THE WORK of a Swedish economist who advised his government when its banking sector collapsed is being used by the Irish Congress of Trade Unions (Ictu) as the basis for its proposed “social solidarity pact”.
Jens Henrikkson was an economic adviser to Sweden’s finance minister and future prime minister Göran Persson during the early 1990s when the collapse led to a three-year recession during which public debt doubled and its unemployment tripled.
Sweden eventually recovered and its policies at the time are being widely studied by governments across the world.
Details of Ictu’s 10-point pact were published in a full-page advertisement in this newspaper earlier this week. It includes a proposed 48 per cent tax on high earners, full public control of the banks, a three-year moratorium on house repossessions, a national recovery bond and measures to protect the unemployed involving retraining and upskilling.
Ictu general secretary David Begg said the work of Mr Henrikkson, which was published by Bruegel, a Belgian based economic think tank two years ago, was persuasive because it stressed the need to share the pain.
In his paper, Mr Henrikkson wrote: “If one interest group complains, you are in trouble, but if everybody complains you are not.”
He said debt consolidation measures should be a mixture of spending cuts and higher taxation.
Mr Begg said: “The one big idea we got from it is to have a package of coherent measures that people can understand with a measure of transparency and fairness. People will accept adversity if they know that it is affecting everybody adversely.”
