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Country Report in Limbo

Response to EU Commission’s Strategy for smart, sustainable and inclusive growth depends on new government

It’s hard to remember now. It is more than a month ago. Who remembers the delayed European Commission Country Report on Ireland, the one that got postponed until after the February election so it would not influence the voters? There was all sorts of hype about the timing and what the European Commission was or was not up to. There was little about the content of its report and nothing about why the European Commission was publishing it.

As the European policy process grinds on, there is now complete silence as the time approaches for Ireland to respond to the report. That is, of course, if we have an Ireland, in the form of a working Government, that can respond.

The report was part of the ten-year ‘Europe 2020 Strategy’ for smart, sustainable and inclusive growth.

Each year, in February, the European Commission publishes Country Reports on each Member State. These assess the overall economic situation in the country and highlight issues to be dealt with. In April of each year the Member States submit a National Reform Programme setting out the steps they are taking to address the targets of the Europe 2020 strategy, taking into consideration the issues highlighted by the European Commission. In April the European Commission presents Country Specific Recommendations to each Member State after assessing their National Reform Programmes.

It is all a bit tedious. But wait! The aims of the Europe 2020 Strategy are to increase the employment rate, to reduce the rate of early school leaving and to increase the numbers completing third-level education, to reduce the number of people living in poverty, to increase investment in research and development, and to reduce greenhouse-gas emissions.

These ambitions surely merit public scrutiny and debate.

The Country Report on Ireland opens with a round of backslapping for all concerned. The “remarkable economic rebound” is applauded. The successful implementation of an “ambitious series of reforms”, austerity in other words, “with the support of the EU- IMF programme of financial assistance” is lauded. Turning “Ireland into the fastest growing economy in the European Union in 2014 and 2015” is a success story.

It goes gently downhill after that with positive steps taken by Ireland celebrated in the report but ongoing vulnerabilities grimly laid out. The vulnerabilities include quaintly termed “legacy issues’ of “private and public debt, and financial sector repair”.

There is an unenthusiastic nod to “some progress” being made by Ireland on last year’s Country Specific Recommendations. These addressed the need to reduce the deficit, increase the cost-effectiveness of health provision, increase the work intensity of households and reduce child poverty, and resolve the mortgage arrears issues. We heard nothing about these last year.

It would seem, however, that we are more compliant when it comes to taking ownership of austerity reforms from the EU, IMF and ECB troika than when it comes to implementing more positive policy strategies. We get good marks in the report for our performance on the employment-rate target and the early-school-leaving target of the Europe 2020 Strategy. We get a polite “more effort is needed” mark when it comes to the targets for investment in research and development, reducing greenhouse-gas emissions, increasing the share of renewable energy, improving energy efficiency, reducing poverty, and completion of tertiary education.

A wide range of issues needs addressing, it says: unemployment, infrastructure and health are of particular interest from an equality and sustainability perspective.

Long-term unemployment is highlighted as a concern. The report identifies skills mismatches and skills shortages. It suggests a lack of inclusive growth, a polite reference to poverty and inequality.

It makes particular reference to inactivity traps for certain households, the high proportion of people living in households with very low work-intensity, child poverty and the lack of access to affordable, full-time and quality childcare.

Infrastructure emerges as a difficulty. It is acknowledged that “seven years of sharply reduced government investment have taken a toll on the quality and adequacy of infrastructure”. The big infrastructure issues identified are inadequacies in housing, water, public transport and climate change mitigation capacity. When it comes to healthcare, cost-effectiveness, equal access and sustainability are identified as being at issue.

So now April has arrived and Ireland must submit its National Reform Programme. Incredibly the first barrier to this is the lack of a Government, and that particular barrier does not look like being resolved any time soon.

That’s still the easy part. The next step is to secure a National Reform Programme that introduces new measures to address these issues from the report.

By Niall Crowley