Extract

David Begg

International Context

As Ireland contemplates a future in Europe without Britain, thoughts are turning to the possibility of new alliances. Recent efforts to establish a ‘New Hanseatic League’ is a case in point. This would see Ireland making common cause with a group of small open Northern European countries including Finland, Denmark and the Netherlands. In this context, it is of interest to explore the policy approaches of these countries between 1993 and 2008, the period associated with the Celtic Tiger, and how they adjusted to the subsequent global financial crisis.

The 1990s was the era of ‘employment miracles’. In Denmark, this was achieved through a combination of active labour market policies (ALMPs), combined with ‘flexicurity’ (guaranteed high welfare payments conditional on willingness to accept retraining), and public investment to stimulate the economy. In the Netherlands, employment restructuring involved increased female labour force participation and large numbers of part-time jobs in services. These jobs were properly regulated through collective bargaining agreements between employers and unions. In Ireland’s case, 450,000 new jobs were created in the most sustained period of economic expansion the country has ever known. A major factor was the stimulus given to the economy by foreign direct investment (FDI) attracted by the opportunities for access to European markets made possible by the 1986 Single European Act. However, 80% of those jobs were not related to exports per se, but to domestic demand. Finland was an outlier during this period....