6 2 mins 12 yrs

Interesting to see that attempts by the Irish government to agree budgetary cutbacks with the -called “Social Partners” have collapsed, forcing the Irish PM Brian “Biffo” Cowen into announcing unilateral cuts in the Irish budget.

“In the Dáil this afternoon, Mr Cowen resisted Opposition demands for a full debate on the Government’s expected €2 billion cutbacks,saying that a full debate tomorrow would instead allow everyone time to consider the details of the package.  However, the Opposition said the 10 minutes set aside for Mr Cowen’s speech, plus 10 minutes for each of the other party leaders was inadequate and demanded that a full debate take place from 3pm until10pm tonight.  Cabinet sources have told The Irish Times that the Government is to push ahead with its cutbacks plan, including extra pension contributions from State employees, along with cutbacks in expenditure on a number of State services, including childcare, along with cuts in the National Development Plan. Tense talks between the Government and trade unions on a new national economic recovery programme broke down just before 4am.”

I have to say I am surprised that these talks broke down. I expected the usual 11th hour deal, but not this time. In a way this is a good thing – government should LEAD and the vested interest groups that the “social partners” represent should not be allowed to stop the correct economic decisions being taken. However I think this might lead to a lot if industrial unrest? Wonder what Irish readers reckon to all of this? And is €2bn enough?

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  1. Fianna fail may be pretty poor, but this crisis has shown me that Fine Gael and Labour would be ten times worse. They are completely clueless and have no ide, whatsoever, on how to run an economy. Fianna fail will, at least now, make the tough decisions. I am fairly worried now, but if there is an election, i will be quite a bit more perturbed.

  2. GUBA – I’m not convinced of that yet. Labour would be a disaster and, unfortunately, maybe Fine Gael couldn’t get in without them.

    Costs in Ireland are too high. When the average salary in the ESB (Electricity Supply) is over 90k then wages are contributing to the problem. (Note that does not mean those on low salaries are paid to much, high salaries at the top and in middle management often heavily skew the average).

    The pension levy is fairish (public sector workers still earn more and pay less than private sector workers) and helps reduce the budget deficit, how is it going to reduce our costs or Ireland’s infrastructure?

    This whole process seems piecemeal. The government is going to be left having to do the same thing again come next budget – and income taxes (among others) are probably going to be raised counter-cyclically.

    I’d like to see some privatisations (coupled with a ramping up of spending on high-tech cutting edge infrastructure by the government), where it makes sense (maybe parts of some ESB, Transport infrastructure, Bord Gas and others) and also for the government to look at redundancies. Bring the cost base way, way down. Then, once they’ve cut out all the wasteful spending, look at where it makes sense to borrow to invest. Areas were we can stimulate the economy and where we’ll get a long term return – whether that’s road & rail, ports, airports, broadband, education, grants for technology transfer, technology infrastructure in the public sector etc.

    In business, they say, if you’re going to make cuts – make one deep cut as nothing destroys morale more than returning to cut and cut again. Unfortunately, I think either the government don’t understand this – or can’t envision an way out of this morass…

  3. typo

    Should read :-

    The pension levy is fairish (public sector workers still earn more and pay less than private sector workers) and helps reduce the budget deficit, but how is it going to reduce our costs or improve Ireland’s infrastructure?

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