was able to recover quickly because of the underlying strong performance of the export sector – an issue very much neglected by the pessimistic pundits. It is also reasonable to argue that fiscal contraction was necessary to tackle the high and rising budget deficit, which pushed the debt/GDP ratio to an excessively high level of over one hundred and twenty per cent. But once one accepts the view that it was the export sector that primarily drove the economy back to economic growth, it is important to realise that such a view necessarily involves showing the extraordinary robustness and growth of the multinational companies (MNCs) in Ireland. It was the MNCs that drove the first part of the Celtic Tiger between 1993–2001. It was the MNCs, again, that kept a significant part of the economy on the road during...
Read full abstract
Apr 20, 2020
Marçal Sintes-Olivella + 2
Open Access
