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NOW that there is less danger of frightening the horses, it is possible to make more noise. That is one explanation for the strong language in the leaked report from the EU Commission arm of the troika. Bond yields are down, banks are recovering: time to tell it like it really is.
Another explanation is that the report, due to be published in a few weeks, has not yet been shown to the Government and the final version may be milder in tone. Whatever the reasons, in this document we are closer to the troika's true opinion on Ireland's progress than its official pronouncements or the self-congratulations of government ministers.
The big problem is Health. As well as the €370m spending over-run last year, the commission reckons there is an underlying "structural" shortfall amounting to a whopping €700m.
The troika has always said it will be relaxed about a higher than expected demand for healthcare, or even revenue shortfalls. It reserves its ire for the lack of progress on the shocking cost of drugs and the pay of doctors, especially consultants.
The foreigners in the troika seem to be having problems with our relics of the British class system – consultants and barristers. Paradoxically, the British have done more to modernise these occupations than this republic has.
But the real scandal seems to be the cost of drugs. These rocketed over the past 10 years in a way not seen in any other EU country for which figures are available – with one curious exception; Greece.
One dramatic chart shows that, had Ireland kept to the same spending profile as the UK, the drugs bill would be almost €2bn less – and much of the health spending crisis would be averted.
The troika is not alone in wondering how this happened and why more has not been done to correct it. The pharmaceutical companies have thrown their weight about but the Government response has been craven, even allowing for the importance of the drugs companies. Last night, the body representing the drug companies said things were changing, and that savings of €1bn are coming through.
They had better be. As the latest round of cuts hits the elderly and medical card holders, the commission's accusation that drug companies and consultants are being spared makes poisonous politics for the Coalition.
The commission itself might consider whether to launch a state investigation into the prices the HSE pays the drugs companies, unless things change soon.
It indicates one way of dealing with the consultants – replace them with doctors from abroad. That is the Ronald Reagan approach, when he sacked all the air traffic controllers for striking. They said it couldn't be done, but it was.
The Government faces a different kind of accusation on the economy – that it is being too optimistic. It can perhaps be pardoned for that. Its forecasts are not impossible but, as other economists have noted, they leave no room for slippage in 2013.
It will either be a happy release from the bailout next year, or a load of heartache as we fall back in. Ironically, the difference may depend more on what European leaders and the commission do with the general EU economy than what the Government does at home.
That is this year. The message in this report is that structural change is not happening fast enough, and the financial targets are being met with quick fixes of taxes, temporary measures and cuts to services. That won't work in the longer term.
This is both worrying and alarming. The Coalition parties which were out of office for most of the past quarter century seem as much in thrall to the vested interests as the party they ejected. If they can't get out from under the comfort blankets, who can?
Irish Independent
