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Press Releases - Department of Finance - Government of Ireland
This "addendum to the stability programme update",is what the Civil service mandarins think will happen the Irish economy until 2013. It does not inspire confidence, but is a source of serious depression both for what they do take account of and what they don't (how the EU will let us get away with this is beyond me.
There is also a failure of political responsibility:
- no clear plan has been laid out (perhaps a broadcaster should call each FF TD in turn and ask them what the plan is and they willl be embarrassed into forcing action)
- the government appears to completely indecisive.
- the forecasts, upon which the cabinet make their decisions once again appear hopelessly optimistic and will undermine confidence.
- insufficent account appears to have been taken of the International DEPRESSION, sterling collapse, banking fiasco, international credit crunch, the serious loss of competivness, the negative impact red tape has on SMEs.
To the charge of indecisive, unrealistic ditherers, the government (both civil service and cabinet) must plead guilty. WTF is going on?
A touch optimistic, No?As a result, a cumulative loss of output of around 6¼ per cent appears to be in prospect over the period 2008-2010. Positive growth is expected in 2011, with a return to more sustainable growth thereafter.
I read about Cowen's mutterings on this, but why no big announcment?The Government has agreed to put in place a five year plan to restore balance to the public finances by 2013. This will include as a priority the elimination of the current budget deficit by 2013, that is to stop borrowing for day-to-day spending, and in that period to also bring the General Government deficit to below 3 per cent of GDP, while maintaining a high level of capital expenditure.
Qualitive easing, will weaken sterling to tiolet paper status, meaning our trade with the UK is gone, border towns will be wastelands and retail sales will be decimated (at best).Moreover, the significant appreciation of the euro vis-à-vis
sterling in recent months, if sustained, will weigh further on our export performance. As a result of these developments, the outlook for the exporting sector is unfavourable, with a decline in exports assumed for this year.
Did these civil servants get their degrees in a lucky bag. Give me a break, they will reach 9.2% next month and rise to 12% if we are very lucky....the level of employment in the economy will be close to 2
million, as a result of the substantial employment gains since the mid-1990s.
Unemployment is forecast to continue to rise this year. It is forecast to average 9.2 per cent for the year as a whole, with the year-end figure being around 10 per cent.
This is an appaling admission of failure from our permanent government.The Government has set as a priority the elimination of the
current budget deficit by 2013, that is to stop borrowing for day-to-day spending, and to bring the General Government deficit to below 3 per cent of GDP in that period. Budget 2009 had set out a plan to do this by 2011. Given the worsening position it is no longer practicable or sensible to do this in three years, as it would layer too great a shock on the economy and would be counter-productive
THE PLAN
Quango killers, more taxes, major spening cuts. This aint going to be easy. €2bn this year, but €4bn cuts for 2010 and 2011. Serious ouch. But why the delay and reticance.A special group has been established under an independent Chairman to further curtail public expenditure and public service numbers. This Group will report to the Minister during the first half of 2009 to secure additional savings which will feed into the Budgetary and Estimates process, work on which is already underway.
• A Commission on Taxation established in February 2008 is currently
examining the structure and nature of the Irish tax system and will report to theMinister for Finance well in advance of Budget 2010.
• The Government will decide during January 2009 amongst options to deliver
additional savings of up to €2 billion in Government expenditure during 2009
over and above that agreed in Budget 2009.
• Additional adjustments will be made on a phased basis each year out to 2013 and these will cumulatively amount to over €16 billion (8 per cent of GDP) by 2013.
These are the size of the PROJECTED government deficits from 2008-3,069 -9,300 -8,387 -5,511 -1,851
onwards.
EXCHEQUER BALANCE -12,714 -17,980 -16,860 -13,769 -11,583 -8,081
GENERAL GOVERNMENT
BALANCE -11,796 -17,165 -16,271 -12,092 -9,443 -5,537
% of GDP -6.3% -9.5% -9.0% -6.4% -4.8% -2.6%
That said I would prefer FF to remain in power to sort this out (it is was in opposition it will scream against every cut. Lenihan appears to found his balls in the last few weeks and the Greens may act as a counterbalance and keep the focus on the longterm. If this year is bad, 2010 and 2011 are going to be disasters - perhaps the political appeptite will have been acquired by then. I wonder if any more FF TDs will jump ship before the next election because if they are the second candidate, it may be the only way they will get back in (and get paid €40k more as an independent).Table 7: General Government Debt Developments
% of GDP 2007 2008 2009 2010 2011 2012 2013
Gross debt4 24.8 40.6 52.7 62.3 65.7 66.2 64.5
Change in gross debt ratio 0.1 15.8 12.1 9.6 3.4 0.5 -1.7
In short, decisive tough action should be portrayed as a virtue and communicated well. But FFS lads, get on with it.
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Originally Posted by Digout
