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The pain and hardship will be worth it

EARLY last year I wrote here that: "The stark reality is that nobody can say with certainty how long this recession will last. Neither can they say how deep it may go or what its impact will be."

No one can claim that we sugar-coated the nature and extent of what we were facing into. But while we were direct and forthright in our assessments of the difficulties we faced, we were also clear about our plans and our underlying strengths. These worst fears were avoided by taking tough and unpalatable decisions.

These were not just the decisions taken by the Government, but those taken by countless business managers and individual families across the country.

They were decisions no one wished to take, but were ones that we knew we had to take if we were to get through the worst of the economic downturn. As a result we can now look forward to what 2010 may bring with a greater sense of confidence and, dare I even say -- hope.

The severity and number of the job losses in 2009 was on a scale not seen in generations but as we look back we can see that, thankfully, the numbers signing on did not reach the heights we had all feared this time last year.

In the April Budget we were forecasting 15.5pc unemployment in 2010, but the stabilising of the rate of increase in recent months means we can now revise it down to 13.2pc. This unacceptably high level means pain and hardship for many thousands of families and individuals, but it shows that taking firm and resolute action yields results.

The challenge for 2010 is to ensure that the range of measures we have introduced to protect existing jobs and generate new job opportunities continues to yield results.

One of the strongest causes for optimism and confidence in 2010 is the incredibly strong performance of our export sector. While virtually every other country has seen export levels fall substantially, ours have held up.

This is all the more remarkable as it all happened while the countries we were exporting to were in recession.

Most of these countries are now out of recession and activity among our trading partners is improving as their economies begin to grow.

It is a tribute to the determination of all those involved in the export sector, both in the public and private sector. They were the engine of our economic growth a decade ago and will be again now.

While it could be argued that the resilience of our export sector in 2009 alone is cause for confidence in 2010, there are other tantalising indicators that 2010 will be a positive year.

Not only was public expenditure in 2009 kept within the amounts set out in the April Budget, it came in some €221m below them.

These extra savings brought the year-on-year reduction in public expenditure to €2.2bn (4.4pc). This level of control and discipline is almost without parallel across Europe.

At the same time, tax revenues are stabilising -- €800m more in tax was collected in the final two months of 2009 than had been expected.

This means the shortfall in tax in 2009 was just over €1.35bn, and not the €2.2bn we feared in November.

While these figures will not have anyone reaching for the champagne, or even the Asti Spumante, they are cause for confidence in what we can achieve when we work together. No one said getting through this crisis would be easy.

It clearly wasn't. There was a lot of pain and there is still some pain left to endure. But we can start to see that the difficult decisions and tough choices were not in vain.

Back in April 2009, the president of the European Central Bank, Jean Claude Trichet, was saying that: "Ireland has the strength to ride out this economic downturn", and that our economy will be "well-placed to benefit from the eventual recovery in the global economy because of its open nature".

His comments were seen by many at the time as being unrealistically optimistic, especially given the depth of the crisis then. However, he made his remarks on the twin basis that the Government has an economic policy that "convincingly reduces future public deficits"; and the fact that Ireland is open to trade, is flexible, has a skilled workforce and a business-friendly regulatory environment.

Nine or 10 months on we can look back at his comments and start to think that he may well have been right.

Willie O'Dea is Minister for Defence and Fianna Fail TD for Limerick East

Sunday Independent