Acquiescing to the troika template of austerity has resigned the Celtic Tiger to long-term damage to the economy and to repeat mistakes. Athens take note

Throughout Europe, Ireland is held up as an example for Greece: we took the pain, engaged with the troika, and worked our way out of crisis to become the fastest growing economy … or so the story goes.

This myth, however, is based on much that is misunderstood and more that isn’t mentioned. It’s true that Ireland’s relationship with the troika was not contentious – for good reasons. When the troika came to Ireland, they did not have to impose a programme, hand down edicts or enforce decrees. The government had been pursuing a troika-like programme for more than two years before the three institutions – EU, IMF and ECB – arrived in December 2010.

Ireland commenced its austerity programme in 2008 and accelerated it with four budgets in two years. In autumn 2010, the government proposed a further four years of severe austerity in a national recovery plan. When the troika arrived they just rubberstamped it.

So if Ireland was following the troika plan before the troika arrived, why did it still need a bailout? Precisely because it followed the orthodox troika prescription – deflationary fiscal policies combined with banking policies that socialised private debt. The troika arrived to fund the already existing austerity programme that international lenders had lost faith in: they became austerity’s lender of last resort.

Over €30bn (£21bn) in austerity measures were introduced – public spending cuts and tax increases (mostly the former), over 15% of GDP. But for every €3 of austerity measures, the deficit was reduced by only €1. Two-thirds of austerity went to destroy Irish social and economic life, with unemployment, poverty, liquidations, suicides …

More than 30% of Irish people live in deprivation, according to the government’s own statistical agency, not far below Greece’s 37%. Over 40% of children suffer deprivation experiences. One in 10 people is at risk of food poverty – hunger.

A falling unemployment rate would normally be a signal of things coming right. But in Ireland, this disguises another social blackspot: emigration. For each person taking up a job in the last three years, two people of working age emigrated. One in seven young people has left the country.

Facebook Twitter Pinterest The Anglo Irish Bank cost Ireland 20% of its GDP when it collapsed. Photograph: Peter Muhly/AFP/Getty Images

What about growth? Irish headline growth rates are highly suspect given the impact of foreign multinationals. The Irish Fiscal Advisory Council recently estimated that half of Ireland’s strong GDP growth in 2014 was a statistical fiction, while Ireland’s Central Bank said a substantial proportion of growth was due to our low-tax financial services centre, which scarcely touches the domestic economy.

Alternative measurements of the Irish economy – which seek to remove the impact of foreign multinational accountancy practices (that is, aggressive tax avoidance) – show the recession to have been much deeper and the recovery more muted. It also shows that Ireland has a considerable debt crisis: public debt, largely driven by the property and speculation crash, is 125% of GDP.

There’s another trick hidden in Ireland’s numbers. Alone of all EU countries, Ireland is the beneficiary of a fairly secret but very real policy of monetary financing. While potentially illegal and certainly opposed by ECB and EU policy, Ireland is actually paying off a substantial part of its debt to itself: Ireland’s Central Bank took over the debt of the infamous Anglo Irish Bank, whose speculative excesses cost the Irish economy nearly 20% of GDP when it became insolvent.

In effect, the government pays the Central Bank interest on the debt, which is then returned to the government in the form of surplus income. If Greece could get this deal, the cost of debt would plummet. This is not the only contrast. Under the bailout, the Irish government was free to bring in whatever spending or tax measures it chose to bring about the prescribed deficit reduction.

Ireland is not only not a model for Greece and other European countries; it shouldn’t even be a model for itself Michael Taft

Greece has no such freedom or autonomy. To follow the Irish example, Greece too should be given monetary financing for much of its debt, as well as fiscal autonomy.

Many in Ireland proudly proclaim we are not Greece. That’s true. Ireland is Ireland – learning little from the speculative boom and bust, doing little to address its deficits in productive sectors, ignoring the profound social costs that it imposed on itself. Ireland is not only not a model for Greece and other European countries; it shouldn’t even be a model for itself.

Michael Taft is a research officer at Unite the union. He blogs here and wrote this article on behalf of the Greek Solidarity Committee in Ireland. You can follow him on Twitter at @notesonthefront