Liberal Economic Model a "Total Failure" for Ireland

19 May 2010

Congress General Secretary David Begg has branded Ireland's adoption of the Liberal economic model as "a total failure" and a major contributor to the country's economic collapse.

Speaking at the launch of a Congress document on the links between official policy and the current crisis, Mr Begg said: "The over zealous application of the liberal economic model helped destroy the economy: direct taxes were cut and we became dependent on consumption taxes. In some ways, it was an illusion as people still had to pay for services (such as GP visits) that in many other countries are free. But by cutting the tax base we left ourselves totally exposed when the crisis came.

"In addition, the liberal economic model meant low regulation, which was disastrous for this country, facilitating the growth of a cosy, casino style capitalism driven by a tight, golden circle of acquaintances.

"Congress opposed these policies and consistently advocated the pursuit of a more sustainable, Nordic type model of development which does have higher taxes, but also guarantees high levels of social protection, the most equal societies in Europe and sustainable development. Their economies have been among the least affected by the current global crisis.

"Quite simply, on all the big issues - tax, regulation, governance and development - Ireland pursued all the wrong options," Mr Begg concluded.

The Congress document contains material made available to the team leading the Inquiry into the Causes of the Banking Crisis and is a record on Congress policy on key issues, over the last decade.