On 7 May 2012, the Polish Institute of International
Affairs, in cooperation with the Embassy of Ireland in Poland, organised a
public lecture by the Minister of Finance of Ireland Michael Noonan,
titled “Ireland: The Road to Recovery.” The
event was moderated by PISM Director Marcin Zaborowski.
During the lecture, Minister
Noonan presented Ireland’s path out of recession. Among the first steps
undertaken by the Irish government was the restructuring of the banking system,
the introduction of fiscal targets, and redesigns of various economic sectors in
order to meet the conditions of the EU–IMF bailout. The current plan is based
on two core elements: growth and exports. The recent economic recovery in the
country has been mostly attributed to an increase in foreign investments and
growing exports. Irish society is still switched to saving mode, and there is
hardly any demand at the national level. Thus, the Irish economy heavily
depends on investments coming from the U.S., the UK and, to a lesser extent,
Germany and France. Ireland is particularly attractive for U.S. companies
because the countries hve a common language and working culture, and similar
regulatory policies. However, this has resulted in the Irish economy being
vulnerable and over-dependent on the economic situation in these investor
countries.
One of the most important
issues for the government has been the referendum on the Fiscal Treaty, which
is to be held at the end of May. Ratification of the Fiscal Treaty will be the
means to secure access to future funds from the Economic Stabilisation
Mechanism.
The lecture also focused on
the recent outcome of the French presidential elections. It was pointed out
that the result should be seen more as an indicator of citizens voting out the
ruling parties, which are blamed for the worsening situation, than a more
general shift to the left side of the European political stage.
During the Q&A session,
the latter issue and the potential consequences of the French elections on the
outcome of the approaching referendum were discussed in more detail. As argued
by Minister Noonan, the newly elected French president is not against
provisions of the Fiscal Treaty, rather he is looking for an additional pact on
growth and job creation. Thus, this should not have any major effects on the
outcome of the Irish referendum. The next subject that drew Noonan’s attention
was the restructuring of the Irish banking system. One of the main underlying
causes of the current economic crisis was the unsustainable loan system in both
the U.S. and Europe. Access to affordable loans is currently one of the major
issues hindering the further recovery of the Irish economy. And, lastly, the
implications of the economic crisis by reference to the future of the Eurozone’s
structure and the whole European project, was discussed. Participants noted
that only further integration will enable Europe to remain one of the most
important players on the world stage. Therefore, the ongoing debate on a
European tax, Eurobonds and a common financial tax are key elements in creating
a framework for further integration.
By Kacper Rękawek
Photos by Jadwiga Winiarska
