NESC report advocates integrated national response to the crisis

The NESC has just produced a paper Ireland’s Five-Part Crisis: An Integrated National Response which sets out to assist government in developing an integrated response to the current crisis. The paper stresses the urgency of a holistic and joined-up plan within which we can see how the individual measures required to get us out of the problems we are in relate together. It is hard to argue with this proposition, even if we are a long way from seeing a recognisable plan from the authorities at this point in time.

The paper deliberately eschews making specific policy recommendations (p. 9), though some are discussed in an appendix to the paper. Its argument is that the more important task at this stage is to gain agreement around an overall analysis of the problem and a vision of the way forward. However, while the paper contains many useful insights and observations, my overall impression is that it remains too rhetorical and would have benefited from a harder edge, perhaps in the form of some specific targets to address some of the key imbalances which it identifies.

The paper has a short but useful overview of the position in which Ireland now finds itself and how we got here. It goes on to argue that there are five dimensions to Ireland’s current crisis:

  • A banking crisis
  • A fiscal crisis
  • An economic crisis
  • A social crisis
  • A reputational crisis

The core argument of the paper is that partial, piecemeal and sequential responses to these individual crises will not be sufficient or effective. This is only partly because of the inter-relationships between these individual dimensions of the crisis, but largely because citizens need to be able to see how any sacrifices they are asked to bear fit into the overall response to the crisis.

A key feature of a recovery plan is some statement of how the government intends to allocate the inevitable costs of adjustment across groups in the population, and the mechanisms for achieving this. Beyond some well-meaning statements on the need for social solidarity, the paper is silent on this issue.

The paper’s own list of desirable elements in a recovery plan (p. 40) are very high-level and fail largely to address the distributional issues which will be key to its public acceptability. It is also disappointing that the paper does not address more directly some of the operational issues on which economic and political opinion remains divided, e.g. the optimal balance and speed between addressing the yawning fiscal deficit and maintaining domestic demand, or how to bring about the required adjustments in nominal wages and prices to restore competitiveness.

To be fair, the paper states that it did not set out to get into  this level of detail, and it is more of an essay than a plan. But a plan is needed, and it is to be hoped that the government can produce it in the context of its budget measures on April 7th next.