Post-election stability 'crucial to keeping the recovery on track'
Published 23/05/2015 | 02:30
Political stability has been a key factor in selling Ireland to investors in recent years but that is now under threat, economist Jim Power claimed yesterday.
Mr Power told the annual conference of the Institute of Certified Public Accountants that there was no guarantee that the formation of a stable government will be possible after the next election "due to the growing proliferation of Independents".
"Political stability has been a key factor in selling Ireland to investors in recent years and it is now under threat. This is concerning because political instability can often result in poor policy making, with long-term negative consequences," Mr Power said.
"The Irish electorate needs to be very careful not to undermine the progress that has been made since the economy crashed."
More than 150 people attended the conference. They included Enterprise Ireland chief executive Julie Sinnamon and Strategic Banking Corporation chief Nick Ashmore.
Mr Power said last year was a year of solid recovery for the economy, with the momentum improving as the year progressed. He said 2015 so far suggests the recovery is robust. Mr Power said ongoing efforts will have to be made to address personal and small business debt, the still very high level of sovereign debt, and the banking system.
"Progress is being made in all of these areas," Mr Power said. "It is also important that wages are kept under control as public sector pay rises would just add to the cost of running a country that is still running excessive budget deficits, and private sector wage increases would serve to undermine the competitiveness of the economy."
Mr Power will also be the keynote speaker on Thursday at a breakfast briefing organised by business and information technology company ProStrategy.
Meanwhile, the vice president of the European Commission said that if Ireland continues on a "fiscally responsible path", it will continue to create jobs at an even faster rate than it is currently doing.
Speaking to the Irish Independent, Jyrki Katainen, the EU commissioner with responsibility for jobs and growth, said that although Ireland's unemployment figures are still high, they are moving in the right direction. "It is very significant. Even though it [the unemployment level] is quite high, the direction is right.
"It's a result of several things, including the Government taking decisive reforms [so that] Ireland could come out of the worst part of the crisis," he said.
"I'm sure that if the Government continues on a fiscally responsible pat and continues to implement reforms then we can see even faster job creation than what has been had."
He urged the Government to continue to aim to reduce the public debt, saying that "Irish people know how difficult it is to adjust the budget in bad economic times.
"it's much easier to do in good economic times and Ireland is in the middle of good economic times, and it's better to reduce the debt deficit now when it's easier."
European Economics Commissioner Pierre Moscovici will be in Dublin on Tuesday for an address to a conference organised by the Institute for International and European Affairs (IIEA).
Mr Moscovici has called on the Government here to continue with structural reforms and to use any extra revenue gains from higher than expected tax returns to drive down debt.