Cabinet must grasp the nettle
ONE of the most important cabinet meetings in the history of the State began at Farmleigh last night and will continue today. The decisions that emerge will not only determine the basic shape of the Budget to be unveiled on December 7, but will exert a major influence on our economy and society for a decade, perhaps for a generation.
Immediate and firm action must be taken to make a start on rectifying the public finances. But this action cannot cover just one year. It will be part of a four-year plan aimed at the target, agreed with the European Commission, to reduce the deficit to the equivalent of 3pc of gross domestic product (GDP) by 2014.
Much of the public debate has centred on the extent of the spending cuts and tax increases which will be necessary in order to reach this target. Initially, a figure of €3bn was canvassed as the minimum needed in the coming year to begin the process. It soon became clear that this would not suffice because optimistic forecasts for economic growth appear most unlikely to materialise.