The Irish example

At last week's meeting at the National Chamber of Commerce (KIG), Alan Dukes, director general of the Irish Institute of European Affairs and a former Finance Minister of Ireland, talked about the Irish experience in making a European tiger out of a poor country with a national debt of over 100 percent of GNP, 20.4-percent inflation and a budget deficit of six percent of GNP.

Dukes emphasized the role of the social partnership signed in 1987 in Ireland's success. The agreement enabled very unpopular reforms to be carried out. Other important reforms included: EU membership and the structural and cohesion funds that came with it; attracting FDI with tax exemptions; the single market program; thorough changes in the corporate and personal tax systems; and civil service reform. 

Dukes said Poland hadn't yet transformed its fiscal policies sufficiently, but that there was still time.

"If you have to make fiscal adjustments, it's better to make them quickly," said Dukes.

The former Finance Minister said that there's no substitute for fiscal common sense, adding that bringing in FDI is not a sell-out of the country's sovereignty. He said he envied Poland's size and potential. "You can achieve better results than [we did],'" he claimed.

The measures taken by Ireland have led to a present unemployment rate of four percent, 2.5-percent inflation, and a national debt of 30.4 percent of GDP. Once these changes were implemented, Irish people who had emigrated from the country began to return.