For God's sake get a move on
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THE message from the OECD is clear. Translated into the vernacular, it is: "For God's sake, get a move on, lads" The secretary general of the helpful international body warned that cuts in public spending should begin immediately.
In other words, the idea that a restructuring, spread over three to five years, would solve the crisis in the public finances is misguided. Mr Angel Gurria was probably too diplomatic to say as much in public.
Instead, he looked Brian Lenihan in the eye and told him: "The problem is that you may not have time, Mr Minister . . . The markets are zeroing in on countries."
The "markets" are loaning this country €2bn a month so that the Government's pay cheques for public and civil servants will not bounce, and so that the 160,000 private sector workers who have been thrown out of work in the past year will at least have some euro to buy food for their families.
Yesterday's lowering of Ireland's credit rating, due to our continuing problems, including what is seen as an "exceptional" rise in our debt levels, is likely to make it more difficult and more expensive to source those borrowings. The markets will also have been zeroing in on the Government's repeatedly stated commitment to firm and decisive action and the lack of evidence of such.
Despite much talk about spending cuts, government spending will rise by about 7pc this year and the State will have borrowed about €23bn to fill the gap between revenue and spending. The McCarthy recommendations on savings in the public service and the report of the Commission on Taxation were released amid flurries of good intentions, but that was that.
Ministers who supposedly support the principle of public service reform poured scorn on proposals which threatened to impinge on their own departments.
The result has been continuing inaction.
It was Colm McCarthy, at the recent Kenmare economic conference, who warned that what happened in the 1980s is happening all over again. We have apparently learned nothing from the mistakes of the late 1970s when delays in fiscal adjustment cost the country years of subsequent economic misery.
The markets will no longer be appeased by good intentions. They are the paving stones to hell.
Irish Independent
