Wednesday 13 November 2019

No “breather” from austerity, Government warns

Junior minister Brian Hayes,TD
Junior minister Brian Hayes,TD

Michael Brennan Deputy Political Editor

JUNIOR Minister for Finance Brian Hayes has insisted that is not possible to take a “breather” from austerity.

It came after the former head of the IMF in Ireland Ashoka Modia said that such a strategy could lead to growth, which would do more for balancing the Budget than continuing with cutbacks and tax increases.

Mr Hayes said this based on an assumption that somebody else was going to lend the Government the money it needed to bridge the €12bn annual gap between tax revenue and spending.

“There’s €1bn of a deficit every single month in this economy this year,” he told RTE’s Today with Pat Kenny show.

“We are still borrowing significant amounts of money.

“The only way we are going to get back on our feet again is to make sure we get the situation under control,” he said.

The Government is currently committed to taking a further €5.1bn out of the economy over the next two years to balance the budget.

Mr Hayes said the Government was working with the Troika to bring forward a stimulus plan. A key factor is how to use the €1bn in savings from the Anglo promissory note deal.

Tanaiste Eamon Gilmore told RTE that the Government would decide how to use the Anglo promissory note savings when it drafts the Budget later this year.

The Government is locked in negotiations with the EU, IMF and European Central Bank to row back on the €3.1bn adjustment target in the October Budget.

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