Presentation to AAA meeting 11 January 2014 Troika exit – can there be a recovery?

1. Presentation to AAA meeting 11 January 2014 Troika exit – can there be a recovery? Reality v propaganda Underlying weaknesses in economy How can there be a real recovery?

2. “Our economy is starting to recover. While we still have far too many people out of work, jobs are being created. While borrowing is still too high, our public finances are moving towards a sustainable position. Internationally, our good name and our credibility have been restored. Thanks to these efforts, Ireland will exit the EU-IMF bailout tonight.” Enda Kenny, State of the Nation December 2013 #stateofit

3. The ‘best news’

4. The breakdown of the jobs figures Self-employment (without paid employees) up 28,400 or 14.4 percent.   Agriculture employment – up 25,000, or 29.4 percent. Number of non-agriculture employees up 21,900, 1.4% - most real figures (CSO Earnings and Labour Costs) Of those – biggest growth category – hospitality sector – up 15,900 –72 % of total increase.    Lowest paid, lowest value-added sector of the market economy.  Info from Michael Taft’s blog – notesonthefront.typepad.com

5. GDP growth Budget 2014 projections European Commission Figures: 2013 – 0.3% 2014 – 1.7% 2015 – 2.5% But, Autumn 2012 predicted 1.1% for 2013, Autumn 2011 predicted 2.3% for 2013.

6. Underlying fundamental weaknesses - investment • Seamus Coffey’s blog, economic-incentives.blogspot.com

7. Underlying fundamental weaknesses – government debt • European Commission, Spring 2013 review

8. Underlying fundamental weaknesses – private debt • www.zerohedge.com

9. Whose recovery? Michael Taft’s blog – Unite’s notesonthefront.typepad.com

10. Meanwhile back at the ranch… Highest rate of precarious work in EU. One person emigrates every 6 minutes. One in ten suffer from food poverty. One in four suffer ‘multiple deprivation experiences’ (almost one in three children). Average real wages projected to fall until 2016 Unemployment to remain above 12% until 2016. Social Protection payments cut by 10%

11. Arguments… • Real recovery for people won’t happen without an end to austerity policies • If you say there’s a recovery, then why not end austerity, restore social welfare payments, increase wages etc? • How can there be a real recovery? • End austerity (20% reduction in demand, continuing) • Repudiate the debt • Investment and jobs • Progressive taxation

12. Deficit … what deficit? Repudiate the debt • Moratorium on interest payments • Debt audit commission • Repudiation

13. Investment, job creation • To reach EU average investment rate, need an increase of investment of €13 billion. Private sector will not deliver • Investment stimulus of €1bn for one year would create approximately 16,750 jobs (NERI). The net cost of a €1bn investment is €575 million, because of greater tax revenues as a result of higher GDP. Therefore at a net cost of €5.175bn per year over three years, 150,000 jobs could be created (90,000 directly and 60,000 indirectly) • Argument for democratic public ownership and socialist planning

14. Progressive taxation for investment and public services – there is lots of wealth - some examples • Millionaires Tax – 1% would raise €583.2 million, 5% would raise €2.9 billion • Increased income tax - Top 10% of households (all in excess of €110,000) receive 30% of income. Average of 10% increase would raise €2.65 billion • Financial Transaction Tax (0.1% on transactions of bonds and shares 0.01% on transactions of derivatives) would raise €500 million • Corporation Tax –If Irish headline rate of corporation tax at 12.5% was also the effective rate, an extra €2.36 billion could be raised. EU27 average of 18% rate would be an additional €5 billion.