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Ireland close to the top in Europe

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.)

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  1. Hi Antoin —

    Actually, one doesn’t *have* to have health insurance in Ireland. There is indeed free, or at least very very cheap, healthcare. I’ve used it myself, and people close to me have had to use it, on occasion — and it works well, even if it would be *nicer* to use the for-pay option sometimes instead.

    It certainly qualifies, in my opinion, as “good” free healthcare… at least compared to the costs in other countries without nationalised healthcare, such as the US, where the projected costs for a typical birth run around $10,000 in healthcare fees (I’m serious). To add personal experience, I’ve just recently received a bill for several hundred dollars for treating an injury by applying 3 stitches. If I didn’t have insurance, I would have had to pay over $5,000 for that treatment.

    if I recall correctly, healthcare costs are now the leading cause of personal bankruptcy here in the US. All in all, it’s a mess.

    Of course, nowadays in Ireland, paid healthcare is a “perk” that’s come to be expected in most professional jobs. That’s true, but it’s not a cost to the employer on the same scale as similar healthcare is elsewhere.

    In my opinion, you need to compare Ireland’s costs and apparent downsides with the same issues in other countries — and by the yardstick of US health costs to the employee and employer, Ireland is *way* out in front there.

    BTW, I’d love to know if it really *was* Haughey that drove the successful tactics that brought us into the first world; I’ll bet there’s a civil servant or two somewhere who really had many of the smart ideas, and CJ managed to pick up the credit. He wasn’t known for being shy about grabbing the limelight, after all.

  2. Well, the IFSC was certainly an example of something pushed through by CJH. Also, the idea of ‘partnership’ is not something that would have worked without strong leadership. I’m sure you are right that he got the idea from some civil servant like you said, but he was still the guy who went out and did it.

    If you don’t have a medical card, you aren’t entitled to a hospital bed in a public hospital without paying full price for it. You used to be, but you aren’t anymore, unless you are wholly within the public system. Primary care isn’t free – it costs around 40 euros a go to visit the doctor -. The drug payment scheme has been greatly cut back in recent years. In any case, you get pushed into very long queues to even see a consultant if there is anything wrong with you that isn’t an emergency case. There are exceptions, but that’s the general experience.

  3. I like the comment text, but you have noticed a huge amount of spam comments?