Sunday 25 September 2016

EU verdict on progress is yet again unsettling

Published 11/06/2016 | 02:30

Yesterday, we were once more forced to feel the chilling breath of an EU “surveillance team”, dispatched by the EU Commission and the European Central Bank to warn us that there may be trouble ahead Photo: Bloomberg
Yesterday, we were once more forced to feel the chilling breath of an EU “surveillance team”, dispatched by the EU Commission and the European Central Bank to warn us that there may be trouble ahead Photo: Bloomberg

They say there is no education like adversity. Given our experiences of the past few years that ought to mean we have one of the best-schooled governments in Europe.

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And yet surveying the current industrial landscape and the pressure building up on pay, and competing demands for increases in government spending, one might be forgiven for wondering if there had ever been an economic meltdown at all.

Yesterday, we were once more forced to feel the chilling breath of an EU "surveillance team", dispatched by the EU Commission and the European Central Bank to warn us that there may be trouble ahead.

And this time we will have no one to blame but ourselves. The experts were from a bailout team here to check out how we have been doing since the crash. Their verdict was unsettling. They warned that planned hikes in public spending this year could increase the budget deficit.

They also cautioned against further planned tax cuts and suggested there is even "scope for broadening the tax base" to avoid an adverse impact on revenue. They also pointed to red lights flashing in the cockpit concerning soaring costs in healthcare. And they found further grounds for worry in the number of non-performing loans in our banks which remain "among the highest in the euro area". This would be alarming at any time but it is doubly so given the precarious nature of the Government and its reliance for survival on an extremely fragile set of alliances.

Already a nervous impulse to cave in when the pressure is on has been detected. One of the major tests the minority government faces is managing the pressure for public sector pay rises. It swam with the populist tide on the issue of Irish Water, but if you follow every favourable current you lose direction. There are matters of principle when it is better to stand firm like a rock. In delivering the last Budget, Michael Noonan rightly claimed credit for the Government and the Irish people for fixing a broken economy and getting Ireland working again.

But yesterday, while saluting our "remarkable" turna-round, the EU also raised the perplexing but unavoidable spectre that we could be at risk of imperilling our prospects once more.

Government must not abandon flood-hit areas

The admission that it may take a minimum of five more years to put promised flood defences in place will come as another crushing blow to people across the country who have had their livelihoods and homes destroyed.

They had already suffered a litany of broken promises and had been given grounds for hope after the devastation from the unprecedented damage done just months ago.

They have also struggled to get insurance cover and now they are being told that they could be facing years more misery at the mercy of the elements.

While the Government had earmarked €430m for the roll-out of flood defence schemes, the chairperson of the Office of Public Works has revealed that 300 defence schemes are urgently needed nationwide. In order to provide them, a lot more funding and time will be required.

This basically means that hundreds of homeowners are facing a nightmare once more this winter.

The Government can not turn its back on these families,  communities, and businesses again. If it means going to Brussels and demanding emergency financial help, then that is what must be done. These regions cannot be abandoned.

Irish Independent

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