When
21 June 2023
9:30 AM
Where
North Wall Quay, Dublin 1
Summary of meeting
The Central Bank held a virtual roundtable with representatives from a range of civil society organisations on Wednesday 21 June 2023.
The meeting was chaired by Governor of the Central Bank of Ireland, Gabriel Makhlouf, and was attended by members of the Central Bank’s senior management and representatives throughout the organisation. The civil society organisations in attendance work across a range of areas including social justice, housing, human rights, workers’ rights, young people’s rights, LGBT rights and the rights of older people. The discussion was held under Chatham House rules and this is reflected in the summary of the discussion below.
The Governor introduced the meeting with some opening remarks. A joint presentation was delivered by Fergal McCann, from the Macro Financial Division, on the latest Financial Stability Review and Martin O’Brien from Irish Economic Analysis on the Central Bank’s June Quarterly Bulletin. A presentation was also delivered by Yvonne McCarthy, Head of the Central Bank’s Climate Change Unit, on the work of the Climate Change Unit, and John Sammin on the Central Bank’s sustainability journey. In his concluding remarks the Governor thanked participants for attending the event and noted that the next Civil Society Roundtable was scheduled to take place in September.
Remarks by Governor Gabriel Makhlouf
Civil Society Presentation
Discussion between Central Bank and attendees
The discussion touched on a range of issues, which can be broadly summarised as follows:
- Housing was described as the “biggest issue” by the first attendee to speak, this view was echoed by a number of participants. It was noted that an increasingly unaffordable housing system would inevitably lead to a rise in homelessness therefore creating and maintaining an adequate supply of housing is critical. However, housing must also be affordable particularly to low income families. One possible solution put forward by a participant was the importation of housing from other countries such as Germany and Poland. One contributor noted that the cost of and supply of housing has also been impacted by inflation in prices in the construction sector. Another participant stated that homelessness could be eased through the use of derelict properties. The impact of the relative decline in home-ownership rates in Ireland was also discussed and how owners were better protected than those who rent. One participant outlined how the shrinking private rental market was leading to an increase in homelessness and inflation. The Central Bank also noted that multinational corporations may opt against locating to Ireland as there may not be housing available for employees and that people are worried that their house prices might fall if there is a huge amount of new houses in the system but that the Government should proceed with an increase in supply.
- Inflation featured heavily during the presentation and subsequent discussion. It was explained by one participant that the inflationary impact on low-income households has been particularly difficult owing to the growth in the cost of essentials (such as energy and food) in recent times. Inflation has also led to households building up debt with some turning to illegal high-cost moneylenders and many families falling into arrears with energy providers. The Central Bank thanked the contributor for this particular point and agreed that inflation impacts vulnerable people the most and that recent ECB rate rises are an effort to suppress this inflation. A Bank representative noted that while the ECB sets interest rates for the euro area as a whole - there is room for Government interventions to combat inflation but that these measures should not be applied to every household and should be targeted and temporary. The effect of ECB monetary policy and the rise of interest rates (in an effort to quell inflation) was also highlighted by a participant who warned of a ticking time bomb related to mortgage holders currently on fixed rate but scheduled to complete their term in the near future and will have no other option other than to agree to a higher rate. Risks surrounding commercial real estate in the current economic environment were also discussed.
- Employment. One contributor noted that there is “a recruitment and retention” crisis happening in Ireland and that many companies have responded by increasing wages however this approach is extremely difficult for the charity sector. Another contributor said that there is huge pressure on the labour market and that Ireland is not producing enough graduates for specific sectors, such as social care and education, to deal with population growth. Immigration was put forward as a solution, however this approach may increase pressure on the housing market.
- Vulnerable people. One contributor focused on the struggles of younger people in Ireland today, stating that 72% of young people are considering emigrating for a better quality of life in 2023 compared to 51% in 2012. Buying a home in Ireland has also been particularly difficult for young people. One participant noted the difficulties facing members of the LGBT+ community, highlighting increased pressures on housing and healthcare and a rise in polarised politics. One participant discussed people living in rural areas and how inflation has impacted them, particularly in relation to food and energy, there is also a lack of services including public transport and that Government should consider increasing social welfare payments. Another contributor highlighted that older people are at risk of poverty and that pensions should rise to combat the impact of inflation on this cohort. The Central Bank thanked participants for their contributions.
- Climate Change. After the presentation on climate change there followed a number of contributions from participants. A number of participants highlighted the links between inequality and climate change and how measures intended to combat climate change may exacerbate inequality and that there was a need for a “just transition”. The Central Bank agreed with this point. A query was put forward on the Central Bank’s role and on how Central Banks work together to enforce policies on this issue. The Central Bank responded to these questions by confirming that climate change was a high priority at European level and to the fore in policy discussions and at a domestic level the Bank continues to publish work to inform the debate (e.g. CBI green mortgage publications). The Central Bank also confirmed that Climate Change is critical to the organisation’s mandate, elaborating on this point it was noted that the in order for this “just transition” to happen it must be financed, and this financing will largely come from the financial sector (which the Central Bank regulates). Another participant opined that as population increases there will be a greater demand for resources such as housing, this increase in construction could have negative effects for the climate and that the construction sector should be encouraged to use modern construction techniques with this in mind. The impact of climate change on rural Ireland was also highlighted, and it was noted by a contributor that there should be greater public investment in projects such as forestry and bog land preservations. How climate change effects younger people was also highlighted, with concerns over the future of work, jobs needs, skills needs, working conditions and a refugee crisis. How the Central Bank measures growth was also discussed by a number of participants and how productivity might be a key metric but the impact this productivity will have on the environment is not documented. The Central Bank agreed that there was a need to move away from traditional measures of economic success and that there is potential for new metrics such as “well-being”, however we should be mindful that lack of growth could lead to an increase in poverty.