After months of wondering, the Irish people now know what’s in the next four years are going to be. As far as an austerity program, here in Ireland, this is it - 138 pages of details of how the Irish government will cut spending and raise taxes. The ideas they need to bring down their massive budget deficit down to blow 3% of GDP by 2014. Now, there will be $20 billion worth of austerity in this country over the next four years but it includes cutting thousands of public sector jobs, also cutting the minimum wage by one euro an hour, also rising the value added tax that’s the national sales tax. The goal, the Irish Prime Minister said is to bring Ireland back to where it was just a few years ago.
This is a time for us to pull together as a people. It's a time for us to confront this challenge and to do so in a united way. To do so in a way which ensures those who have most will make the most contribution, those who have least will be protected to the greatest extent we possibly can, knowing that the size of the crisis means no one can be sheltered from a contribution that has to be made toward national recovery.
Now, for this austerity program to work, the government has had to make some assumptions on growth over the next two years. Some economists say maybe they are a bit too rosy. They might have to go over the figures again next year. But I talked to the enterprise minister earlier on Wednesday, and he said despite all this austerity that Ireland is definitely open for business.
We would safeguard, in the middle of this recession, education. And we would safeguard all research and development. We are developing a smart economy. And we are still appealing very much to the multinational companies, particularly, in the U.S.A. And I'm only back from a visit to the U.S.A., where we visited 13 multinationals. And I would say 10 of them will be locating, either expanding business here, or locating as new entities here over the next number of years.
What’s the next year in Ireland? Well, the government is still negotiating with the IMF for what we think will be an 85-billion-euro investment from the IMF and the European Union. The money will go to the government here in Ireland. They can use that to help bring down the budget deficit, also to recapitalize the cripple banks. It’s expected that the number of these banks will be all but nationalized in a few weeks time. The government then also has to have next year’s budget passed by razor-thin majority in the parliament. This government is very unpopular and it’s expected that it will be a new government after an election early next year. So the government that’s putting this program together may very likely not be the government. That’s gonna have to push it through, push that pain through all of the Irish people.
Jim Boulden, CNN, Dublin. |