Europe through an Irish Lens: Development, Progress, Regress

Seán Ó RiainSociology/ National Institute for Regional and

Spatial Analysis,National Univ of Ireland, Maynooth

Development, Progress, Regress: Europe through an Irish Lens

1. ‘Convergence’ on a European Development Model in the 1990s?

2. Expanding the European Model I: Liberalisation and Financialisation

3. Expanding the European Model II: Deregulation and Discipline

4. Europe’s Crisis and the Crisis of European Development

Europe and ‘Autocentric Development’ (Senghaas/ Mjoset)

Spread of Mass

Consump-tion

National System of Innovation

Linking of Export and Domestic

Economies

Egalitarian Social

Structure and Class

Compromise

Uneven Development inside the ‘European Project’

EU EuroGermany, France, Italy, Belgium, Neth, Lux 1951 1999Austria 1995 1999Denmark 1973 -Sweden 1995 -Finland 1995 1999Norway - -UK 1973 -Ireland 1973 1999Greece 1981 2001Spain, Portugal 1986 1999Cyprus, the Czech Republic, Hungary, Latvia, Lithuania, Malta, Poland

2004 -

Cyprus, Estonia, Malta, Slovakia, Slovenia 2004 2007-11Bulgaria, Romania 2007 -

Development as a Condition of Stability in Capitalism (Chart from IMF)

1. Development in Ireland’s Celtic Tiger: ‘Convergence’ and ‘Choice’

Expanded demand and employment

Disarticulated/ Fragmented

Economy

Develop-mental

Network State

Solidarity without Equality

2A. Ireland’s Property Bubble

Dec-00

May-01

Oct-01

Mar-02

Aug-02Jan

-03Jun-03

Nov-03

Apr-04Sep

-04Feb

-05Jul-0

5Dec-

05

May-06

Oct-06

Mar-07

Aug-07

0%

5%

10%

15%

20%

25%

30%

19951997

19992001

20032005

20072009

0

5000

10000

15000

20000

25000

30000

35000

40000

total building investment

total non-building investment

INVESTMENT – BUILDING/NON-BUILDING PROPORTION OF LENDING TO REAL ESTATE

2B. International Lending and the Bubble

Net foreign liabilities of Irish banks (% of total liabilities) (Lane, 2011)

2C. Core Finance Goes International

19901992

19941996

19982000

20022004

20062008

20100

20

40

60

80

100

120

140

160

180

France - DomesticFrance - Intl

19901992

19941996

19982000

20022004

20062008

20100

20

40

60

80

100

120

140

160

180

200

Germany - DomesticGermany - Intl

DOMESTIC CREDIT AND INTL LENDING IN FRANCE AND GERMANY (% OF GDP)

2D. Turning Europe Inside Out

19951997

19992001

20032005

20072009

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Germany % of exports

PIIGS % of exports

19951997

19992001

20032005

20072009

0

5

10

15

20

25

30

35

40

Germany % of domestic demandPIIGS % of domestic demand

% OF TOTAL EXPORTS AND TOTAL DEMAND IN EUROZONE

3A. Dynamism through ‘Liberal Convergence’? (OECD Indices)

1990 1998 2003 2006 20080.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Chr DemSocial DemMedLibIreland

EMPLOYMENT PROTECTION PRODUCT MARKET REGULATION

1998 2003 2008Product market regulation

0.00

0.50

1.00

1.50

2.00

2.50

3.00

chr dem soc demmedlibireland

3B. Discipline through ‘Christian Democratic Convergence’? (Guillen, Visser indices)

1990 19980

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

christian demsocial demmedlibireland

1990 1998 20060

1

2

3

4

5

6

christian demsocial demmedlibireland

CENTRAL BANK INDEPENDENCE WAGE COORDINATION

3C. Persistent Differences in Social Compacts

Average Fiscal Balance

1999-2007 (% ‘potential’

GDP)

Average Business

R&D Investment 1999-2007

(% GDP)

% ‘Learning’ Organisation

of Work, 2000 (Lorenz & Valeyre)

Social Spending,

2002(% GDP)

Nordics/ Social

Democratic 0.3 2.26 53 36.6Continentals/

Christian Democratic -1.7 1.42 47 32.5

Mediterranean -4.0 0.40 24 26.6Liberal -2.5 0.97 29 27.5

Including:Ireland -2.7 0.80 24 27.0

4A. The Double Movement in Liberal Political Economies

Unequal market powerWeak credible commitments to

security, protection and investment

KeynesianismWage Earner Welfare State

Wage and Market Income as Focus of Demands

Tax Redistribution of Income

4B. The Double Movement in the European Core

More equal empowerment of market actors

Strong credible collective commitments

Investment CentredUniversalist Protection

Wages Less Significant Part of WelfareDistribution of Welfare through

Services

Can the ‘European Model’ survive the ‘European Solution’?

LACK OF CREDIBLE

COMMITMENTS

WEAK AUTHORITY

FISCAL TREATY

AUSTERITY UNDERMINES

DEVELOPMENT

KEYNESIAN DEVELOPMENT NOW, DEVELOPMENT WITH DISCIPLINE LATER?

WEAKENING EUROPEAN SOLIDARITY