The government parties will be forced to break all three of their key election promises if Ireland is to make any real progress in the years ahead, UCD economist Colm McCarthy warned yesterday.
Speaking at the Irish Small and Medium Firms Association (ISME) annual lunch at Dublin's Burlington Hotel where he was awarded the SME Medal for services to Irish business, Mr McCarthy said the Government had engaged in "auction politics" during the last election. Now it was going to have to pay the price.
In particular, it would have to row back on its commitments not to raise income tax, not to touch social welfare and to honour the Croke Park Agreement to get the country out of economic quagmire it finds itself in.
"This policy of no compulsory redundancies means that who leaves and who stays is decided by the staff themselves and not by the management.
"Public payroll costs need to come down somehow, and it's not realistic to think otherwise. Croke Park will have to be revisited," he said.
In tandem with revisiting Croke Park, he added that the nation's social welfare bill would certainly have to be cut, and income tax would have to be raised if Ireland was to stand a chance of recovery in the current European climate.
"It's not just a local banking crisis; it's right across Europe. This week's vote is just a first step on a long road ahead."
Addressing 500 employers, Mr McCarthy said he believed the euro was in fact a "currency agreement" rather than a true currency. The economist, who authored the 'An Bord Snip Nua' report, was just back from Greece where he has been advising the troika.
Other speakers included ISME chairman John Ryan, who urged that in its efforts to attract foreign direct investment, the Government should not forget Ireland's SMEs.
He called for fast tracking of the long-promised micro finance scheme for small businesses; the introduction a worthwhile employment incentive programme; and for the Government to abolish the opt-out clause in late payments legislation on all domestic business transactions.