Budget could be Cowen's last act
Published 07/11/2010 | 05:00
THERE is now tremendous pressure to raise €6bn in the Budget on December 7. The men and women of the markets, who seem to be of a nervous disposition, will not be easily reassured.
But a tough Budget that shows a clear intent to get our deficit under control as quickly as possible, is the minimum they are demanding right now. Otherwise we face a bailout from the EU, the IMF or some combination of both, involving the loss of what little control we still have over our affairs. Last Tuesday, the IMF showed how it operates when it forced the Romanian parliament to reverse a tiny tax reduction it did not approve of.
Fianna Fail and the Greens will formulate the Budget -- if they can agree. So far, we know it is planned to take a quarter of that €6bn through taxation and the rest in cuts. Against that background, the Government has to ensure that every single backbench deputy --including the semi-detached ones (some of whom have already lost their party whip), support the Budget. A single nervous deputy tempted to rebel on any issue as they face into a mass wipe-out at the next election could spell disaster for the Government's present strategy, short-term and long-term. So too could a withdrawal of support by either of the three independent deputies -- Michael Lowry, Noel Grealish and Jackie Healy Rae. Each has their own local agenda and nobody can know for sure in advance how they will act.