Friday 20 January 2017

Editorial: The Troika must cut us some slack on austerity

Published 19/06/2014 | 02:30

Joan Burton. Photo: Clodagh Kilcoyne
Joan Burton. Photo: Clodagh Kilcoyne

As she seeks to lead a party reeling from the ravages of the part it played in the current deeply unpopular austerity Government, could Joan Burton, the Minister for Social Protection, be happy with the assessment of the International Monetary Fund (IMF) that she will "remain in the Coalition and maintain the fiscal targets for 2015" should she win? While there is little doubt that the new leader would keep Labour in government, it is unlikely that such a leader will want to continue with the austerity regime which has ceded large sections of its support to Sinn Fein and Independents.

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What Ms Burton must be hoping for is some renegotiation of the Programme for Government that will help build on the fragile return of consumer confidence and put more money in the pockets of working people. However, the mandarins of the Troika are insistent that austerity should continue for another year and a further €2bn in government taxes and spending measures must be adhered to in Budget 2015 next October. This will bring the Irish deficit to the required equivalent of 4.8pc of gross domestic product (GDP). While recognising that it was these three organisations which came to the aid of Ireland when nobody else would lend us money, it must also be pointed out that they are receiving interest payments of €1.5bn a year for their 'generosity'. These latest pronouncements, backed up by our own Fiscal Advisory Council, may make sense on paper, but politically and socially they are unpopular and are undoubtedly causing deep trauma to the social fabric of this country.

As such there should be a review of the targets contained in the programme. The Finance Minister, Michael Noonan, who has remained popular while implementing the austerity programme, has recognised this and knows that taxpayers need something of a tonic if they are not to lose all hope from 'austerity fatigue'.

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