According to the International Herald Tribune (and the New York Times too, according to Bernie who refers to Tim O’Reilly’s short comment) Ireland is the second-richest country in Europe. That’s great, but there are some provisos to the story.
The GDP figure needs to be treated with great caution. The structure of Ireland’s economy, which includes many foreign companies motivated by attractive tax rates skews the figure somewhat. Which isn’t to say things aren’t going good – they are, but they aren’t going that good.
The IHT article suggests that there is free healthcare in Ireland. This isn’t true. If you are above the poverty line, you have to buy health insurance which costs between EUR 500 and EUR 1500 a year, depending on what level of care you want. Still, it’s a lot cheaper than a lot of other places, and the standard of care isn’t bad. Few people acknowledge it, but the high cost of providing healthcare is one of the things that discourages American companies from investing in expanding the European workforce.
Third-level fees in Ireland are free, but that doesn’t really do as much as some people think to improve access to education for the less well off. There are so many other costs to education, aside from fees. Most commentators (including the OECD) think that it would be better to provide better incentives to get the lower end of the socioeconomic spectrum into college. One way of doing this would be through a student loan scheme, which would also mean that the State would get a return on its investment in education, even if students went abroad after graduation (which is often the case in certain specialties). This is unlikely to happen though, because it would be unpopular with middle class voters.
There are big issues with distribution of wealth in Irish society. There are 1.2 million people in the 15-35 age bracket in Ireland, and most of them won’t be able to afford to buy a home anywhere near where they work, because of spiralling prices. The public transport isn’t very good. Ireland only has very limited energy resources if there is a future crunch. These are all good problems to have (20 years ago, everybody left at the age of 22), but they have to be dealt with. There are many other problems about access to infrastructure and spatial planning that are difficult and important to tackle.
The IHT article says that ‘in a quite unusual development, the government, the main trade unions, farmers and industrialists came together and agreed on a program of fiscal austerity’ They gloss over the fact that Charlie Haughey, the Irish premier with a penchant for fine wines and expensive clothing. is the guy who actually brought this about. You can’t understand what has happened in Ireland without understanding something about him.
You can like or dislike Haughey (I generally fit into the latter camp) but it’s crazy not to acknowledge that he played a significant part in getting the national show on the road. Now Fianna Fail (his party, and the the party which still leads the government) makes no mention of him, and his picture doesn’t even appear on the party website.
Showing how well Ireland is doing is also seen as a good way of showing the weakness of Europe overall. It’s true that the founder countries could learn a lot from Ireland. However, it’s also the case that Ireland’s wealth now is tied to the growth of the European Union. I’m not talking about subsidies here. Access to European markets is extremely important, but the EU has also contributed greatly to managing the environment, reducing corruption and improving public administration generally, and this has made a huge difference in turning Ireland into a first-world country.
I think it is fair to say that we have managed to implement major parts of the European social model without getting mired down with many of the disadvantages. (However, this may turn out to be a trick of demographics – when the population grows older, we may end up with some of the same problems as the French and Germans.)