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Thread: EU Commission warns of need for more austerity in Ireland, questioning assumptions.

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    Default EU Commission warns of need for more austerity in Ireland, questioning assumptions.

    The Commission warns that key government assumptions may be too optimistic. It wants more specific steps to be detailed now.

    The European Commission has told the Government to stand ready to intensify its austerity drive after warning that key assumptions underpinning its economic recovery plan may be too “optimistic”.

    In a blunt assessment of a programme that already foresees €3 billion in new cutbacks and tax measures in 2011 and a further €3 billion in 2012, the EU executive says the plans for the entire 2011-2014 period should be strengthened to avert the risk that targets might be missed.

    “As regards Ireland, yes, the scenario is assessed to be on the optimistic side. In particular in the outer years, the growth assumptions look quite optimistic to us,” a senior Commission official told reporters.
    The Commission wants the Government to set out now the specific measures it plans to take in the coming years, while Brian Lenihan had said future measures would be decided only at budget time year by year.



    In a new review of his recovery plan, however, the Commission warns that the strategy from 2011 onwards “may not be consistent” with recommendations from the European authorities.

    “In particular, the deficit targets for 2011-2014 need to be backed up by concrete measures and the plans for the entire period need to be strengthened to address the risks from less favourable GDP growth and slippages on the expenditure side."
    EU warning over Irish recovery plan - The Irish Times - Wed, Mar 17, 2010

    Here is the Commission language:

    Quote Originally Posted by Commission
    Deficit and debt outcomes could be worse than targeted mainly due to (i) the lack of specification of the consolidation measures after 2010; (ii) the programme's favourable macroeconomic outlook after 2010; and (iii) the risk of expenditure overruns.

    Continuing to implement a credible consolidation strategy, facilitated by a stronger budgetary framework, should foster a return to sustainable economic growth.

    There is also a need to regain competitiveness through productivity-enhancing measures and adequate wage policies, and to limit the increase in long-term unemployment. To improve the long-term sustainability of public finances, further pension reforms will be important.

    The invitations to Ireland concern the specification of the budgetary strategy to correct the excessive deficit, and improvements to long-term sustainability and the fiscal framework.
    http://europa.eu/rapid/pressReleases...guiLanguage=en
    Last edited by He3; 17th March 2010 at 10:07 PM.
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    The government's whole promotion of the idea that with some quick action things can get back to normal is simply wrong. The government finances may be stabilised, but whole segments of the economy will take decades to recover. (Yes, decades) Some experts reckon that many of those in their 50s and mid 40s who worked in the building trade will never work in that industry again because the building trade will not recover before they reach retirement. It is that dire. Effectively all our banks are broke. Banks are crucial for resurrecting the economy. NAMA in reality is not about getting credit flowing, but about trying to convince international investors that our banks are not insolvent. The trouble is that they know they are. They know state ownership of Bank of Ireland and AIB is likely, possibly this year. They know that the only thing stopping some banks collapsing completely is the guarantee. If it ended tomorrow those banks would be gone within half an hour. The situation is much much worse than even the public know.
    "In [Ireland] a wife is regarded as a chattel, just as a thoroughbred mare or cow." Mr Justice Butler in the Irish courts. 'Traditional Marriage' in the 1970s.

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    Surely we should just give them the finger again, as we did when they warned McCreevy back in 2002 - after all, that worked out so well.

    The situation is much much worse than even the public know
    Yeah...the rot in the economy is very deep.
    Never let the best be the enemy of the good.

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    My only surprise is that I am surprised it took the Commission this long to figure out that the stability programme presented by the government last year was a work of fiction.......then again there was a referendum that had to be won last year.......but none this year..............

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    Can anyone be suprised at these observations?

    It might at least help to bring some reality to the discussions with the public sector unions.

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    The Unions are going to love the Commission's reference to further measures being required in Ireland's 'wage policies' (i.e. cut public sector pay further) and 'pension reform' (i.e. change the public sector pension regime now). Then again the Union's were yesterday's useful idiots - no need for them now.

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    Quote Originally Posted by kerrynorth View Post
    My only surprise is that I am surprised it took the Commission this long to figure out that the stability programme presented by the government last year was a work of fiction.......then again there was a referendum that had to be won last year.......but none this year..............
    And there was a Budget, in Ireland, AFTER the referendum. That represented the first flesh being put on the stability programme, so it wouldn't have made much sense to make a judgement on its assumptions and content in advance of those assumptions and content actually being decided, would it now?
    "So how are things at the Campaign for the Freedom of Information, by the way?" "Sorry, I can't talk about that"

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    Quote Originally Posted by hiding behind a poster View Post
    And there was a Budget, in Ireland, AFTER the referendum. That represented the first flesh being put on the stability programme, so it wouldn't have made much sense to make a judgement on its assumptions and content in advance of those assumptions and content actually being decided, would it now?
    The 4% annual growth assumptions 2012-14 were just as much a fiction last year as this year.

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    Quote Originally Posted by kerrynorth View Post
    The 4% annual growth assumptions 2012-14 were just as much a fiction last year as this year.
    Except that there's now more evidence to show that - meaning it makes more sense to say it now.
    "So how are things at the Campaign for the Freedom of Information, by the way?" "Sorry, I can't talk about that"

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    I know full well they are no shining knight rushing to the defence of the beleagured Irish citizen / taxpayer, but just stop and think for a minute how our elite rulers would phuck us over if there was no EC performing an oversight role ?!?!?

    I'm certainly thankful for the EC in this instance for keeping Ireland afloat and safe from its own Zanu-FF rulers and electoral supporters !

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