Monday 24 July 2017

Unions and bosses reject Kelly's call to abandon bailout

Paul Melia

Paul Melia

UNIONS and employers last night rejected controversial calls by UCD economist Morgan Kelly to withdraw from the EU/IMF bailout.

Employers' group IBEC said the move would force the Government to impose swingeing pay, social welfare and pension cuts.

The country's main trade unions were broadly in agreement.

The Irish Congress of Trade Unions said the deal should be renegotiated.

The Civil Public and Services Union (CPSU), which represents 14,000 lower ranking civil servants, said the move would "destroy" the economy.

"He's talking about a €17bn adjustment which would just destroy the economy. There's a tendency to think we got a bad deal from the EU/IMF, and I don't think that's a reasonable analysis. We are getting an interest rate which is a hell of a lot better than what we'd get in the private market," general secretary Blair Horan said.

Mr Kelly's comments have also been rejected by the Department of Finance, which warned of cuts of 30pc in social welfare payments and pay levels for all public workers if €17bn was immediately cut.

The alternative would be sizeable tax increases or widespread reductions in public services, which runs the risk of throwing the economy into recession for many years, it said.

IBEC's Brendan Butler said Ireland's recovery could not be funded by tax increases, and that the bailout terms should stand.

But ICTU warned the deal had to be restructured or Ireland would default.

Irish Independent

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