Economic and Fiscal Policy

This chapter argues that Ireland did not need to impose the level of fiscal austerity it did in order to recover after the global financial crisis of 2007/8. After reviewing Ireland’s fiscal history, this chapter argues that the structural features of the economy, its remarkable openness, and a range of international factors, explain Ireland’s success. It looks at the relationship between government spending into the economy and the extraction of taxes from sectors of the economy to fund those services and effect a redistribution of income and wealth. Structurally, Ireland differs significantly from the other peripheral economies that imposed austerity after 2008, such as Greece and Spain. Accordingly, Ireland is not a poster child for austerity but rather a beautiful freak.