JFK’s VISIT CONFIRMED A TURNING POINT IN IRELAND’S TRAJECTORY

I was fifteen years of age when President Kennedy visited Ireland in 1963. 

To understand the impact of President Kennedy, one has to understand that the Ireland of 1960 was a very different place, even to the Ireland of 1970. 

In 1960, the pall of nineteenth century disappointment still hung over the country.

There was still a strong sense, at that time, that we might not be able to make it as a successful nation, at least in an economic sense.

Having gained our independence in 1921, we had failed to achieve the economic potential that many assumed independence would automatically bring, just because the British had been removed. 

This economic underachievement was due to the physical damage done by warfare between 1916 and 1923, to protectionist economic and social policies between 1932 and 1956, and to the difficulties any small island economy faced, in the era before cheap air travel, containerisation, and information technology. 

Other European countries had simply overtaken us.

Then Irish politicians, like Gerard  Sweetman and Sean Lemass, had already begun to change tack, well before the Kennedy election. Protectionism was dropped, foreign investment and exports were encouraged, island status became less of a handicap, and the economy stated to grow. 

And then, as if to confirm and symbolise the more hopeful and outward looking atmosphere, one of “our own”, a man of Irish Catholic heritage became President of the United States. Not only that, he came in person to visit our country. 

The fact that a person of an Irish Catholic background could be elected President of the United States, and could present such a modern and suave image to the world, made everyone of the same religious and national background feel that they too should reassess their own potential, that they too could achieve great things, and that the stereotypes, to which we were subject for so long, need no longer constrain us.

The effect of all this was, of course, magnified by television. President Kennedy’s elegance, oratory and charm would have not have had a fraction of the impact it had, if it had happened in 1953, before television was widespread. He was probably the most televisual President ever, and he was able to use the medium to beam hope and confidence into every Irish home.

MUST THE COST OF HEALTHCARE GO ON RISING INEXORABLY?

The cost of health service is going to rise a great deal in coming years.

This is due to the ageing of the population and to the cost of medical treatments at the end of people’s lives.

Rising incomes in society also lead to higher expectations of health services and higher pay costs within the health service. 

Advances in medical technology make better treatments available, but these treatments are often costlier than the (less effective) treatments they replace.

POLICY CHOICES MAKE A DIFFERENCE

But there are choices that can be made.

For example, on certain assumptions, a McKinsey study suggested that the cost of the health service in Ireland in 2040 could range between 10% of GDP and 18%, depending on policy choices.

In the UK the range is between 11% and 14% of its GDP, and the range in the US is between 24% and 26%.

SO DO OUR OWN DECISIONS ON USING THE SERVICE

What can be done to contain costs?

I saw a report of a British NHS report on Accident and Emergency visits which suggested

+ one million of the 5.2 million annual visits to A and E were avoidable+40% of patients who visit A and E are discharged needing no treatment at all+ 50% of Ambulance call outs could be managed at the scene without going to hospital+ 20% of GP consultations could be dealt with by self care or a visit to a pharmacy

These statistics suggest that there is plenty of room to encourage people to learn more about looking after their own health. The challenge is to devise policies that incentivise this in a responsible way.

ANONYMOUS ”SENIOR SOURCE”’S VIEWS ON IRISH BAILOUT EXIT DESERVE DEBATE

One of the reasons Ireland, notwithstanding its budget deficit, will soon be able to borrow at bearable interest rates in commercial markets, is that it has met all the deficit reduction targets it had agreed with the EU/ECB/IMF troika.

All parties who have held office in Government since the programme was agreed deserve great credit for that.

Against that background, one or two statements, buried in the middle of a long article entitled 

 “No Margin for Error”,

in the “Sunday Times” on 10th November, on Ireland’s exit from the troika’s loan programme, ought to be discussed more widely.

On the question of whether fiscal discipline would be maintained, after the troika were no longer visiting every three months, the Sunday Times claimed

“One senior Labour source said he expected the government to immediately ease back on austerity once the troika left town”.

The “Sunday Times” went on

“” There are all those new EU oversight rules, but there is already a general sense that they will not be taken too seriously” said the Labour source.”

”The government will be taking the foot off the pedal as soon as we are out of the bailout. I think there will be tax cuts, maybe even a reversal of some of the unpopular budget cuts“, the source continued, according to the Sunday Times.

This senior source seems to assume that the reason Ireland had to impose austerity was because of instructions by the troika.

He or she also seems to think that commercial lenders, on whom the country will be relying future, will be much less worried about whether the government is meeting its budgetary targets, than the Troika would have been. 

My understanding is that austerity came about, not because of instructions from anybody, but because Ireland was unable to borrow in commercial markets because the gap between its spending and its revenue was just too big in 2010.

That was not “imposed” by the troika, but by an Irish government’s own earlier spending decisions, decisions that could no longer be financed by commercial borrowing. 

To meet day to day outgoings, there had to be seen to be a plan to close that gap between spending and revenue , troika or no troika, if the state were to continue borrowing for those outgoings......from ANYBODY. 

Given that commercial lenders, or purchasers of future Irish government bonds, will want their money back with interest, just as much as the troika will, is hard to see them taking a more relaxed view of budget targets than the IMF would in similar circumstances, especially as commercial loans/bonds will be subordinate to the existing IMF loans.

I am also surprised to hear that a senior source believes that the new EU rules will not be taken “ too seriously”.  I had not come across that view before, until I read it in the “Sunday Times”!

These rules have only recently been approved, after long debate, by the European Parliament and apply to all euro area states. My sense is that they were necessary to persuade EU states, with good credit ratings, to lend money or provide back stops to  EU states with poorer credit ratings. 

These rules are also based on EU Treaties, which the Irish people themselves approved in referenda ..... the Maastricht Treaty, and  the Fiscal Compact Treaty. 

The Fiscal Compact Treaty explicitly commits Irish governments to continued reduction in deficits, until we achieve a structurally balanced budget. We are not there yet.

The Maastricht Treaty commits the state to a deficit of no more than 3% of GDP, and a debt/GDP ratio of 60%.  Ireland exceeds both numbers substantially, indeed by more than almost any other EU state does at the moment. 

As long as it has to pay any interest rate, a government, which borrows money, will find itself repaying MORE than it has borrowed.

Repaying loans will require a future government to set aside money that it will have to raise from taxpayers, refuse to spend it on services , and instead  pay it to government bondholders. 

That might not be a problem if the economy is growing rapidly, but who can guarantee that, ten years ahead?

I doubt if the anonymous “source” can give any such a guarantee!