Paul Sweeney — "My Experience With The Troika In Ireland"

The day the Troika came to town was a dark day for the Irish. Troika is a Russian word meaning a sled drawn by three horses or a dance. For the Irish people it was both a dance, but to a grating, dissonant tune, and like being pulled in three directions by the horses. 

The failure that led to the Troika’s arrival was compounded because it occurred not too long after the best period of economic and social progress – ever – in the long, sad history of this little island. 

Ireland, one of the poorest of the poor European countries, had pulled itself up and turned itself into one of the wealthiest European states in a remarkably short period. The Celtic Tiger years of 1987 to 2001 were a 14-year period of stunning economic and social success. A confluence of sound economic policies and prior investment saw a doubling of the net income of average workers, a doubling of living standards and a doubling of employment in just 20 years. 

While there was growth in jobs and incomes in the 7-year period after 2001 until the Crash of 2008, policy was now boosting a massive bubble. It was based on uber-liberal economic polices of de-regulation, privatisation, massive tax shifting from direct to indirect taxes, many of which were based on property, large tax “incentives” and pro-cyclical fiscal policies. 

In the latter years of the boom it may have appeared as if ultra free market liberalism was working, but it was a gross illusion. We lost almost a decade of economic progress, many Irish businesses closed, all Irish banks collapsed, unemployment and emigration soared and we lost our dignity. 

In addition to generating economic collapse through its liberal economic policies, the Government made one further astoundingly reckless economic decision on 30 September 2008. It guaranteed all the creditors of all the private Irish banks with unlimited taxpayers’ money. The creditors were foreign banks, hedge funds, etc. and the cost was totally unknown then. It turned out to be €64bn – the equivalent to two years’ tax revenue.…

Social Europe Journal "My Experience With The Troika In Ireland"

Paul Sweeney was Chief Economist with the Irish Congress of Trade Unions.